American Airlines’ turbulence deepens: When rivals soar and you’re stuck on the tarmac

American Airlines enters 2026 the way no CEO wants to — explaining why your company posted $111 million in profit while the two guys next door made $5 billion and $3+ billion. Same industry. Same tailwinds. Wildly different execution. As investors sharpen their knives around CEO Robert Isom’s leadership, American is becoming the airline industry’s most uncomfortable case study in how legacy carriers can fumble a once-in-a-decade recovery.

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🔥Top movers

🍏Current landscape

American Airlines sits trapped in a profitability crisis that would be embarrassing in a downturn — and is borderline inexplicable in a boom. The post-pandemic recovery handed every major U.S. carrier a gift: record travel demand, pricing power, and a consumer willing to pay up for premium cabins. Delta and United unwrapped that gift. American somehow lost the receipt.

The profit chasm is staggering. American’s $111M represents roughly 2% of what Delta earned. Both airlines fly comparable fleets across comparable networks. The difference is execution, full stop.

Record revenue, almost no profit. American posted $54.6B in 2025 revenue — an all-time high — yet converted just 0.2% of it to net income. Delta’s ~10% operating margin on $58.3B in revenue tells you everything about the gap.

The 2023 distribution disaster still haunts. America’s aggressive NDC push alienated travel agencies and corporate travel managers, and those relationships don’t heal overnight. Lost corporate accounts are still flowing to Delta and United.

Wall Street has noticed. America’s market cap is a fraction of Delta’s and United’s. The valuation discount isn’t about macro — it’s a management tax.

🌀Turning the tables

How is American positioning to reverse a competitive slide that’s widened every quarter? Three bets, all running simultaneously.

1. Premium cabin overhaul

American is throwing serious capital at its widebody fleet — new business-class suites, refreshed premium economy, the works. The problem? Delta’s product already wins industry awards, and United’s Polaris has been in the market for years. America isn’t leapfrogging anyone here; it’s trying to stop the bleeding. The carrier also restructured AAdvantage earning rates and is expanding its premium lounge footprint after haemorrhaging corporate accounts.

2. Network tightening

Out with the vanity routes, in with hub discipline. American has consolidated around Charlotte, DFW, and Miami — cutting unprofitable spokes while doubling down on fortress positions. Coordination with Alaska Airlines is meant to plug West Coast gaps, though the much-hyped JetBlue partnership was effectively killed by antitrust regulators.

3. Cost structure surgery

This is where it gets uncomfortable. Americans’ labour costs per seat mile run meaningfully higher than Delta’s, and narrowing that gap requires either painful productivity negotiations or years of attrition. The carrier is also accelerating retirements of ageing regional jets and mainline 757s to simplify maintenance — a move that helps margins but shrinks the network.