Executives of Delta Air Lines ( DALRQ) may be painting a gloomy scenario of their finances at an arbitration hearing, but the airline's strong asset base virtually assures its survival, according to a top executive at AirTran Holdings ( AAI). "Delta has a tremendous asset base, tremendous assets and routes," said Arne Haak, AirTran's treasurer and vice president of finance, at a Citigroup investment conference Wednesday. "It's probably unlikely that anybody goes away." Consolidation is a hot topic in the airline industry, where Delta and Northwest Airlines ( NWACQ), the third- and fourth-largest carriers, are operating under bankruptcy court protection while they try to cut billions in costs. On Tuesday, seeking to convince an arbitration panel to permit Delta to void a pilots' contract, Delta CFO Ed Bastian said his company is "clearly in the worst shape" and is the "most fragile of anyone in the industry," according to the Associated Press. Haak said that too many people, such as aircraft lessor GE Capital, "have too many interests to see an airline go away, unless the airline completely destroys itself." He said a more likely outcome is that capacity reductions continue. Those capacity reductions are fueling improvement in AirTran's unit revenue, which grew about 15% in the fourth quarter, he said. Delta is AirTran's main competitor, overlapping on 90% of its routes. US Airways ( LCC), which emerged from bankruptcy protection in September, is second, while Northwest is third. All three have been cutting capacity. U.S. domestic capacity is expected to shrink 3% in the first quarter, but capacity will shrink 6% throughout AirTran's system and 13% in Atlanta, the carrier's largest hub. "Going forward, the capacity situation is very supportive of an expanding revenue environment," Haak said. Meanwhile, AirTran is getting bigger, with plans to take delivery of 18 Boeing 737s and two 717s in 2006. Haak said the airline will add just two new cities, White Plains, N.Y., and Seattle, as it seeks to grow in a measured fashion.