Delta’s profit tumbles

Delta planes line up at their gates while on the tarmac of Salt Lake City International Airport in Utah
Thomson Reuters

On Thursday, Delta Air Lines reported a 36.5 percent decline in fourth-quarter profit and forecast passenger unit revenue, a closely watched metric, to be flat to up 2% in early 2017.Much of Delta’s decline in profits can be attributed to a new union contract for its pilots which kicked in late last year.During the fourth quarter, the airline’s salary expense jumped $656 million which is equivalent to a 30% increase over the same period in 2015.Net income fell to $622 million, or 84 cents per share, in the fourth quarter ended Dec. 31, from $980 million, or $1.25 per share, a year earlier.On an adjusted basis, the No. 2 airline by passenger traffic earned 82 cents per share.Total operating revenue fell to $9.46 billion from $9.50 billion.For the year, Delta reported $39.64 billion in operating revenue with $4.37 billion in net income. Both metrics are down 3% versus 2015.(Reporting by Ankit Ajmera in Bengaluru; Editing by Shounak Dasgupta)