updated 5/11/2006 7:09:52 PM ET 2006-05-11T23:09:52

Delta Air Lines Inc., the nation’s third-largest carrier, reported Thursday a first-quarter loss of $2.1 billion, plunging the beleaguered airline into deeper financial straits.

Excluding a flurry of bankruptcy restructuring costs, however, the Atlanta-based airline’s losses are a tamer $356 million for the January to March period.

Another example of the company’s staggering restructuring costs: It said it will post a $1.6 billion loss during March alone, but all but $6 million of those losses are from restructuring fees and one-time charges.

Yet the massive one-time costs — including this quarter’s $1.4 billion charge to rework financing agreements for a fleet of aircraft and $310 million in accounting adjustments — still add up to red ink for the airline.

Delta has lost more than $14 billion since January 2001.

Although the mounting costs continue a downward trend — the airline logged a $1.1 billion loss in the same period last year — CEO Gerald Grinstein said the company is still “on track” to meet its goals.

“While continued losses clearly are unacceptable, Delta’s financial performance for the quarter was in line with expectations, especially in light of fast-rising fuel prices,” he said.

He said he was particularly pleased that the company reduced its first quarter operating loss by nearly 50 percent compared to the same period last year. The airline also reported that revenue in the quarter rose 5.5 percent despite a 8.6 percent decrease in capacity.

The airline continues trying to emerge from bankruptcy protection it filed for in New York in September.

It asked a bankruptcy judge this week to approve a sweeping agreement with pilots seeking $280 million in annual contract concessions, saying the threat of a strike had cost the carrier millions of dollars in lost business each week “as concerned passengers and shippers booked flights on other airlines.”

Delta and its pilots had agreed to $1 billion in annual concessions — including a 32.5 percent wage cut — in a five-year deal in 2004. It then sought an additional $325 million in cuts from its nearly 6,000 pilots, who threatened to strike as an April 15 deadline loomed.

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