Stash of cash up at Delta; United stirs the waters: Executive at rival says his airline wants a merger partner as industry consolidates.

Delta Air Lines said its cash reserves will soon grow to their highest levels in years thanks to a show of support from credit card processors, although the Atlanta carrier also trimmed the top end of its profit forecast for the second quarter.

Also Wednesday, a United Airlines executive revived talk of potential industry consolidation when he told an analysts' conference that his airline would like to team up with a carrier with a strong presence in the Northeast and a hub in the South --- a description that best fits Delta, Continental or US Airways.

Delta said it added about $1.1 billion to its available cash reserves after credit card processors agreed to eliminate a "holdback" on ticket sales, a legacy of the financial crisis that pushed it into Chapter 11 in 2005.

Delta said the cash cushion --- including a $1 billion credit line --- will rise to about $4.2 billion at the end of June. When it entered bankruptcy, the airline had less than $550 million.

Delta had been required to keep cash reserves to protect credit card processors from losing money if it was forced to cancel large numbers of flights. Delta emerged from Chapter 11 at the end of April.

"This new agreement reflects the strong confidence of the financial markets in our ability to deliver on our plan's commitments," Delta Chief Finanacial Officer Ed Bastian said in a release.

Delta also said it expects an operating profit margin of 11 percent to 12 percent in the second quarter, slightly lower than the 11 percent to 13 percent range previously forecast.

Calyon Securities analyst Susan Donofrio said Delta's latest estimate is "right in line" with projections for earnings per share of 57 cents for the quarter. She projects Delta will have a net profit of $228 million this year.

Delta said it still plans to cut domestic capacity up to 6 percent this year while boosting international by as much as 16 percent. Delta has tied much of its financial turnaround to shrinking its domestic operations while adding more profitable overseas flights.

Bastian said the results show that Delta's financial restructuring "remains on track."

Meanwhile, United's finance chief, Jake Brace, told analysts there are candidates for a merger but indicated United has no intention of attempting a hostile takeover, citing last winter's failed bid by US Airways to buy Delta.

"We don't believe that ... hostiles in the airline industry are very successful," he said at the Merrill Lynch Global Transportation Conference in New York. "Our belief is that you have to do something on a consensual basis."

United has touted the need for industry consolidation even before ending a three-year bankruptcy restructuring last year.

The carrier has taken a lower profile on the subject in recent months.

Still, Brace said United would like to combine with another airline that is strong in the Atlantic and needs a Southern-tier hub to strengthen its network.

Airline consultant Robert Mann said Delta is the likeliest candidate, with strengths in both areas.

"If you're just taking the [Brace] hints, you'd say Delta," said Mann.

"He's basically saying the same thing that [CEO Glenn] Tilton's been saying for a long time, which is 'Please, someone write us a big check.' "

Delta CEO Gerald Grinstein disclosed last October that United had contacted the Atlanta-based airline about a possible merger in 2005, which Delta rejected.

The Associated Press contributed to this article.

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