Shares of Delta Air Lines Inc. (DAL) fell further below $1 a share Tuesday after several ratings downgrades and an analyst's assertion that the nation's third-largest carrier will shrink if it files for bankruptcy, as expected.

JP Morgan airline analyst Jamie Baker estimated in a research note that Atlanta-based Delta will reduce capacity by 15 percent from current levels, similar to the shrinkage of the two other major airlines in bankruptcy, United and US Airways (search).

The comments came as Delta prepares to file for bankruptcy. An industry consultant who has been informed of the company's plans told The Associated Press on Monday that the filing was expected to come Wednesday afternoon, but could be pushed to Thursday depending on when Delta secures roughly $2 billion in debtor-in-possession financing it is seeking.

Delta shares fell 7 cents, or 8.2 percent, to close at 78 cents in trading Tuesday on the New York Stock Exchange.

Baker said the bankruptcy filing would come as no surprise for Delta, which has racked up nearly $10 billion in losses since January 2001. In downgrading his rating on Delta to underweight from overweight, Baker said he believes Delta will continue to retire, sell or swap certain aircraft types as it simplifies its fleet.

"While it may ultimately be reported that Katrina knocked Delta from the sky, management's apparent inability to vigorously pursue asset sales, debt-for-equity exchanges, credit card processor replacement, wage reductions, and all-around liquidity raising in light of dramatically higher fuel prices rank among the primary reasons for our updated outlook," Baker wrote in his research note.

Hurricane Katrina hit Delta hard because of the airline's presence in the South. It had canceled commercial flights to New Orleans and Gulfport, Miss., since the hurricane hit Aug. 29.

Delta said Tuesday that it has resumed commercial flights to New Orleans. It operated one flight there on Tuesday and plans more on Wednesday and Thursday. Its partner carrier, Atlantic Southeast Airlines, which it recently sold to SkyWest Inc., resumed flights to Gulfport on Saturday, but mainline Delta doesn't plan to resume service to Gulfport until Sept. 20.

Delta has not said how much it has lost because of the hurricane.

Besides the JP Morgan downgrade, Moody's Investors Service late Monday lowered certain debt ratings that apply to Delta. The bond rating agency cited as a reason the increasing likelihood that Delta will need to reorganize its obligations, either in or out of bankruptcy, because of its difficult operating environment.

Meanwhile, Delta is seeking a new round of concessions from its pilots. The pilots union said in a memo to its members that at a meeting with management Monday, the company presented the union with a "comprehensive, deeply concessionary contract proposal." The memo did not put a dollar amount on the concessions that Delta is seeking. A union spokeswoman said Tuesday that the union's executive committee will discuss the proposal at meetings starting Monday.

Delta is expected to pledge its few remaining unencumbered assets as part of the bankruptcy financing agreement it is seeking with creditors, including GE Commercial Finance (search). Most of the airline's other assets are already pledged as collateral for loans.

Delta has declined to comment on the bankruptcy reports.

The filing would make Delta the third major U.S. carrier to enter Chapter 11 since the 2001 terrorist attacks, joining Elk Grove Village, Ill.-based UAL Corp. (search) , parent of United Airlines, and Arlington, Va.-based US Airways Group Inc (search) , which has filed twice in the last three years.

Some smaller carriers, including Honolulu-based Hawaiian Airlines and Indianapolis-based ATA Airlines Inc., also have filed for bankruptcy in recent years.