business

ATLANTA - Delta Air Lines Inc. plans to cut domestic capacity by an extra 3 percent in the second half of this year due to record fuel prices.

The Atlanta-based company disclosed its plans in a regulatory filing, and President and Chief Financial Officer Ed Bastian discussed the capacity cuts later Wednesday during the Merrill Lynch Global Transportation Conference in New York that was broadcast on the Internet.

The airline will cut domestic capacity by 13 percent during the second half of the year, an increase from the 10 percent reduction announced in March.

Bastian suggested at the conference that Delta's domestic capacity cuts won't end there. "We have flexibility to do more, and we will do more," he said.

He said further reductions could be warranted in 2009 on Delta's regional carrier side.

Delta, which plans to acquire Northwest Airlines Corp., estimates that fuel costs this year will be $4 billion more than last year.

The airline expects to post a profit in the second quarter, excluding one-time items. Delta forecast $3.2 billion in unrestricted liquidity at the end of 2008, down $600 million from the end of 2007. The total amount Delta cited includes a $1 billion undrawn credit line.

Bastian hinted that Delta will be looking at unspecified cash-raising opportunities in the future, but wants to complete the Northwest acquisition first. There has been speculation Delta could sell its regional subsidiary, Comair. Delta has said only that it is considering shedding the unit.

Delta shares fell 28 cents, or 4.9 percent, to close at $5.45 on Wednesday.

Several major carriers have announced plans to cut domestic capacity by double-digit margins as the price of oil soared to more than $134 a barrel, about twice what it was a year ago. Others are adding new fees for passengers and cutting jobs. Delta will shed about 4,000 jobs.

Delta expects its job cuts to result in $200 million in annual cost savings. Bastian said the affected employees will leave Delta as of Oct. 1.

While Delta is cutting domestic capacity, it continues to increase its international capacity.

The carrier said Wednesday that international capacity will be up 14 percent in the second half of the year, compared with the same period a year ago.