updated 4/14/2004 7:57:07 AM ET 2004-04-14T11:57:07

Delta Air Lines says it must urgently cut costs amid a huge first-quarter loss that was narrower than last year but still missed Wall Street expectations.

The nation's third-largest airline said Wednesday it lost $387 million, or $3.12 a share, for the three months ending March 31, compared to a loss of $470 million, or $3.81, a share in the same period a year ago. The latest loss includes $4 million paid out in dividends to preferred shareholders.

Analysts surveyed by Thomson First Call were expecting a loss of $3.02 a share.

Revenue in the January-March quarter was $3.29 billion, a 4.3 percent increase from the $3.16 billion recorded in the same period a year ago.

"This was a disappointing quarter for Delta and there are more challenging times ahead," said Gerald Grinstein, Delta's chief executive officer. "Continued losses of this magnitude are unsustainable."

He added, "Delta must regain sustained profitability so we can compete effectively. The urgent task is to achieve a competitive cost structure so that Delta can generate a positive cash flow, reduce its debt burden and return to profitability."

Delta executives have been trying to cut costs for more than a year to try to return the airline to profitability. The airline has laid off 16,000 employees since the 2001 terrorist attacks.

The company is seeking a 30 percent pay cut from pilots, who are offering only 9 percent and to forego a 4.5 percent raise they are due in May, according to the pilots union.

Copyright 2004 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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