Delta Air Lines'

(DAL) - Get Report

future cash needs are looking greater than previously thought.

Delta said Monday it will need $135 million in liquidity in early 2006 beyond what it has already disclosed, and it provided another hint that intermediate and long-term parts of a debt exchange are receiving a weak response. In a news release, the airline said its new liquidity projection assumes only the short-term portion of the exchange succeeds. Last Tuesday, Delta said the amount of intermediate and long-term debt tendered so far was "substantially below minimum exchange conditions. The exchange ends Nov. 18.

The airline said it has already nailed down about $50 million of the additional $135 million it expects it will need and is pursuing other deals to meet the remaining $85 million.

Also in Monday's release, the airline said it plans to issue up to 12 million shares of common stock to unspecified lenders who agree to defer debt maturing in the near term and to aircraft lessors who grant Delta concessions.

Delta racked up a huge third-quarter loss and is bleeding cash in an environment of record-high fuel prices, overcapacity and tough price competition that has hurt all U.S. network carriers. The nation's third-largest airline is desperately seeking to lower its costs and restructure some of its $20.6 billion in debt. Delta has warned repeatedly that it could be forced to file for Chapter 11 bankruptcy protection.

On the cost savings front, Delta said Monday it had secured commitments from more than 100 of its vendors and suppliers for about $29 million in annual savings.

Among other details of its transition plan, Delta said pilots are not the only employees who soon may receive a bigger stake in the airline.

Delta said it plans to give out stock options on a total of 63 million shares to 57,000 U.S.-based employees, including pilots. The company said it would grant the options in the "near term" but declined to be more specific. The options would have an exercise price equal to the stock's closing price on the date of the grant. Employees would be able to exercise the options in three equal installments on the first, second and third anniversaries of receiving them. The program would require New York Stock Exchange approval.

Delta has about 126 million shares outstanding. The options could give employees an equity stake in the company of roughly 30%.

Delta's pilots have already been promised options to purchase 30 million shares of stock as part of a tentative agreement their negotiators have reached with management. Pilots are voting on the package of wage and benefit concessions this week, with a deadline set for noon Thursday EST. The package, which will save Delta an estimated $1 billion a year, includes a 32.5% cut to pilots' base pay, a 16% reduction in vacation pay and the freezing of pilots' defined benefit pension plan at the end of this year. Pilots would receive a 401(k) plan beginning at the start of next year.

Delta shares were up 9 cents, or 1.5%, at $6.24.