Delta Air Lines has reported financial results for the first quarter 2011 posting a net loss of $318 million which is $128 million worse than the first quarter of 2010, caused by galloping fuel prices. The airline also generated $452 million in free cash flow for the quarter, while its adjusted net debt at quarter end was $14.5 billion.

Delta ended the March 2011 quarter with $5.5 billion in unrestricted liquidity, which includes $1.6 billion in undrawn credit lines. In riding the storms of rising fuel prices, the airline has actively implemented domestic fare increases and international fare surcharges as means of passing through fuel costs to its customers. Other measures include four point reductions in planned capacity for the second half of 2011, particularly targeting reductions in markets where revenue improvements have not kept pace with rising fuel costs and the retirement of 130 of Delta’s least efficient aircraft over the next 18 months, including the DC9-50 and Saab turbo-prop fleets, and 60 50-seat regional jets;

“Fuel is the biggest challenge facing this industry and Delta is actively reducing capacity, implementing fare actions, hedging our fuel needs and attacking our cost structure in order to offset fuel’s impact on our earnings,” said Richard Anderson, Delta’s chief executive officer.

“These actions would not be possible without the dedication and determination of Delta people worldwide, who are working every day to build the best airline in the world for our shareholders, our employees and our customers.” The airline reported a promising revenue environment withtotal operating revenue for the March 2011 quarter was $7.7 billion, an increase of $899 million, or 13%, compared to the same period last year.