American Airlines Struggles to Match Delta and United in Profitability Despite Market Size

Founded in 1930 through the merger of 80 airlines and shaped further by a 2013 merger with US Airways, American Airlines is today one of the largest global airlines, carrying over 223 million passengers in 2025. Yet, despite its scale, American suffers from one major drawback compared to its main U.S. rivals: profitability. The Dallas-based carrier recorded a record $54.6 billion revenue last year, yet its net income was a modest $111 million, translating to a narrow 0.2% net margin. In contrast, Delta Air Lines and United Airlines posted substantially higher profits and margins, with Delta earning $5 billion (7.9% margin) and United $3.4 billion (5.7% margin).

This vast profit disparity largely stems from American’s strategic choices during and after the pandemic. While Delta and United preserved much of their older widebody fleets with relatively low ownership costs, American retired older long-haul aircraft like the Boeing 757s, 767s, and Airbus A330s amid the pandemic. When demand rebounded faster than anticipated, American’s remaining long-haul capacity was insufficient to serve more than key trunk routes, limiting growth opportunities. Meanwhile, Delta and United not only resumed core routes but also expanded secondary European destinations attracting premium leisure travelers, offsetting weakened corporate demand.

Another critical strategic error was American’s 2023 push to force corporate clients to book directly via the airline by reducing indirect sales channels. This led to a diminished sales department, removal of competitive fares from third-party platforms, and restrictions on mileage accrual through indirect booking channels. The move backfired as major corporate accounts defected to competitors. By 2024, CEO Robert Isom acknowledged the misstep, admitting the airline moved too fast and its execution was poor. Restoring these corporate relationships remains a priority for regaining profitability.

To close the profitability gap, American is focusing on expanding premium offerings and rebuilding its long-haul presence. The airline’s latest Boeing 787-9 fleet exemplifies this shift, configured with fewer seats overall but significantly more lie-flat business class (increasing from 30 to 51 seats) and additional Premium Economy seats. Older aircraft, including Boeing 777-300ERs and 777-200ERs, are also being retrofitted to expand premium cabins. By the end of the decade, American aims to boost its international lie-flat seating capacity by over 50%, signaling a deliberate shift away from lower-yield economy seats toward higher-margin premium passengers.

However, premiumization extends beyond seating configurations. American must enhance the entire passenger experience to compete with carriers like Delta, which excels in customer experience, and United, which leverages a large global network combined with premium amenities. Investments in connectivity, operational reliability, and revamping the AAdvantage loyalty program are integral to attracting and retaining the high-yield corporate travelers who generate a significant share of airline profits.

Encouraging signs of recovery include American regaining its historical share of indirect bookings by late 2025, a strong rebound in managed corporate revenue with a 26% year-over-year increase in Q2 2026, and 13.4% growth in premium passenger unit revenue. The airline also reported a more than 30% rise in AAdvantage loyalty program enrollments, suggesting strengthening customer engagement after the earlier downturn caused by distribution strategy changes.

Long-haul capacity expansion, however, is not just about increasing seat count; it requires deploying aircraft and configurations that maximize premium revenue. American’s strategy with the new Boeing 787-9, which carries 41 fewer passengers than its predecessor but adds 21 business class and 11 Premium Economy seats, is a targeted approach to increase revenue potential on high-yield routes such as those to London Heathrow, Zurich, and Sydney without adding frequencies. With 30 more 787-9s expected through 2029, this premium-focused deployment aims to improve profitability on critical international markets.

Network growth is also being supported by the Airbus A321XLR, which American introduced as the first U.S. operator in December 2025. Its smaller size, with just 155 seats including 20 Flagship Suite business class seats, allows economically viable long-haul service to secondary airports. This could open new markets and feed premium demand without the high cost of larger long-haul jets, helping American diversify its international reach.

Overall, American Airlines is adopting a multipronged plan to regain lost ground by optimizing its premium product and sales strategy, though its relatively late start in these areas has allowed Delta and United to capitalize on post-pandemic market shifts. How swiftly American can translate these strategic adjustments into meaningful profit gains will determine if it can close the sizable gap with its top competitors in the coming years.