Delta Air Lines Inc. (NYSE:DAL) saw its net profits plunge by 37% in the fourth-quarter as a 30% jump in salaries and related costs weighed on the US firm.
The country’s No. 2 carrier by passenger traffic reported net income of $622mln, down from $980mln a year earlier.
Delta said the profit decline stemmed from the recent agreement it struck with its 13,000 pilots, granting them a 30% salary hike by 2019.
The four-year deal, ratified on December 1, is retroactive to January 1, 2016.
In early New York trading, Delta shares were down 0.1% to US$51.39.
However, excluding special items, Delta’s earnings per share of 82 cents hit analysts' average estimates as expenses for aircraft fuel and related taxes fell 12%.
The Atlanta-based airline’s operating revenue fell to $9.46bln from $9.50bln, slightly above the analysts' average estimate of $9.40bln.
Delta said unit revenue -- how much an airline takes in for each passenger flown a mile -- fell 2.7% on a 0.9% increase in capacity in the fourth-quarter.
The airline said it expects its first-quarter unit revenue to be unchanged to up 2% as capacity remains flat or falls by as much as 1%.
Unit revenue in the airline sector is approaching positive territory after two years of declines amid rapid capacity growth in the industry.