Analysts have not been confident about Delta's future

The move, aimed at saving $3bn (�1.7bn) by the end of 2007, comes just over a week after the airline filed for Chapter 11 bankruptcy protection.

Delta, the third-largest airline in the US, has lost $10bn since 2001 and is saddled with $14bn in debt.

The measures come on top of an earlier cost-cutting plan announced a year ago, which failed to rescue the company.

Delta chief executive Gerald Grinstein outlined the latest plans in a memo to the airline's 52,000 employees.

He said the moves were "designed to fortify Delta against the clear and present threats from our competitors" and that Delta intended "to move from being an unprofitable airline today to a profitable airline in just over two years".

Transformation

The memo said Delta would eliminate 7,000 to 9,000 jobs - up to 17% of the workforce - by the end of 2007.

Under the "transformation plan", Mr Grinstein will take a 25% pay cut, while other executives will lose 15% of their pay. Other employees will have their salaries reduced by 7 to 10%.

The company said the plan targeted savings of $3bn a year, on top of the $5bn it is cutting under last year's restructuring.

"Delta will move quickly and decisively to do what is necessary to beat our competitors and meet our financial commitments," Mr Grinstein said.

"This means we will become a smaller, more cost-efficient airline, with a strengthened network and a stronger balance sheet."

Delta filed for Chapter 11 protection on Wednesday last week, after higher fuel prices caused by Hurricane Katrina dealt yet another blow to the ailing airline.

Chapter 11 gives a US company time in which to rearrange its finances while continuing to trade.