Why American Airlines still trails United and Delta

American Airlines is making progress, but its recovery still has a large gap to close. The airline reported record revenue of $16.7 billion in the second quarter of 2026. Yet its profitability remained well below United and Delta for the same period. American's July results

That is the clearest meaning of “falling behind.” American needs to turn strong demand and an extensive network into stronger earnings and a consistently attractive product. American has had to repair a commercial setback while managing a heavy interest burden and long upgrade timelines. My view is that it now needs to turn those repairs into stronger earnings. The new Flagship cabins show that the airline is working to change it.

The profit gap is hard to ignore

For the quarter ended June 30, 2026, American reported an adjusted pretax margin of 0.9%. United reported 4.8%, and Delta reported 7.7%. These are the airlines' reported adjusted figures for the same quarter; each company applies its own exclusions, so they are a business comparison rather than a precise measure of passenger service. American's financial tables, United's second-quarter results, Delta's June-quarter results

American's fuel expense rose by more than $2.2 billion year over year. It said higher fares offset nearly half of that increase. Fuel hurt its competitors too, but American's thin margin left it less room to absorb the pressure. American's fuel-cost explanation

For travelers, the relevance is long term. A stronger business has more room to sustain investment, respond to competitors and improve service. Record sales are useful only if the airline can retain enough of the revenue.

It had to repair its corporate-sales strategy

American acknowledged in July 2024 that its prior sales and distribution strategy contributed to results below expectations. It restored competitive fares to agency and corporate booking channels, dropped plans to vary mileage earning by booking channel, and rebuilt support for travel agencies and corporate customers. American's 2024 strategy reset

Those reversals matter because business travelers often book through an employer's travel system. Making that process harder can weaken the relationship with the people and companies an airline wants to keep.

The repair has made progress. American said it restored its historical share of indirect-channel revenue by the end of 2025. Managed corporate revenue then rose 26% year over year in the second quarter of 2026. That is recovery, not evidence that corporate bookings keep shrinking. American's year-end update, American's corporate-revenue update

My criticism is of the detour: management had to rebuild relationships it should have been strengthening.

Interest costs consume a substantial share of earnings

American Airlines Group's second-quarter filing lists $409 million of interest expense, net, alongside $446 million of operating income. The filing records interest income separately, so those two numbers alone do not calculate pretax profit. They do show the scale of the financing burden. American's June 2026 quarterly filing

Interest payments compete with other uses of cash. Reducing that burden can give American more room to invest while making its earnings less sensitive to a difficult quarter.

The same period ended with $11.3 billion of available liquidity, according to American. A profitability gap should not be confused with an immediate cash crisis. The issue is how efficiently the airline can fund its recovery. American's liquidity disclosure

Some product repairs will take years

American's August 2026 announcement plans seatback screens on new narrowbody deliveries beginning in 2028, followed by retrofits, with full installation expected by the early next decade. That is a welcome change of direction, but it leaves a long gap between the announcement and a consistent fleet experience. American's screen and cabin plans

Meanwhile, United and Delta keep raising expectations for premium cabins and airport hospitality. Our United–Delta rivalry analysis explains the competition American faces.

American has delivered improvements, too. Its first retrofitted 777-300ER launched in September 2026 with 70 Flagship Suites and 44 Premium Economy seats. That milestone does not establish that every aircraft in the 20-plane fleet has been converted. American's 777 retrofit debut

The lounge story is improving

American expanded Flagship Dining access at Dallas–Fort Worth and Miami from September 15, 2026, to eligible Flagship Business and Business Plus travelers on qualifying routes. Tables remain subject to availability. This is a real upgrade to the ground experience. American's dining announcement

The task is to make improvements like these part of a journey customers can reliably choose. Check the aircraft and fare rules with American, then use our American Airlines directory to explore lounge options.

What would change the picture?

I would look for stronger margins, sustained corporate growth and more completed cabin upgrades. American needs dependable operations and customer support to make those investments count.

The airline has useful assets and visible signs of repair. Closing the gap requires turning them into a consistent experience—and a business that earns enough to keep improving.