Delta Air Lines profit nosedives on pilots’ salary deal

The world's second-largest airline by passenger traffic sees earnings drop like a stone and cites a deal with aviators that raises their wages by 30 per cent.

A Delta Air Lines jet takes off from Tampa International Airport in Florida. The carrier has suffered a decline in profits. Chris O'Meara / AP

Delta Air Lines on Thursday reported a 37 per cent decline in fourth-quarter net profit and forecast passenger unit revenue, a closely watched metric, to be flat to up 2 per cent in early 2017.

The world’s second-biggest carrier by passenger traffic said net income fell to Us$622 million from $980m a year earlier.

Excluding special items, earnings of 82 cents a share met the analysts’ average estimate, according to Reuters.

Delta said the profit decline stemmed from the recent agreement it struck with its 13,000 pilots, granting them a 30 per cent raise by 2019. The four-year deal, ratified on December 1, is retroactive to January 1, 2016.

Operating revenue fell to $9.46 billion from $9.5bn, slightly above the analysts’ average estimate of $9.4bn.

Delta shares were down 10 cents at $51.35 in premarket trading.

* Reuters

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