NEW YORK (AFP) — Delta Air Lines reported a first-quarter net loss Wednesday of 6.4 billion dollars as it marked down the company’s value in advance of its takeover of Northwest Airlines and saw fuel costs surge.

Delta, which announced an agreement on April 14 to acquire Northwest, saw its losses deepen compared with a year-ago loss of 130 million dollars, when it was still under bankruptcy protection.

Delta charged off depreciation of 6.1 billion dollars in the first quarter, bringing its loss per share to 16.15 dollars.

Excluding special items, the carrier had a loss of 274 million dollars, or 69 cents per share, wider than analysts’ consensus forecast of a loss of 51 cents.

The airline has seen its jet fuel bill double from 948 million dollars in the first quarter of 2007 to 1.4 billion dollars in this year’s first quarter.

The jet fuel price surge comes amid a near doubling of crude oil prices in the past 12 months, to close to 120 dollars a barrel on Tuesday.

Delta’s sales rose 12 percent to 4.76 billion dollars in the first quarter, but not enough to offset the higher fuel costs.

In response to rising fuel prices, Delta said it expects to rein in its system capacity for the second half of 2008 to between zero and negative two percent, compared with 2007, with domestic capacity down nine percent to 11 percent.

Delta said it would remove 15 to 20 mainline and 60 to 70 regional jet aircraft from its operations by the end of 2008.

“We have moved quickly to mitigate the short-term impact of higher fuel prices by further reducing domestic capacity and taking a disciplined approach to costs and cash flow. These actions have offset more than 50 percent of the fuel price impact,” Edward Bastian, Delta’s president and chief financial officer, said in a statement.

“However, we clearly need to do more. Merging with Northwest will generate over one billion dollars in annual synergies, providing a more durable financial foundation for the future and giving Delta a stronger platform for profitable, long-term growth.”

Delta explained that the depreciation announced Wednesday was aimed at revising the current value of the company compared with its estimate when it left bankruptcy protection a year ago, which was based on oil prices at 70 dollars a barrel.

“Upon emergence from bankruptcy, Delta recorded a 12-billion-dollar goodwill balance under fresh start accounting. The valuation of goodwill was predicated on the company’s market value at that point of 9.4 billion dollars. A key assumption in that valuation was the price of fuel of 70 dollars per barrel,” the company said.

Soaring crude oil prices are “significantly impacting Delta’s single largest operating expense and future projected discounted cash flows.”

“Based on the difference between Delta’s book equity and an updated stand-alone valuation reflecting current fuel and economic assumptions, prepared in connection with Delta’s recently announced merger with Northwest, Delta recorded a non-cash goodwill impairment charge of 6.1 billion,” the company explained.

The company also announced new measures to increase revenue and cut costs to 150 million dollas in 2008, in addition to the 400 million dollars in productivity initiatives previously announced.

Shares in Delta were up 0.44 percent at 6.83 dollars at 1411 GMT.