Can American Airlines Really Close the Profit Gap With Delta and United? Here’s the Plan

CEO Robert Isom says premium cabins, new lounges and reliability fixes can erase a $3 billion gap with United — and an even wider one with Delta.

American Airlines CEO Robert Isom said in remarks published Sunday that the carrier is investing in premium cabins, lounges and new aircraft to close a $3 billion profit gap with United — and an even wider gap with Delta.

The remarks, made in an interview with CNBC published Sunday, came days before American’s second-quarter earnings report, due Thursday. United generated about $3 billion more profit than American last year, and Delta’s advantage was even wider, according to CNBC. Isom said the airline’s next phase of growth depends less on getting bigger and more on generating greater revenue from every passenger.

Isom’s turnaround plan centers on improving profit margins rather than simply flying more passengers. Executives are prioritizing reliability, premium products, loyalty growth and network improvements, and the airline is weighing a wide-body aircraft order that could come as early as this year.

American is upgrading more of its Boeing 777 and 787 aircraft with new premium suites and evaluating additional jets from Boeing or Airbus to support international expansion, though any such order would not enter service until early in the next decade. The airline’s new “Flagship Suites” — lie-flat business-class seats with sliding doors, Bluetooth audio and wireless charging — debuted on Boeing 787-9 Dreamliners in June 2025. The reconfigured jets carry 51 business-class seats, including eight with extra room, plus 32 premium-economy seats and 161 economy seats, along with Viasat high-speed Wi-Fi.

American plans to add Flagship Suites to more Boeing 777-200 and 777-300 aircraft by the end of this year and began installing them on Airbus A321XLR jets flying between New York’s Kennedy Airport and Los Angeles in December 2025. The airline aims to expand premium seating capacity by 30% across its domestic fleet and 50% on long-haul routes by 2030. By the end of the decade, Isom has said, he expects half of American’s revenue to come from premium products.

Attracting wealthier travelers also requires a more consistent operation, the airline acknowledges. American has been working to improve on-time performance by spreading out flight schedules at its major hubs and using artificial intelligence to predict maintenance issues before they cause delays. Delta and United continue to outperform American in punctuality.

American is also investing in the airport experience. The airline is building what trade publication View From The Wing described as its largest Admirals Club lounge, spanning roughly 37,000 square feet, at Dallas Fort Worth International Airport, its largest hub, along with new grab-and-go provisions and upgraded Flagship check-in areas. American recently opened new lounge facilities in Philadelphia and has announced further expansions planned for Charlotte, North Carolina, and Miami.

The airline is also revamping its AAdvantage loyalty program and rolling out technology that makes it easier for customers to buy premium upgrades. American’s exclusive 10-year co-branded credit card partnership with Citi, finalized in 2024, took effect this year, ending its prior dual arrangement with Barclays. The deal is meant to help American compete with Delta’s American Express partnership and United’s Chase program. Vice Chairman Steve Johnson said the new arrangement “enables us to expand that business much more rapidly than we have in the past.” Delta led all three carriers with $2 billion in credit card revenue in a single quarter of 2025; American and United do not disclose the figure, though all three expect to eventually reach roughly $10 billion a year in credit card revenue.

Wall Street expects the strategy to start showing up in the numbers. Analysts forecast adjusted earnings of about $0.64 per share in 2026, an increase of nearly 80% from 2025, and expect further growth in 2027 as premium investments mature and the airline continues paying down pandemic-era debt.

Even so, American faces real hurdles. Delta and United spent years building premium-focused business models, and American must still convince travelers its service has improved. Changing that perception, industry experts say, requires visible upgrades passengers can consistently feel — not just announcements about future investment. “You can’t just turn premium revenue on,” said Conor Cunningham, an analyst at Melius Research.

American posted a $111 million profit on record full-year revenue of $54.6 billion in 2025, or $237 million on an adjusted basis excluding special items. That compares with about $5 billion in profit at Delta and more than $3.3 billion at United for the same year, according to CNBC. American then reported a $382 million loss in the first quarter of 2026 on revenue of $13.9 billion, up 10.8% from a year earlier, as it grappled with winter storms and rising jet fuel costs.

Winter Storm Fern and other disruptions cut about $320 million from American’s first-quarter revenue, the airline said. A separate storm in late January stranded crew members without accommodations at American’s Charlotte hub and forced more than 9,000 flight cancellations — the largest weather-related disruption in the airline’s history, according to the company, with an estimated $150 million to $200 million hit to revenue. American also cited elevated jet fuel prices, forecast near $4 a gallon for the second quarter of 2026, up from $2.75 in the first quarter, tied to the conflict in the Middle East. The airline has since trimmed its full-year adjusted profit guidance to a range of a 40-cent loss to a $1.10 gain per share, down from initial guidance of $1.70 to $2.70 issued in January.

American has also been working to reduce debt taken on during the pandemic. The airline cut its total debt by $2.1 billion, to $36.5 billion, in 2025 and ended the year with $9.2 billion in available liquidity. As of the third quarter of 2025, American reported $36.8 billion in total debt and $29.9 billion in net debt, with a goal of reducing total debt below $35 billion by the end of 2027. The company’s initial guidance called for more than $2 billion in free cash flow this year.

The strategy comes months after unions representing American’s roughly 40,000 pilots and flight attendants raised concerns about Isom’s leadership, following a weak 2025 profit-sharing payout and the airline’s slow recovery from the January storm. “I know that it is a meager profit-sharing pool this year… I’m disappointed in that,” Isom told employees at the time, according to CNBC. As of Monday, neither Delta nor United had issued a statement responding to Isom’s Sunday remarks, and no labor union had commented on them specifically.

Isom has told CNBC that “our long-range plan is certainly making up the margin gap” and that American aims to be “best at everything that we do.” In April, American denied rumors of a merger with United, saying it would pursue independent growth through commercial partnerships instead.

American operates more than 6,000 daily flights to over 350 destinations in more than 60 countries, according to the company; SimpleFlying, citing the airline, put the figure at roughly 6,500 flights a day. American employs nearly 140,000 people, according to Isom. For Isom and the airline’s workforce, executives say, success ultimately depends on whether customers notice the changes and choose American.