Delta Air Lines reported a lower quarterly profit on Wednesday as fuel expenses topped $1 billion despite rising revenue.

Net income was $198 million, or 23 cents a diluted share, for the second quarter, compared with $467 million, or 55 cents a share, a year earlier.

Excluding special items, Delta said profit was 43 cents a share, compared with 44 cents expected by analysts on average, according to Thomson Reuters I/B/E/S.

Quarterly revenue rose 12 percent to $9.15 billion. Operating expenses rose 19 percent, with aircraft fuel and related costs up 36 percent.

Delta said its average fuel price for the second quarter was $3.22 a gallon, up 90 cents from a year ago. It expects an average fuel cost of $3.20 a share for the current period.

Passenger revenue per available seat mile, or unit revenue, rose 10 percent in the second quarter and Delta forecast solid unit revenue improvements for the current quarter.

Airlines are seeing an increase in travel after the 2008/2009 downturn, but are challenged by high fuel and an uncertain global economy that could depress demand later this year. Carriers are raising fares to try to cover higher fuel costs.

Delta, the second-biggest airline behind United Continental Holdings , has invested in new airplane seats and better food and wine offerings to boost revenue. The airline said it would also reduce fourth-quarter capacity 4 percent to 5 percent.

The company said more than 2,000 workers have accepted a voluntary exit program for which 55,000 employees were eligible. Delta is also consolidating facilities in certain U.S. cities and retiring the least-fuel efficient planes.

We still have more work ahead of us to adjust the business to a world where higher fuel prices are the norm, Chief Financial Officer Hank Halter told staff in a memo on Wednesday. We are aggressively pursuing additional revenues, cutting capacity where revenues have not kept pace with fuel costs, streamlining our fleet and reducing our cost structure.

(Reporting by Karen Jacobs, editing by Maureen Bavdek)