American Airlines runs about 6,500 flights per day this year. That is nearly an entire Alaska Airlines worth of flying more than its closest competitor. Yet the profit gap keeps growing.
United Airlines brought in about $3 billion more than American last year. Delta Air Lines, the U.S. profit leader, made nearly $5 billion more. CEO Robert Isom acknowledged the gap in an exclusive interview with CNBC conducted late last month at the carrier's Fort Worth, Texas headquarters.
Isom said American and its nearly 140,000 employees want "to be best at everything that we do." He described the carrier's identity as "a premium global airline with the largest footprint in North America." He said the carrier's "long-range plan is certainly making up the margin gap," but he did not put a timeline on that goal.
Executives outlined several new initiatives during the meeting: bigger and more luxurious airport lounges, a new wide-body aircraft order, and updated interiors for more of its long-haul fleet. The strategy targets higher-spending travelers, a segment that Delta and United zeroed in on years ago.
American CFO Devon May said the company has mastered running an efficient business, but added that what the airline will measure over time is whether it is closing the revenue gap and the unit revenue gap. Closing that gap depends heavily on persuading customers to spend more when they fly.
The airline is forecast to earn 64 cents a share this year on an adjusted basis, which would be up almost 80% from last year, according to analyst estimates. Wall Street is more optimistic about 2027, expecting American to quadruple adjusted earnings to $2.58 a share that year.
American is currently remodeling cabins across its fleet and taking deliveries of new planes featuring more premium seats and updated amenities. Executives said they are considering bringing back seatback screens to much of its narrow-body fleet but have not made a final decision. American recently joined the airlines adding satellite Wi-Fi through SpaceX's Starlink.
Fuel prices have complicated the picture for the entire industry this year. A sudden price spike tied to the Iran war caught carriers off guard, though airlines have been passing more of those costs along to travelers. Executives across the industry do not expect fares to drop much anytime soon. United and Delta both reported strong bookings earlier this month. American will give an updated earnings forecast when it reports second-quarter results on Thursday.