Delta Air Lines Inc said on Monday it plans to invest $1 billion over the next few years to upgrade its aircraft and enhance airport lounges.

The world's largest air carrier said it would spend about $300 million a year through mid-2013 on the initiatives, which include installing full flat-bed seats for business-class travelers on 90 Boeing Co trans-oceanic aircraft and adding first-class cabins to 66 jets operated by regional connection carriers.

Flat-bed seats offer extra legroom and more privacy.

Rather than invest in new aircraft, Delta will be spending its capital to improve the quality and consistency of the on-board product and efficiency of the aircraft we already own, Delta President Ed Bastian said in a statement.

Delta, which acquired Northwest Airlines in 2008, said the moves also included completing modification of 269 pre-merger Northwest planes to add blue leather seats, updated lighting and better amenities such as more overhead bin space. The carrier also said it would install winglets on more than 170 Boeing planes to extend aircraft range and boost fuel efficiency.

The airline's plans also include renovating and expanding its Sky Club lounge in Los Angeles and introducing Sky Club locations in Seattle, Philadelphia and Indianapolis.

Shares of Delta were off 22 cents, or 1.7 percent, at $13.07 on the New York Stock Exchange.

(Reporting by Karen Jacobs; Editing by Steve Orlofsky)

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