Delta Air Lines , the world's biggest air carrier, reported a much narrower fourth-quarter loss on Tuesday as cost cuts overshadowed revenue pressures.

The company, which acquired Northwest Airlines in 2008, expects positive improvement in revenue per available seat mile (RASM) each month of this year as the recovery takes hold.

Delta posted a net loss of $25 million, or 3 cents a share, for the fourth quarter, compared with a loss of $1.44 billion, or $2.11 a share, a year earlier.

Excluding items such as merger-related expenses, Delta said its loss for the latest period was $225 million, or 27 cents a share.

Analysts on average expected a loss of 24 cents, according to Thomson Reuters I/B/E/S.

Operating revenue rose 1 percent to $6.8 billion in the quarter while operating expenses fell 12 percent.

(Reporting by Karen Jacobs; Editing by Derek Caney)