New pilot contract trims Delta’s 2016 earnings

Delta Air Lines announced it made US$923 million in adjusted pre-tax fourth-quarter income, which was down $524 million, year-over-year, a decline the carrier attributed to it’s new pilot agreement, which entailed a substantial retroactive pay hike. The Atlanta-based carrier’s Q4 net income fell 37 percent to $622 million.

Fourth-quarter cargo revenues also slid 9.8 percent, y-o-y, to $174 million. Full-year earnings fell 18 percent, y-o-y, to $668 million.

During Q4, the carrier’s salary expenses jumped $656 million, back-paid through January 2016, and representing a 30 percent increase over the same period in 2015.

“Delta had a year of record-breaking performance in 2016 – financially, operationally and for our customers,” said Ed Bastian, Delta’s chief executive officer.  “As we move into 2017, we are seeing our unit revenues turn positive, which should return the company to margin expansion by the back half of the year.  This will allow us to produce the solid returns and cash flows that investors rely upon from Delta.”