American Airlines maps premium push to narrow profit gap

American Airlines is flying more than its biggest U.S. rivals, yet its profits are still trailing them by billions.

CEO Robert Isom told CNBC that closing the airline’s margin gap is part of American’s long-range plan, while declining to give a timetable. CNBC reported that United Airlines made about $3 billion more than American last year, while Delta Air Lines earned nearly $5 billion more.

The Fort Worth-based carrier is operating about 6,500 flights a day this year, according to Cirium data cited by CNBC. That is nearly an Alaska Airlines-sized amount of flying more than its closest competitor, the report said.

Isom described American to CNBC as a premium global airline with the largest footprint in North America. The task now is persuading customers to pay more for that footprint.

Premium seats, bigger lounges and new jets

American executives told CNBC the airline is focusing on its loyalty program, customer experience, network and premium revenue. The carrier is refreshing aircraft cabins, adding more upscale seats and weighing a new wide-body aircraft order from either Boeing or Airbus as soon as this year.

Isom said the cabin refresh will soon include American’s Boeing 787-8 Dreamliners. CNBC reported that remodeled cabins on the airline’s 777-300ERs could arrive in the next few weeks.

The money is in the front of the plane. CNBC reported that a lie-flat business-class seat can bring in close to $10,000 on some long-haul international routes, compared with $2,000 or far less for a seat in the rear cabin.

American is also expanding its airport perks. Chief Customer Officer Heather Garboden told CNBC the airline plans to build a 37,000-square-foot Admirals Club at Dallas Fort Worth International Airport, the largest in its lounge network. The airline is also planning a grab-and-go Provisions lounge in the airport’s future Terminal F and a Flagship check-in area in Terminal D.

Dallas Fort Worth, American’s largest hub, is in the middle of a $12 billion makeover, according to CNBC.

Wall Street sees earnings climbing

Analysts expect American to earn 64 cents a share this year on an adjusted basis, up nearly 80% from 2025, according to estimates cited by CNBC. Wall Street also expects adjusted earnings to rise to $2.58 a share in 2027.

The airline is due to give an updated outlook when it reports second-quarter results on Thursday, CNBC said.

American’s balance sheet remains a drag. CNBC reported the airline still has $35 billion in debt, down from about $54 billion after the pandemic.

Reliability is another target. Cirium data cited by CNBC ranked American sixth among 11 U.S. airlines for punctuality in the first half of the year, with a 76.6% on-time rate. Delta and United ranked second and third. Under Isom and Chief Operating Officer David Seymour, American is spreading out schedules at major hubs and using artificial intelligence to predict maintenance problems, CNBC reported.

Labor warns on service

The Association of Professional Flight Attendants raised concerns about service levels as American adds 70-seat business-class cabins. Union president Julie Hedrick said in a statement to CNBC that the airline is asking fewer flight attendants to provide more personalized international service.

CNBC reported that American cut flight attendant staffing on those aircraft from 13 to 11 in 2020, and that other carriers have made similar changes.

Isom also dismissed the idea of a United-American merger after United CEO Scott Kirby suggested one this year. Isom told CNBC that advisers, interested parties and politicians saw no chance of such a deal happening given history, law and prior mergers.

For now, American’s plan is less about dealmaking and more about proving the airline can sell a pricier experience at scale.

This story draws on original reporting from CNBC.