NEW YORK - The H1N1 influenza virus cost Delta Air Lines $250 million in revenue, and the world's largest airline has cut capacity during the second quarter in response to the reduced demand, its chief executive said at the company's annual shareholders meeting on Monday.

The H1N1 virus, we estimate, in both our Latin America and Mexico, and particularly Asian business has impacted revenues by about $250 million, Delta CEO Richard Anderson said. The steps we are taking have essentially involved capacity because the flu has decreased demand.

Airlines are still grappling with the effect of the virus, formerly known as swine flu, on travel demand. The virus compounded the industry's concerns, which included a sharp falloff in travel demand, particularly from business travelers.

Anderson said Delta had significantly reduced capacity in Mexico and Latin America during the second quarter, but expected to add some back during the remainder of the year. Weakness in demand in Asia prompted the Atlanta-based airline to cut capacity there.

Delta shares were down 12 cents, or 2 percent, at $5.95 in early trading on the New York Stock Exchange. (Reporting by Deepa Seetharaman; Editing by Lisa Von Ahn)

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