The worsening outlook for near-term revenue and “extremely weak business travel demand” has prompted a key ratings agency to further downgrade Delta Air Lines Inc.’s credit rating.

Fitch Ratings said Thursday it was downgrading Delta’s issuer default rating from B to B-. It’s outlook also was listed as negative, meaning further downgrades are possible.

Its credit rating is still higher than many of its legacy competitors including United Airlines, American Airlines and U.S. Airways.

Atlanta-based Delta (NYSE: DAL) and carriers worldwide have been rocked by the global recession, which has chilled passenger demand. Fuel prices have also risen in recent months, though they remain half the records set last summer.

“Despite large 2009 cost savings driven by the sharp decline in jet fuel prices from last summer's peak, Fitch expects DAL to report another year of substantially negative free cash flow in 2009 as the airline struggles to adjust capacity to a diminished level of demand,” the ratings agency said.

Delta announced earlier this month that passenger revenues had dropped 20 percent in the first four months of 2009 compared to the same period in 2008. Falling revenues would overtake more than $6 billion in total benefits Delta expected this year from lower year-over-year fuel prices, benefits from the merger with Northwest Airlines and capacity reductions.

In response the carrier plans to cut system capacity by 10 percent starting in September and trim international capacity an additional 5 percent from what it announced in March, for a 15 percent total reduction in international capacity.

Fitch noted the world’s largest carrier has more than $5 billion in unrestricted liquidity, which “provides DAL with a bigger margin of safety than most of its legacy carrier competitors, (but) the steady erosion of cash balances since last fall threatens DAL's ability to comfortably meet heavy fixed obligations without improved access to capital.”

Fitch credited Delta for its integration with Northwest, but said “many of the projected revenue synergies offered by the creation of a truly global route network are being offset by the collapse of premium business travel demand and intense fare competition across the entire industry.”

Delta has said it hopes to eventually achieve $2 billion in annual merger synergies.

Delta acknowledged earlier this week that the effects of the H1N1 virus will cost the carrier $250 million, and that softness because of swine flu fears remains.

Fitch considers Delta’s ability to maintain at least $4 billion in liquidity critical as it faces debt maturities in 2010 totaling $2.9 billion, though the carrier will likely seek refinancing.