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Delta Air Lines’ fourth-quarter profit topped analysts’ expectations.
Its first-quarter forecast projected higher labor costs.
Delta pilots’ union is reviewing a contract proposal this week.

Delta Air Lines Airbus A330neo or A330-900 aircraft with neo engine option of the European plane manufacturer, as seen departing from Amsterdam Schiphol AMS EHAM International airport.
Nicolas Economou | NurPhoto | Getty Images

Delta Air Lines fourth-quarter profit and revenue topped expectations on Friday, but shares fell on the carrier’s outlook for the first quarter.
Delta expects to earn 15 cents to 40 cents a share on an adjusted basis in the first quarter of 2023 and for its sales to increase 14% to 17% over the same quarter of 2019, with capacity down 1% from four years earlier.

But it said unit costs, stripping out fuel, will likely increase 3% to 4% from 2022, including for labor and rebuilding its network. Delta pilots’ union are reviewing a contract proposal this week that includes raises topping 30% over four years.
Delta reiterated its full-year 2023 earnings estimate of $5 to $6 a share.
The company’s shares were down roughly 4% in premarket trading Friday.
Here’s how Delta performed in the fourth quarter, compared with Wall Street expectations based on Refinitiv consensus estimates:

Adjusted earnings per share: $1.48 vs. $1.33 expected.
Adjusted revenue: $12.29 billion, excluding refinery sales, vs. $12.23 billion expected.

The airline generated $13.44 billion in total sales for the final three months of 2022, 17% higher than the $11.44 billion it brought in three years earlier.

High costs ate away at some of Delta’s profits, but its net income still totaled $828 million, down from $1.1 billion in the same three-month period of 2019, but on 9% less flying than three years earlier. It was a sign of travelers’ willingness to continue booking, even at high fares, which more than made up for the higher expenses.
Delta’s operating costs rose 19% in the fourth quarter from 2019, including a $2.8 billion fuel bill, up 42% from a year ago.
Delta CEO Ed Bastian said in a news release the carrier “rose to the challenges of 2022, delivering industry-leading operational reliability and financial performance.”
Bastian told CNBC that demand for premium products has remained robust. In the airline’s release, it said that premium revenue, which includes seats in first class, rose 13% in the last quarter, 8 points above sales growth from the main cabin.
Delta has been cracking down on crowding in its luxury airport lounges, the result of strong demand for rewards credit cards and travelers with elite status. Next month it will raise the requirements for entry, and this week, said it is curbing employee access to Sky Clubs.
Airlines have largely been upbeat about the fourth quarter, despite concerns about a recession and weakness from some retailers and other businesses. On Thursday, American Airlines hiked its revenue and profit forecast for the period, sparking a broad rally in the sector.
That was even after severe winter weather disrupted flights coast to coast over the year-end holidays, prompting mass cancellations. Southwest Airlines in particular struggled to recover and said its meltdown could cost it more than $800 million. American and Southwest report on Jan. 26.
“There was a lot of customers looking for airlines given some of the Southwest challenges, and we got a benefit from that,” Bastian said in an interview with CNBC’s “Squawk Box.”

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Despite falling inflation, many Americans will rely on their tax refund to make ends meet, according to a survey from Credit Karma.
You may avoid tax refund delays by filing an error-free, electronic return with direct deposit, financial experts say.

Bill Oxford | E+ | Getty Images

Despite falling inflation, many Americans are still struggling financially and will need their annual tax refund to help cover the basics. 
Some 30% of Americans overall say they will rely on their tax refund to make ends meet, according to a survey released Wednesday by Credit Karma, which polled roughly 1,000 U.S. adults in early December. The percentages were even higher for Gen Zers and millennials, 40% and 46% of whom, respectively, say they will depend on the payment.

“Nearly three-quarters of Americans are expecting a tax refund this year and for many it will be the most significant financial windfall of their year,” said Courtney Alev, consumer financial advocate at Credit Karma.
More from Personal Finance:Here’s the inflation breakdown for December 2022 — in one chartIRS to start 2023 tax season stronger, taxpayer advocate saysSocial Security checks to include 8.7% cost-of-living adjustment this month
While many Americans count on yearly tax refunds, financial difficulties may be greater this season after a year of soaring costs.
Annual inflation fell to 6.5% in December, the U.S. Bureau of Labor Statistics announced on Thursday. While prices are dropping, annual inflation remains at the highest level in decades.  
Meanwhile, the IRS has warned taxpayers that refunds may be smaller in 2023 now that many pandemic-era tax breaks, such as bigger child tax credits or more generous charitable deductions, have expired. In 2022, the average refund was $3,176 as of Oct. 28, according to the IRS, up nearly 14% from $2,791 in 2021.

How to get a faster tax refund

If you’re banking on getting a tax refund, financial experts say there are a few ways to avoid issues that may delay the process. 
John Loyd, a certified financial planner and owner at The Wealth Planner in Fort Worth, Texas, urges taxpayers to file electronic returns. “There’s a saying in the tax world,” he said. “Any time you mail something to the IRS, you want to assume that it’s going to get lost.”
While the agency typically issues tax refunds within 21 days, paper-filed returns may take longer to process. “Taxpayers should prepare to file electronically and choose direct deposit for their tax refund,” the IRS said in a news release.  
Loyd said tax return errors are another reason for processing delays. Incorrect personal information, such as your Social Security number or mismatching data from tax forms, may take extra time to resolve. 
The tax season opens for individual filers on Jan. 23, the IRS announced Thursday.

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Total spending on personal luxury goods by South Koreans year-on-year grew around 24% to $16.8 billion, amounting to $325 per capita.
Morgan Stanley analysts explained the demand for luxury goods among South Korean buyers is driven both by an increase in purchasing power as well as a desire to outwardly exhibit social standing.
The investment bank also noted luxury houses have tapped Korean icons to further catalyze demand.

Handbags displayed in a Chanel SA store window at the Avenuel department store, operated by Lotte Shopping Co Ltd., in Seoul, South Korea, on Tuesday, Dec. 14, 2021.
SeongJoon Cho | Bloomberg | Getty Images

Whether it’s calf-leather Italian Prada bags or classic, checkered British Burberry trench coats, South Koreans are the world’s biggest spenders on personal luxury goods per capita, Morgan Stanley said.
The investment bank estimated South Korean total spending on personal luxury goods grew 24% in 2022 to $16.8 billion, or about $325 per capita. That’s far more than the $55 and $280 per capita spent by Chinese and American nationals, respectively, according to Morgan Stanley estimates.

Luxury brands have also highlighted strong sales in Korea.
Moncler said its revenue in South Korea “more than doubled” in the second quarter compared with before the pandemic. Cartier-owner Richemont Group said Korea was among the regions where sales grew by double digits in 2022, compared with both a year and two years ago.
While Prada said China lockdowns contributed to a 7% decline in 2022 retail performance, the fashion house said the drop was “mitigated by the strong performance in Korea and South East Asia.”

Markers of financial success

Morgan Stanley analysts explained the demand for luxury goods among South Korean buyers is driven both by an increase in purchasing power as well as a desire to outwardly exhibit social standing.
“Appearance and financial success can resonate more with consumers in South Korea than in most other countries,” analysts wrote in the report.

People attending a Gucci ‘pop-up store’ event in the Gangnam area of Seoul in September 4, 2015
Ed Jones | Afp | Getty Images

Displays of wealth are also more socially acceptable in Korean society. A McKinsey survey found that only 22% of Korean respondents consider showing off luxury goods to be in bad taste, compared with 45% of Japanese and 38% of Chinese.
The demand in luxury wares was also supported by the increase in household wealth. Bank of Korea data shows the country’s household net worth rose 11% in 2021. About 76% of household wealth in Korea is in real estate, prices for which have increased substantially since 2020.
The investment bank also noted luxury houses have tapped Korean icons to further catalyze demand.
“Nearly all of the major Korean celebrities are brand ambassadors of the leading luxury houses,” the report noted, like Fendi and actor Lee Min-Ho or Chanel and rapper G-Dragon.
Dior made Blackpink singer Rose the face of its HardWear collection, which the fashion house said was “very well-received” and doubled sales for the line.
However, Bain & Company cautioned against the use of per capita metrics for luxury good consumption.
“Luxury by definition is not a mass market product,” Bain & Co partner Weiwei Xing told CNBC.
“I would suggest to prorate the total luxury spending by number of population that’s middle class and above, which would be a more meaningful measure to reflect attitude and consumption towards luxury,” Xing said, adding that would narrow the gap.

A customer carries a Chanel SA shopping bag in Seoul, South Korea, on Tuesday, Dec. 14, 2021.
Bloomberg | Bloomberg | Getty Images

Untapped potential in China

Still, Morgan Stanley said the thriving Korean luxury market is a “good preview” of what the Chinese luxury market could become, which it said remains “underpenetrated.” The analysts said the two countries share similarities in disposition toward luxury items as status markers.
Presently, South Korean annual per capita spend on luxury goods remains more than six times higher than that of Chinese spenders.
Globally, McKinsey projected the luxury market to grow between 5% and 10% in 2023, buoyed by demand from the U.S. and China.
“We expect growth to resume after China recovers from the current Covid waves, which should happen by the first quarter,” Xing said.

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Singapore’s Minister for Health Ong Ye Kung told Parliament Monday that the government is not imposing new restrictions on travelers from China because limited flight capacity, combined with its current border policies, have resulted in few imported cases — and even fewer severe cases — coming from China.
Ong said the government is “acutely aware” that some Singaporeans are worried that an influx of visitors from China could lead to a rise in infections.

But he said travel volumes between Singapore and China are “very low” — with fewer than 1,000 people arriving from China daily.
“As of now, we run 38 weekly flights from China to Singapore, compared to around 400 flights pre-Covid,” he said.
Ong acknowledged that a new, more dangerous variant could emerge from China as the virus spreads through its population of 1.4 billion, but said that so far, this has not materialized.

With extensive vaccination coverage, we can treat Covid-19 as an endemic disease.

Ong Ye Kung
Singapore’s Minister for Health

Ong said Singapore is monitoring this through GISAID, a non-profit organization that he said is obtaining viral sequencing data from authorities in major Chinese cities and provinces, such as Beijing, Shanghai and Sichuan, which is processed in GISAID’s Singapore office.
Though there are “gaps in the data,” Ong said, “So far, the data shows that the epidemic in China is driven by variants that are well-known and have been circulating in other regions of the world” — namely BA.5.2 and BF.7.

Current rules are effective

So far, more than a dozen countries have announced new rules for visitors from China. But Ong said Singapore did not, because it already has effective border measures in place.
“Many countries have dismantled all their border measures,” he said. “Singapore … kept relevant measures precisely because we anticipated these risks.”

Singapore’s Health Minister Ong Ye Kung attends a meeting at the G-20 Summit in Bali, Indonesia, on Oct. 27, 2022.
Sonny Tumbelaka | Afp | Getty Images

He said that while “many Singaporeans have forgotten about it,” all travelers must be either fully vaccinated or test negative for Covid before entering, which is the same requirement that Spain recently announced for travelers from China.
While South Korea has reported that up to 80% of its imported cases are coming from China, Ong said that, in December, less than 5% of Singapore’s imported cases — about 200 people — were from China, while “ASEAN countries accounted for over 50%.”
In the same month, seven imported cases became severely ill, and only one was from China, he said.
“Most were Singaporeans returning from these countries and regions,” he said. “These are not large numbers, so the impact on our healthcare system was very small.”

Singapore’s ‘greatest concern’

The government’s “greatest concern” is the emergence of a new, more dangerous variant that could escape vaccine protection — “a nightmare variant [that] can knock us back to almost square one,” Ong said.
If that happens, “We may need to reinstate measures such as strict border controls, quarantine for travelers, social restrictions including limit on group sizes, until a new and effective vaccine is developed.”
To monitor this, Singapore will stay plugged into the “global surveillance system,” he said.
Ong said the other key concern is protecting Singapore’s health-care system. He said that during the early stages of the pandemic, infections were the government’s primary concern, but as vaccines have been rolled out, it’s now focused on severe infections.

He said 60% of those aged 18 years and above were up to date with their vaccinations at the end of 2022.
“In the past 30 days, the number of Covid-19 patients in the Intensive Care Unit is in the low single digit,” he said. “Hence, with extensive vaccination coverage, we can treat Covid-19 as an endemic disease.”

Why other rules may not work

Ong cast doubt on the effectiveness of some travel rules being imposed on Chinese travelers:  

PCR tests on arrival “are too late, because the travelers are already within your borders,” plus they are sensitive, which means they will “yield a large number of positive cases from countries that are experiencing or have just experienced a big wave,” since recovered travelers can shed dead viral fragments for weeks.
Wastewater tests from airplanes rely on solid waste, which will be of limited use since the flight time from China to Singapore isn’t that long.
Pre-departure tests “can be useful … [to] reduce the number of imported infections” but low travel volume between Singapore and China “limits the number of imported infections more.” 

Ong added that if Singapore tested all travelers coming from China, questions would arise about travelers from other regions who contribute more infections and severe cases.

Ong called Covid outbreaks “the new norm,” saying “Today it is China, tomorrow another region.”
Roslan Rahman | Afp | Getty Images

“Further, by triggering [pre-departure tests] on travellers from one part of the world experiencing high infection numbers, are we contributing to an international precedent of imposing tests on travellers from countries experiencing an infection wave?”
Ong added: “How will other countries treat travellers from Singapore when we encounter another infection wave?”

‘We do not discriminate’

Increasing flights with China

Singapore appears to have stayed in the good graces of the Chinese government and its residents. Rein said Chinese travelers are now headed to Singapore, as well as Thailand, because “both countries are welcoming us.”
Singapore Airlines reinstated passenger service from Singapore to Beijing in late December. To start, the service will run just twice a month.   
Yet flights between Singapore and China are “less than 10% of the number of flights pre-Covid” — accounting for some 1.5% of Singapore’s Changi Airport’s total flights, Singapore’s Minister of Transport, S. Iswaran, said Monday.
Overall, passenger traffic and weekly flights at Changi Airport have returned to 80% of pre-pandemic levels, he said.
“Singapore and Chinese airlines have applied to operate more flights between the two countries,” Iswaran said, adding that the government is taking a “careful and calibrated” approach to restoring air connectivity with China.  
Right now, more than 60% of inbound travelers from China are Singapore citizens, permanent residents or long-term pass holders, Iswaran said.
“China’s opening up to the world is great news and something we are looking forward to,” said Ong, adding that the government will carefully adjust travel volume “at least until the infection wave has clearly subsided in China.” More

Lucid said it produced a total of 7,180 vehicles in 2022, enough to beat the guidance range it issued in August.
The luxury EV maker produced nearly 3,500 Air sedans in the fourth quarter, its highest quarterly total yet.
Lucid will report its fourth-quarter financial results on Feb. 22.

With 1,050 horsepower, the new Grand Touring Performance edition becomes the most powerful version of Lucid’s electric Air sedan.
Lucid Motors

Electric luxury vehicle maker Lucid Group said it produced just over 7,100 vehicles in 2022, slightly more than expected. The company told investors in August to expect production of between 6,000 and 7,000 vehicles for the full year.
Shares of the company gained nearly 5% Thursday following the news.

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Lucid said in a statement that it produced 3,493 vehicles at its Arizona factory in the fourth quarter and delivered 1,932, bumping its total production to 7,180 for the full year. Lucid’s fourth-quarter production total was up 53% from the third quarter, when it produced 2,282 Air sedans and delivered 1,398.
Lucid warned in November that its delivery totals were likely to lag its production for the next few quarters as it worked through logistics challenges. The company delivered a total of 4,369 vehicles in 2022.
Lucid’s 2022 production beat its guidance, but that guidance was much reduced from the company’s original plan for the year. Lucid had originally expected to build 20,000 of its Air electric luxury sedans in 2022, but it was forced to lower that target twice – once in February amid global supply chain disruptions, and again in August, when it cited those logistics challenges.

Lucid didn’t provide an update on its total number of reservations.
Lucid’s most recent reservations update was as of Nov. 7, when it said it had “over 34,000” reservations for the Air. Lucid said in April that Saudi Arabia’s government had agreed to buy up to 100,000 of its vehicles over the next 10 years; those vehicles aren’t included in its reservation totals.

Lucid will report its fourth-quarter and full-year financial results on Feb. 22.
Correction: Lucid produced more vehicles than expected in 2022. An earlier headline misstated the company’s news update.

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Delta Air Lines plans to curb employee access to its plush and popular airport lounges next month to reduce crowding.
Travel rewards credit cards have added to the lounges’ popularity.
The new change bars staff who are traveling for free from using the lounges, even if they have access through their personal credit cards.

The Sky Lounge during a tour of Delta Air Lines Terminal C at LaGuardia Airport (LGA) in the Queens borough of New York, US, on Wednesday, June 1, 2022.
Stephanie Keith | Bloomberg | Getty Images

Delta Air Lines plans to curb employee access to its plush and popular airport lounges next month, its latest attempt to ease crowding.
Starting Feb. 2, Delta won’t allow employees to use the airline’s airport Sky Clubs when they’re flying standby with company travel privileges, the carrier told staff in a long memo on Wednesday. They will also be barred from using the Sky Clubs when traveling for company business.

“The employee discount on Delta Sky Club memberships also is discontinued,” said the memo, which was seen by CNBC. “While we understand this may be disappointing, know this decision was not made lightly. We are sure you’ll agree that delivering an elevated experience to our most loyal customers must be our priority.”
The lounges aren’t free for Delta employees. But they’ve been able to access them, provided they have certain credit cards or buy Sky Club memberships, while traveling with employee benefits or flying on nonrevenue seats, so-called nonrevving. Next month, staff will only be granted access to the lounges if they’re flying with a paid-for ticket.
Complimentary seats on planes are a major perk for airline staff, and they aren’t just used for vacation. Pilots and flight attendants often don’t live in their airline base cities and commute to work without paying for seats if space is available.

“When we put our customers first and ensure that they have the best experience, they will continue to prefer Delta’s premium products and services — which ultimately benefits all of us,” the memo went on to say.
Delta previously announced stricter policies for Sky Club entry for regular customers, also set to take effect in February.

“Delta people understand the role we all play in delivering an elevated customer experience. That’s why employees will refrain from accessing Delta Sky Clubs when using their standby travel privileges or traveling for company business,” the airline said in a statement.
The measures come as Delta tries to reduce long lines and crowds at the lounges. Travelers have returned in droves, bearing piles of frequent flyer miles accumulated during the Covid pandemic and American Express rewards cards that grant entry to the clubs.
Delta and other major carriers are making elite status harder to earn this year in response, scaling back after pandemic freebies that allowed grounded customers to hold onto their perks. They are also making lounges bigger.
The changes announced Wednesday also apply to other airlines’ employees who are flying with Delta through complimentary staff travel benefits. A Delta spokesman said data wasn’t available on how many employees use its airport lounges while nonrevving.
Employees and retirees who bought club memberships or have Amex cards that come with lounge access can request a prorated reimbursement from Delta, the airline said.
“The solution to their own self-created crowding problem is to boot their own employees,” said one Delta pilot, who spoke on the condition of anonymity because he isn’t allowed to speak with the media. The pilot said that he and his wife each have an Amex Platinum card, which carries a $695 annual fee, and that he uses a Sky Club once a month to “go get an hour of peace and quiet” before a dayslong assignment. The lounges offer a wide array of free food, drinks, seating and workspace.
“We’re not freeloaders,” said the pilot. He said while “I’m not Jeff Bezos” he and his wife spend thousands a month on their Amex cards, but that he’s considering canceling them because of the lounge access change.
A spokeswoman for the Delta pilots’ union, the Air Line Pilots Association, declined to comment and said the benefit isn’t one that’s negotiated in aviators’ contract. Union leaders have been reviewing a new contract proposal this week that could lead to a tentative agreement.
A Delta flight attendant who also spoke to CNBC on the condition of anonymity for similar reasons as the pilot, called the decision “awful and humiliating.”
“This is a decision Spirit would make, not legacy Delta,” said the flight attendant, referring to the industry’s banner budget airline, which doesn’t have lounges.
Delta last year encouraged senior leaders to skip the Sky Clubs to avoid crowding. Delta didn’t say if it had plans to reverse the policy, which after Feb. 2 will be in effect “until further notice.”
American and United say they aren’t planning similar policy changes for their lounges, though carriers occasionally tweak employee travel policies. For example, those carriers paused certain employee travel perks to London over the summer due to congestion.

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Nike CEO John Donahoe said the brand is “really focused” on Gen Z consumers in China and continues to see strong demand in the region.
The brand has been grappling with a glut of inventory but aims to see levels normalized by the end of the fiscal year in May.
Amid a push to strengthen its direct-to-consumer channels, Donahoe said wholesalers remain “very, very important” to Nike.

Nike CEO John Donahoe said Thursday the company is “really focused” on Gen Z consumers in China and that the athletic apparel retailer is continuing to see strong demand in the region, even amid Covid-related disruptions. 
“We’re still the number one cool and favorite brand in Shanghai and in Beijing. We’re really focused on the Gen Z consumer in China, we saw a very good response from the Gen Z consumer who wants the most innovative products and wants brands that are globally relevant,” Donahoe told CNBC’s “Closing Bell.” 

“We saw good response in Q2, and we have the same focus and outlook going forward,” he said.
At the end of Nike’s fiscal second-quarter, ended Nov. 30, China’s “zero Covid policy” was still in effect and 1,500 Nike stores across the region were shut down, leading to a 3% drop in sales compared with the year-ago period.
Revenue in China – the sneaker giant’s third-biggest market by revenue – was down 22% during the period from the same quarter in 2021, when Covid disruptions were more stable in the region.
Donahoe didn’t address whether spending has ramped back up now that China has rescinded its zero Covid policy and reopened, but he said the company is confident the region remains a strong market. 

Read more about China from CNBC Pro

“We factored in some disruption in our outlook, but we view that as transitory, we still believe in the fundamentals of China,” said Donahoe. 

“We invested in building hyperlocal product where we take an iconic franchise like Air Force One, or Dunk and we localize it so it’s relevant for the Chinese consumer — and the Chinese consumer really responded to that,” he said.
For the last several quarters, Nike, like other retailers, has been grappling with a glut of inventory but Donahoe said the problem is primarily in North America and the company aims to see levels normalized by the end of the fiscal year in May. 
“The consumer is still paying list price for the Nike products that they know and love. In the areas where we have excess inventory, which is primarily apparel in North America, we are working through it. We’re discounting and working through it,” said Donahoe. 
Recently, the sneaker giant has tried to move away from wholesalers in favor of a direct-to-consumer strategy, but during its most recent fiscal quarter, wholesale revenue jumped 19% – largely because the company finally had the inventory available to sell to those partners. 
Nike has invested heavily in its direct-to-consumer strategy, but Donahoe glossed over that focus on Thursday and said wholesalers remain “very, very important” to Nike. 
“Consumers in this day and age want to get what they want, when they want it, how they want it, and in our industry, they’ve been very clear they want a premium and consistent shopping experience regardless of channel,” he said.  
The top executive also brushed off concerns over the macroenvironment, saying, “We’re prepared for anything but our focus is to make sure that we get stronger through this period, regardless of how the inflation and economy play out.”

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