Delta Air Lines posted a 2016 net profit of US$4.4b, down 3% from net income of $4.5b in 2015, as higher labour costs drove a slight decrease in earnings. Delta’s full-year earnings report indicates the revenue environment remained sluggish in the US airline market in 2016, with the carrier’s revenue dropping 3% year-over-year to $33.8b. Costs for 2016 fell just 1% compared to 2015 to $32.7b as employee salaries rose 14% to just over $10b. Operating income in 2016 was just under $7b, down 11% from an operating profit of $7.8b in 2015. The labour cost rise was primarily driven by a new contract approved by Delta’s pilots in Q4. The airline’s Q4 outlay in salaries jumped 30% year-over-year and a retroactive pay raise to Jan 1, 2016 further increased full-year costs. <br/>
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Air France-KLM Group CE Jean-Marc Janaillac delivered a downbeat assessment of the carrier’s prospects for 2017, saying it faces “difficult” times in the year ahead amid rising oil prices and an ongoing struggle to rein in expenses. Weak margins combined with high debt remain the greatest challenges to Europe’s biggest airline, Janaillac said Wednesday. He declined to comment on the status of talks with pilots linked to the cost-cutting drive, citing the need to build trust with unions. “We will have to face the increase of oil prices, of the dollar, and an increase in interest rates, and this while our profitability is weak and we have a high debt without the option of appealing to our shareholders, given our weak stock valuation,” the CE said. Air France-KLM had sales of about E25b last year and a positive net result. <br/>
China Southern Airlines’ parent China Southern Group transported 115m passengers in 2016, up 4.8% over 2015. The Group reported a 3.2% increase in operating revenue to CNY115.8b (US$16.7b) and a “record high profit,” although the company did not disclose figures. Industry analysts credited low fuel prices and continuous market demand growth as main reasons for the improvement, despite airfare declines on international routes resulting from fierce competition and fast capacity growth. This year, China Southern is expected to embrace a more international focus, boosting capacity 32%. According to China Southern Group GM Tan Wangeng, the carrier will open Guangzhou-Vancouver-Mexico and Guangzhou-Keynes services as well as increase frequencies to Southeast Asia. <br/>