Oct. 22--Delta Air Lines' cost-cutting efforts stayed ahead of sagging revenues, netting the company a $51 million profit, excluding one-time charges, in the third quarter.

Officials said Thursday that with economic indicators pointing to a slow, uneven recovery, they expect to cut overall system capacity another 3 percent next year.

Delta's quarterly results showed revenues down $2 billion but costs down $2.1 billion as the world's largest passenger airline weathered the worst economy in its history.

Delta CEO Richard Anderson said results were aided by the merger with Northwest Airlines last October, which has already produced $500 million in benefits, the full year's target, and is expected to hit $700 million by year's end.

Also contributing to a $2.1 billion cost reduction compared to last year were lower fuel expenses and greater productivity.

The 6-cents-a-share profit compared favorably to a 5-cents-a-share loss expected by analysts.

Helane Becker, analyst with Jesup & Lamont Securities, said Delta's aggressive reductions in capacity helped the bottom line.

"I think their size is in part what accounts for the difference between them and the peer group," Becker said. "They made the decision to pull a lot more capacity out of the system than everybody else except for United, and I think the relative performance of the two airlines shows that."

Delta stock closed down a penny, at $8.32 a share.

Anderson and president Ed Bastian said Delta is seeing month-to-month improvement in some areas, such as domestic business traffic, but it forecasts a break-even operating margin in the fourth quarter.

"The global recession drove a significant revenue decline for the quarter, but we see improving trends in load factors, yield and business traffic," said Bastian.

Anderson said, "The economy is gradually recovering, and the actions we've taken will position Delta well going forward."

The quarter's profit excluded $212 million in special charges related to refinancing and the merger. The charges also included $51 million in employee severance program costs.

Delta, which replaced Northwest as the primary carrier at Memphis International Airport, anticipates culminating the merger transition with a single operating certificate from the Federal Aviation Administration by the end of the year, officials said.

-- Wayne Risher: 529-2874

Delta Airlines Third-Quarter Results

Operating revenue: $9.5 billion, down 21 percent

Operating expense: $9.3 billion

Profit: $51 million, excluding impact of $212 million in one-time charges

-----

To see more of The Commercial Appeal or to subscribe to the newspaper, go to http://www.commercialappeal.com.

Copyright (c) 2009, The Commercial Appeal, Memphis, Tenn.

Distributed by McClatchy-Tribune Information Services.

For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

NYSE:DAL, NYSE:NWA,

A service of YellowBrix, Inc.