American Airlines CEO lays out vision to close $3 billion profit gap

FORT WORTH, Texas — American Airlines CEO Robert Isom has a math problem.

The carrier is flying about 6,500 flights per day this year — nearly an entire Alaska Airlines more worth of travel more than its closest competitor, according to Cirium — yet American’s profit gap has grown. United Airlines brought in about $3 billion more than American last year, and U.S. profit leader Delta Air Lines made nearly $5 billion more.

In an exclusive interview with CNBC late last month, Isom said American and its nearly 140,000 employees want “to be best at everything that we do.” He said that carrier’s “long-range plan is certainly making up the margin gap,” but he didn’t put a timeline on that goal.

American’s top executives at the carrier’s headquarters late last month outlined new initiatives to CNBC: bigger, more luxe airport lounges, a new wide-body aircraft order, and fresh interiors for even more of its long-haul fleet to attract big spenders.

Isom described the carrier’s identity as “a premium global airline with the largest footprint in North America.”

American has more decisions it needs to make — and soon — to close the gap. Perhaps its biggest challenge is getting customers to shell out more to fly, something Delta and United zeroed in on years ago.

American has mastered running an efficient business but “what we will measure over time is: Are we closing this revenue gap and closing the unit revenue gap?” American CFO Devon May said.

United and Delta earlier this month reported bookings are still strong. The surge in fuel prices have both helped and hurt the industry this year: The sudden run-up in prices because of the Iran war took carriers off guard, though they’re passing more of those costs along to travelers, and executives don’t expect fares will drop much anytime soon.

Wall Street is optimistic American will continue to improve, expecting it to quadruple adjusted earnings in 2027 to $2.58 a share.

American is now remodeling cabins across the fleet and taking deliveries of new planes with interiors that feature new amenities and more premium seats. Executives have said they’re considering but haven’t decided on bringing back seatback screens to much of its narrow-body fleet, though American recently joined the ranks of airlines that are adding satellite Wi-Fi from SpaceX‘s Starlink.

Customers who are willing to pay more for premium seats or other perks like lounge access have been a bright spot across the industry, and everyone from profit leader Delta to now-defunct budget carrier Spirit Airlines has tried to woo those travelers as airlines rush to get fancy, new seats — small but profitable real estate — in the air.

Isom told CNBC that work to refresh cabins will soon expand to American’s Boeing 787-8 Dreamliners. Its revamped cabins on its largest planes, the 777-300ERs, could debut in the next few weeks. Each business-class, lie-flat seat can bring in close to $10,000 on some long-haul international routes compared with $2,000 or even much less for a seat in the back.

Keeping up high-touch service levels could be a challenge, the airline’s flight attendant union said, as the 70-seat business class soon comes online. American has been phasing out planes with separate first and business classes.

“Now, as American introduces 70 Business Suites and markets a premium international experience, they’re expecting a reduced number of Flight Attendants to deliver significantly more personalized service,” Julie Hedrick, president of the Association of Professional Flight Attendants, said in a statement. (American reduced flight attendant staffing on those aircraft from 13 to 11 in 2020. Other carriers have made similar moves.) “The result will be longer service times and a customer experience that falls short of what passengers expect.”

In another lure for premium travelers, Chief Customer Officer Heather Garboden told CNBC that American is going to build the biggest Admirals Club lounge in its network, at 37,000 square feet, at its sprawling Dallas Fort Worth International Airport hub in Terminal C.

At the under-construction Terminal F at that airport, American is also planning a grab-and-go Provisions airport lounge, as well as a Flagship check-in area in Terminal D. The entire airport, American’s largest hub, is undergoing a $12 billion makeover, and the carrier recently unveiled new gates in Terminal C, which will expand further. American and others have been upgrading and expanding airport lounges for the spendiest customers around the U.S.

But United has had a roughly decade head start at catering to higher-paying travelers, while Delta has close to two decades of experience. In the late 2000s, Delta was giving away about 90% of its domestic first-class seats through free upgrades for frequent flyers, but now it says it sells the vast majority, with customers paying cash or redeeming miles, now a trend among big carriers, though American wants to increase buy-ups.

Under Isom, American has been upping its game in premium investments. American’s commercial team is working on technical changes that aim to offer customers more opportunities to buy pricier seats.

Aside from its of fortress hubs, American’s chief commercial officer, Nat Pieper, said the airline needs to win in so-called jump-ball markets like Los Angeles, Chicago and Washington, D.C. He said American continues to grow sign-ups for its lucrative credit card program in some of those, including New York.

American said it’s flying is split about 80% domestic versus 20% international. International flights often carry a high premium compared with domestic routes — and the planes serving them generally have more luxurious seats on board.

Isom said the airline’s network breadth is a major strong suit and will continue to be.

While American and other airlines rely on alliances and partnerships to expand reach, United is flying a lot of that itself.

United flies more internationally than Delta and American, and made its geography quiz-like network a calling card and , adding dots on the map from Mongolia to Galicia, Spain.

Isom, 62, took over the top role at American in March 2022, after the airline industry had been rocked by the pandemic.

“I’ve never been deterred, no matter what the challenges that we face,” he said.

He took over in a quarter when American lost $1.6 billion.

“I’m clear-eyed about the challenges in this business,” he said, pointing to an industry that has been through everything from the 9/11 terrorist attacks, to the financial crisis, bankruptcies, mergers and wars and disease.

American ranked sixth of 11 U.S. airlines in punctuality in the first half of the year, according to Cirium data that pointed to with a 76.6% on-time rate, while Delta and United took the No. 2 and No. 3 spots, respectively. Under Isom and COO David Seymour, the carrier is working to improve its on-time rate, spreading out its schedule instead of jamming chaotic connecting banks in major hubs, and using artificial intelligence to predict maintenance problems.

On top of that, the carrier’s earnings are still hamstrung from its $35 billion debt load though American has slashed that from around a $54 billion peak coming out of the pandemic, with balance sheet improvement a major priority.

“They’re a giant — with a limp,” said Dennis Tajer, spokesman for the Allied Pilots Association, which represents American’s 15,000 aviators. Earlier this year, the APA and the flight attendants’ union called Isom’s leadership into question. Underperformance from the broader company means less profit-sharing for staff.

Getting customers to notice improvements could take time.

“Changing a service culture is hard, but not impossible,” said Jay Barney, a professor of strategic management at the University of Utah David Eccles School of Business. To alter overall brand perception, he said, “You have to make the changes obvious and visible, to current customers and potential customers.”

One issue is that flyers are often locked in because the biggest airlines have such overwhelming market share at major hub airports, he added.

What airlines might be trying to do is “charge more to their current customers,” Barney said.

American might be behind in its premium game, but Isom said customer satisfaction scores are rising. Chief Commercial Officer Pieper, an airline industry veteran whom the company appointed last fall as the carrier was recovering from a failed corporate sales strategy in 2024, said demand is strong across the board.

Buying new wide-body planes will be key to the airline’s next phase, Isom said. An order is on the table for this year, with both Boeing and Airbus in the mix, he said.

American’s more than 1,000 planes make up the youngest fleet of the three largest U.S. airlines, according to 2025 annual filings, thanks in part to a more than 400-airplane order it made about 15 years ago for new Boeing and Airbus narrow-body planes, but dozens of its Boeing 777 wide-bodies average more than two decades old.

American’s refresh of those older planes, Boeing 777-200s, are next, Isom said, but the carrier is shopping for new planes.

“I think that Airbus could play a big role” in the new order, Isom said. American’s wide-bodies are all currently Boeing planes.

American declined to say the size of its planned order. New aircraft for American would likely arrive in the early or middle of the next decade.

Up in Chicago, rival United — which has been duking it out with American at O’Hare International Airport — snatched up delivery slots for more than 100 Boeing Dreamliners in the last four years.

United CEO Kirby suggested this year a merger with American, an idea the airline rebuffed.

“I spoke with Scott,” Isom told CNBC. “Given history, given law, given past mergers, there wasn’t anyone that we talked to, our advisors, interested parties, politicians, that said that there was any chance of this happening.

“At the end of the day, we spend time looking at things that have a chance of happening. We don’t spend a lot of time pursuing impossibilities,” he said.

United has a partnership with JetBlue (American had a more involved one with JetBlue in the Northeast but it was blocked by a judge on antitrust grounds in 2023). But Kirby has repeatedly said this year he’s not interested in acquiring that New York airline. He also acknowledged that a merger with American won’t happen without a willing partner in that carrier’s management.

United, meanwhile, gets several slots at New York’s John F. Kennedy International Airport as early as next year under the JetBlue deal.

“Why buy the cow if you’re getting the milk for free?” said Brett Snyder, who writes the Cranky Flier blog.

Isom gave a standard line from executives when CNBC asked his own appetite for possible mergers and acquisitions, saying the carrier is always on the lookout for opportunities to serve the company’s customers.

For now, though, Isom said he is firmly focused on American’s new chapter.

He said he gravitated toward the industry “to be involved with something where you can make a difference.

“This is this one that you never wake up in the morning or going to bed at night thinking: Did I do good for somebody or something?” he said. “You certainly had the chance to in this business.”