Delta reported a first-quarter net loss of $794 million, as the carrier struggled with a drop in passenger demand and fuel-hedge losses while trying to navigate through its acquisition of Northwest.

The Northwest acquisition helped increase Delta’s revenue stream by about 40%, to $5.68 billion, compared with the first quarter of last year.

But the carrier reported a $684 million loss from a decline in value of fuel-hedge contracts. Delta signed those contracts last year as a cushion against fuel prices that spiked at $147 per barrel in 2008.

But as oil prices came down, Delta was stuck with contracts setting fuel prices lower than the highs of a summer ago but much higher than prices through the first quarter of the year.

To help recoup some of its losses to counter the continuing drop in air travel demand, Delta expects to generate more than $100 million annually from a $50 fee for most passengers to check a second bag on an international flight for travel. The fee goes into effect July 1.

"Despite signs of stabilization in recent demand trends, we expect the revenue environment to continue to be under significant pressure for the remainder of the year," said Edward Bastian, Delta's president. "We believe lower fuel prices, combined with a focus on accelerating merger synergies and other initiatives will more than offset the revenue decline."

United reported a first-quarter net loss of $382 million. United also had losses related to the decline in value of fuel-hedge contracts, but they were offset by a return of $395 million of cash collateral from fuel-hedge counterparties. The airline would have lost $579 million excluding that gain.

United’s operating revenue for the quarter was down 21.7%, to $3.69 billion. Operating expenses were down 22.9%, to $3.97 billion, including a 12% decrease in salaries and related costs, a 49% decrease in fuel costs and a 36% decrease in distribution expenses.

Distribution expenses fell from $184 million to $118 million. United last year implemented a plan to cut commission payments to travel management companies and other distributors.