Among the “big three” US carriers — American, Delta, and United — there’s significant variance in terms of profitability. Delta has long been the most profitable, while American has long been the least profitable. United has been transforming itself in recent years, and went from being in American’s league, to getting closer to being in Delta’s league.
There’s often discussion about all the things that Delta does right, and all the things that American does wrong, given their vastly different financial performance. However, what’s actually driving this difference in performance? Is Delta really transporting passengers that much more profitably, or what’s going on? I think the results might surprise some people…
In this post:
The surprising reality of American vs. Delta vs. United
Let’s look at the full year financial results for 2025, for American, Delta, and United:
- American reported net income of $111 million, down 87% from the $846 million net income in 2024
- Delta reported net income of $5.0 billion, up 45% from the $3.5 billion net income in 2024
- United reported net income of $3.4 billion, up 7% compared to $3.1 billion net income in 2024
That’s obviously quite a range. I think the average person would assume that this means that Delta transports passengers a lot more profitably than American and United. While this doesn’t tell the full story, I’m a big fan of looking at PRASM, TRASM, and CASM, since it’s a fun, easy thing to compare. For those not familiar:
- Passenger revenue per available seat mile (PRASM) tells you how much passenger revenue an airline is getting for every seat mile flown, regardless of whether it’s full or not
- Total revenue per available seat mile (TRASM) includes not just the passenger revenue, but also cargo revenue, revenue from ancillaries, etc.
- Cost per available seat mile (CASM) tells you the average cost an airline incurs for each seat mile flown, whether there’s someone in that seat or not
So, how do those numbers compare at American, Delta, and United, for 2025?
Looking at American’s financial results:
- Passenger revenue per available seat mile was 16.58 cents
- Total revenue per available seat mile was 18.25 cents
- Cost per available seat mile was 17.76 cents
Looking at Delta’s financial results:
- Passenger revenue per available seat mile was 17.37 cents
- Total revenue per available seat mile was 21.26 cents
- Cost per available seat mile was 19.31 cents
Looking at United’s financial results:
- Passenger revenue per available seat mile was 16.18 cents
- Total revenue per available seat mile was 17.88 cents
- Cost per available seat mile was 16.46 cents
You’ll probably notice some interesting things here:
- At all three airlines, PRASM is lower than CASM, meaning that airlines aren’t breaking even on their costs exclusively from selling tickets for transporting passengers; United is the closest to breaking even with PRASM vs. CASM
- United has the lowest PRASM, TRASM, and CASM, but that reflects that the airline has a much larger long haul network, where you expect those numbers to be lower; for example, United’s average stage length is 1,488 miles, while American’s is 837 miles
- It’s not surprising to see Delta have the highest CASM, given that the airline has a rather outdated and fuel inefficient fleet, the highest paid employees (on average), and doesn’t operate as many long haul flights as United
- If you take PRASM and compare it to CASM, you’ll find that United has the best performance, followed by American, followed by Delta
- If you take TRASM and compare it to CASM, you’ll find that Delta beats United slightly, and then American is way behind
What’s driving the difference in profitability?
Based on 2025 results, United is the closest to directly breaking even on transporting passengers, while Delta is the furthest from breaking even on transporting passengers. So, how is Delta able to be the most profitable airline, despite that reality? And why is American so far behind Delta and United when it comes to profitability?
This is where it’s interesting to dig into other aspects of airline performance. A few things stand out:
- American has the most modern fleet, but that also translates to lots of interest expenses (debt), while Delta (probably smartly) largely flies older aircraft; in 2025, Delta paid $679 million in interest expenses, United paid $1.4 billion, and American paid $1.7 billion
- While American and Delta are largely “up to date” on their labor contracts, United still has a long way to go there, so the airline has significant cost savings from not having finalized contracts with flight attendants, for example, and that will eat into profitability in the future (that contract is expected to be ratified soon)
- United has a major advantage with cargo, given how global its route network is; in 2025, United generated around $1.8 billion in revenue from cargo, while American generated around $800 million and Delta generated around $900 million
- Delta is also really good at generating revenue from its loyalty program, including with its co-brand credit card agreement, plus Sky Club access agreement with Amex; in 2025, American generated $6.2 billion in revenue from AAdvantage, while Delta generated $8.2 billion from SkyMiles
- Delta is unique among the “big three” US carriers in owning an oil refinery, though the profitability of that varies greatly by year; while that generates billions in revenue, it’s not consistently profitable, and in 2025 the biggest benefit was that it acted as a “hedge,” by reducing fuel costs at the airline by around four cents per gallon
Admittedly let me acknowledge that I’m trying to keep things very simple here, and there’s a bit more nuance to this. For example, on some level, loyalty revenue also factors into revenue per available seat mile, since some people are redeeming points for travel, and the value of that is accounted for. But you also can’t overlook that Delta basically has a $2 billion annual revenue advantage with its loyalty program over American, and that’s the highest margin revenue you’ll find at the airline.
What’s my point in saying all of this?
What’s the moral of the story with all of this? After all, it’s the bottom line that counts, and it’s pretty clear who is winning (and losing) there. Well, I think it’s interesting to note that despite similar revenue, Delta is 45x more profitable than American.
My point is simply to point out the complexity of the industry. I’m as guilty of this as anyone, but the reason American is less profitable than Delta and United probably isn’t primarily because it’s less “premium,” and doesn’t have seat back TVs. Instead, there are so many other factors at play.
Ultimately Delta is profitable due to a combination of factors, and I’d say two are most significant — the airline has less debt than American, and it generates a killing on its SkyMiles program and its Amex lounge access agreements. Yeah, Delta gets a little more revenue per available seat mile, but it also has higher operating costs.
United also has some unique circumstances. Comparing United’s profitability right now really isn’t apples-to-apples, given its labor cost advantages. For the time being, the airline is closest to actually making money transporting passengers, though.
I also think United probably has the most upside with its loyalty program, as the airline increasingly gets a loyal following due to its global route network that’s popular with premium leisure travelers, and increasingly offers elite status for credit card spending, where it lagged American and Delta.
Bottom line
We all know that among the “big three” US carriers, Delta is most profitable, followed by United, followed by American. However, it’s not necessarily exclusively for the reasons that people assume. None of the airlines are particularly good at making money from transporting passengers, but instead, they make money with everything else.
What’s interesting is the relative advantages that each of the airlines have (well, American doesn’t have many advantages, but Delta and United do). Delta has less debt than competitors (so that’s cheaper to service) and knocks it out of the park with its loyalty program revenue, while United makes the most from cargo and still has a labor cost advantage.
What’s your take on the profitability divide between the “big three” US carriers?
Wow, DL's fall from grace continues at record pace. Sad.
Once again Walter Mitty-Dunn has proven himself to be the number one on this website. That is the number one generator for Ben’s click machine.
Walter, we have to thank you for your clicks for points service. Without your assistance Ben would not be able to fly as often as he does. Without his flights we would not enjoy as many flight reviews.
Perhaps one day you will generate sufficient pennies to be able...
Once again Walter Mitty-Dunn has proven himself to be the number one on this website. That is the number one generator for Ben’s click machine.
Walter, we have to thank you for your clicks for points service. Without your assistance Ben would not be able to fly as often as he does. Without his flights we would not enjoy as many flight reviews.
Perhaps one day you will generate sufficient pennies to be able to afford a Delta Airlines cattle class flight. Your review will be egregiously biased no doubt.
RASM, PRASM, TRASM, etc. are non-GAAP measures. Using non-GAAP measures to compare companies is not the best practice. GAAP measures are meant to be compared. Non-GAAP measures aren't. What might be interesting to compare is cash flow. Are the airlines generating positive cash flow or burning through cash? How much free cash flow are the major airlines generating? Just a thought.
if you want GAAP, then use GAAP income statements and GAAP balance sheets.
some people here love to tout the income statement changes while ignoring the changes to the balance sheet to get those nice looking income statements.
and the kicker is that the people that argue about DL's losses because of its NON-CASH charge for its equity investments in the first quarter will be exactly the ones that will pretend those gains don't...
if you want GAAP, then use GAAP income statements and GAAP balance sheets.
some people here love to tout the income statement changes while ignoring the changes to the balance sheet to get those nice looking income statements.
and the kicker is that the people that argue about DL's losses because of its NON-CASH charge for its equity investments in the first quarter will be exactly the ones that will pretend those gains don't matter when they WILL swing to positive this summer.
Focusing on operational profits helps to insulate from accounting swings that typically happen below the operating income line.
Free cash flow ($b since 1/1/22)
UAL: 10.4
DAL: 9.4
AAL: 4.9
LUV: -3.2
OCF/Capex/FCF ($b since 1/1/22)
UAL: 35.7/25.3/10.4
DAL: 31.6/22.2/9.4
AAL: 17.3/12.4/4.9
LUV: 9.5/12.7/-3.2
you still can't grasp that no one doubts UA was right in going into growth mode post covid.
what you CANNOT or WILL NOT grasp is that UA is not near as well positioned to advance as much going forward - due to higher fuel prices, labor contracts that have to be and will be settled, much larger deliveries even as cash flow is decreasing and all the other reasons listed below.
once again, UA...
you still can't grasp that no one doubts UA was right in going into growth mode post covid.
what you CANNOT or WILL NOT grasp is that UA is not near as well positioned to advance as much going forward - due to higher fuel prices, labor contracts that have to be and will be settled, much larger deliveries even as cash flow is decreasing and all the other reasons listed below.
once again, UA did not even match DL's operating margin in the 1st quarter.
Most improved over 5 years is not the same as leading the industry
and specific to ghost's question, DL and UA do not even calculate cash flow the same.
And you don't seem to understand that UA has done all this while growing and investing far more in the product than DL. UA is just beginning to reap the rewards of those investments. It's just a matter of time LTD.
and you don't understand that UA's financials over the last year have DETERIORATED even as it now faces higher fuel prices, more intense competition, accelerated deliveries from Boeing even as capacity has to be capped because of fuel and FAA restrictions on key UA hubs, and employees that are tired of making loans to their employer that never get repaid
You love to pick out datapoints to justify your narrative while ignoring the ones that...
and you don't understand that UA's financials over the last year have DETERIORATED even as it now faces higher fuel prices, more intense competition, accelerated deliveries from Boeing even as capacity has to be capped because of fuel and FAA restrictions on key UA hubs, and employees that are tired of making loans to their employer that never get repaid
You love to pick out datapoints to justify your narrative while ignoring the ones that anyone dares note challenges your narrative.
and I will absolutely laugh out of my backside when DL posts a gain on its equity investments later this year after all the crap you threw up about their NON-CASH equity losses in the 1st quarter.
You do recall that DL made more money than any other airline in the quarter of the CrowdStroke in part because of equity gains?
You have no clue how business actually works and love to throw sh8y out hoping you gain a notch in your belt of arrogance when you repeatedly fail precisely because you have no clue of the real issues involved.
"DETERIORATED"
DL's operational performance? No doubt. Yikes!
Unbelievable that people keep using Delta credit cards when redemptions are essentially pegged at 1 ccp.
The real kicker has been losing the MQD waiver (and MQMs) on those cards. That was a highway to Platinum (and the RUCs) after $25K spend/year (and a few high-MQM trips).
It will be interesting to see how the credit card program changes work out with United. It was certainly well timed with new labor contracts going into effect but I would imagine there's a decent amount of upside to their credit card program.
It is working as intended - I used to have a Club membership and this year switched to the United Club card because it made no financial sense to pay for the standalone membership any more.
increasingly clear that among US carriers, UA's model is strategically optimized for growth going forward - the airline of the future
feel free to back that statement up with actual data.
In fact, UA's profit as a percentage of DL's fell from 2024 to 2025 even w/ the labor cost advantage that UA had.
and don't bring in 1st quarter 2026 net earnings where DL took a non-cash charge and UA benefitted from sale/leaseback transactions that boosted the income statement at the expense of the balance sheet.
but feel free to show data to argue your point if you believe otherwise.
LTD says, "feel free to show data to argue your point"
And UA has been growing and renovating aircraft far faster while paying down more debt and throwing off more cash than DL or AA.
Fleet size 2016/2025:
UA: 737/1,066. +329/45%
AA: 930/1,013 +83/9%
DL: 832/989 +157/19%
Net Debt (Claude)/Net aircraft 1/1/22 to 3/31/26
AAL: -14.7b/+200
DAL: -7.4b/+171
LUV: +3.0b/+54
UAL: -20.0b/+274
OCF/Capex/FCF ($b since 1/1/22)
...
LTD says, "feel free to show data to argue your point"
And UA has been growing and renovating aircraft far faster while paying down more debt and throwing off more cash than DL or AA.
Fleet size 2016/2025:
UA: 737/1,066. +329/45%
AA: 930/1,013 +83/9%
DL: 832/989 +157/19%
Net Debt (Claude)/Net aircraft 1/1/22 to 3/31/26
AAL: -14.7b/+200
DAL: -7.4b/+171
LUV: +3.0b/+54
UAL: -20.0b/+274
OCF/Capex/FCF ($b since 1/1/22)
UAL: 35.7/25.3/10.4
DAL: 31.6/22.2/9.4
AAL: 17.3/12.4/4.9
LUV: 9.5/12.7/-3.2
except those trends have reversed over the past year which argues against who is best positioned to succeed going forward.
add in that AA and WN are both figuring out how to generate good revenue and the game is hardly about a single carrier's progress - which can be argued to have taken place.
There is no doubt that UA has made enormous progress over the past year but it is far from in...
except those trends have reversed over the past year which argues against who is best positioned to succeed going forward.
add in that AA and WN are both figuring out how to generate good revenue and the game is hardly about a single carrier's progress - which can be argued to have taken place.
There is no doubt that UA has made enormous progress over the past year but it is far from in a position to be the leader.
and given that UA is taking on debt as Boeing delivers more aircraft than UA has received for a long time even as high fuel costs will necessitate taking out capacity, the chances are high that UA's finances relative to the rest of the industry will look worse a year and two years from now than they are now.
LTD, "except those trends have reversed over the past year which argues against who is best positioned to succeed going forward."
All evidence to the contrary. Unfortunately, as SK predicted Spirit is gone and ULCC & JBLU are in trouble and cutting capacity while LUV has leveled off. AAL is reportedly going to grow as fuel is skyrocketing. Good luck with that. UA has never been better positioned and has lots of cash and...
LTD, "except those trends have reversed over the past year which argues against who is best positioned to succeed going forward."
All evidence to the contrary. Unfortunately, as SK predicted Spirit is gone and ULCC & JBLU are in trouble and cutting capacity while LUV has leveled off. AAL is reportedly going to grow as fuel is skyrocketing. Good luck with that. UA has never been better positioned and has lots of cash and plenty of options as they continue to invest in and improve the product with United Next, Elevated and Starlink wifi.
as usual, you ignore and manipulate the data that doesn't paint your narrative.
UA's profits relative to DL DECREASED in 2025 vs 2024.
UA's OPERATING PROFIT MARGIN in 2026Q1 was less than DL's.
AA is generating higher revenue. If they can finally turn their revenue around, it is to their benefit. Same for WN.
UA has lots of cash and is adding debt to cover its massive new deliveries.
DL gains the...
as usual, you ignore and manipulate the data that doesn't paint your narrative.
UA's profits relative to DL DECREASED in 2025 vs 2024.
UA's OPERATING PROFIT MARGIN in 2026Q1 was less than DL's.
AA is generating higher revenue. If they can finally turn their revenue around, it is to their benefit. Same for WN.
UA has lots of cash and is adding debt to cover its massive new deliveries.
DL gains the biggest benefit of the big 3 from NK's departure while B6 does among LCCs.
You and Scott Kirby love to think that UA will benefit from changing industry dynamics but UA has far more overlap w/ AA and WN than DL does.
just wait until 2026 is done - even though your an impulsive child - and see how UA compares with higher labor and fuel costs compared to the industry - and adds more debt via leases.
LTD, "as usual, you ignore and manipulate the data that doesn't paint your narrative."
The is hilarious coming from you. Sorry you don't like Net Income, OCF, Capex, FCF data since Covid or the relative growth in fleets and amenities. I understand why you would like to fixate on a few obscure items while ignoring the obvious big picture.
LTD, "UA has lots of cash and is adding debt to cover its massive new deliveries."
...LTD, "as usual, you ignore and manipulate the data that doesn't paint your narrative."
The is hilarious coming from you. Sorry you don't like Net Income, OCF, Capex, FCF data since Covid or the relative growth in fleets and amenities. I understand why you would like to fixate on a few obscure items while ignoring the obvious big picture.
LTD, "UA has lots of cash and is adding debt to cover its massive new deliveries."
In Q1 UA prepaid $3.1b of secured debt unencumbering those assets while securing $2b in unsecured debt at exceedingly favorable terms. In Q1 UA added 36 new aircraft, retired two aircraft all of which added a grand total of $24m or .0016 of revenue in net debt. DL shrank by a couple of net planes. Great Q1 for UA.
Yes, you manipulate whatever data point you select and think everybody else does the same thing because you, not me can’t accept reality
United engaged in a high risk, high reward growth strategy that required everything to work in United favor coming out of Covid. Now, competitors are stronger, fuel is much higher, so growth cannot occur at the rates at once did, and labor no longer wants to loan money to United at employee...
Yes, you manipulate whatever data point you select and think everybody else does the same thing because you, not me can’t accept reality
United engaged in a high risk, high reward growth strategy that required everything to work in United favor coming out of Covid. Now, competitors are stronger, fuel is much higher, so growth cannot occur at the rates at once did, and labor no longer wants to loan money to United at employee expense.
The best days in the United growth story are behind it. You don’t have to believe me. All you have to do is watch financials for United relative to the rest of the industry over the next few years.
Your wishful projecting is just sad. Everything is going to be OK LTD. You might have to jump back on the UA bandwagon, but you've proven you can do it. Poor LTD.
wishful projecting is being unable to realize that UA's finances have deteriorated relative to DL over the past year.
we get it.
You live in eternal hopium regarding UA.
I deal w/ reality and I give UA credit for what it achieves - but I don't insulate them or anyone else from facing the consequences of excess in the midst of a very fragile industry.
btw,
It's really quite laughable that...
wishful projecting is being unable to realize that UA's finances have deteriorated relative to DL over the past year.
we get it.
You live in eternal hopium regarding UA.
I deal w/ reality and I give UA credit for what it achieves - but I don't insulate them or anyone else from facing the consequences of excess in the midst of a very fragile industry.
btw,
It's really quite laughable that you tout UA's growth but are convinced that AA will stumble on its growth just because UA decided it can't successfully grow any more.
Pure hypocrisy and why I have a field day w/ you
More pathetic projection on your part.
Higher fuel costs only strengthen the economic advantage of newer, fuel-efficient aircraft. UA's new attractively priced aircraft enhance both margins and return on invested capital, while their disciplined management of older aircraft maximizes their remaining value in a highly capital-efficient manner. With the flexibility to adjust utilization, maintain spare capacity, and efficiently manage peak demand, UA’s fleet strategy positions the company exceptionally well.
More pathetic projection on your part.
Higher fuel costs only strengthen the economic advantage of newer, fuel-efficient aircraft. UA's new attractively priced aircraft enhance both margins and return on invested capital, while their disciplined management of older aircraft maximizes their remaining value in a highly capital-efficient manner. With the flexibility to adjust utilization, maintain spare capacity, and efficiently manage peak demand, UA’s fleet strategy positions the company exceptionally well.
rebel, thank you for proving credible figures to illustrate your post. It is such a shame that others do not find it necessary to follow your example.
You should similarly cover international carriers. US has its idiosyncratic credit card programs
Believe me, they're all getting onboard with the credit card grift.
Net Income ($b)/Net Aircraft (since 1/1/22)
DAL: 14.1/+171
UAL: 11.5/+274
AAL: 1.4/+200
OCF/Capex/FCF ($b since 1/1/22)
UAL: 35.7/25.3/10.4
DAL: 31.6/22.2/9.4
AAL: 17.3/12.4/4.9
LUV: 9.5/12.7/-3.2
you forgot to know that UA has been operating with a ~$1 billion labor cost advantage by underpaying large portions of its workforce.
When people look for an apples to apples comparison, they want to see how the big 4 compare including on labor costs.
let's hope the UA FAs approve their tentative contract and then UA focuses on mechanics and other groups - and then we can see apples to apples comparisons
you forget to NOTE...
If UA paid the entire flight attendant TA retro pay which is the entirety of the historical cost advantage in Q1 '26 UA still would have made more profit than DL last quarter. The other employee groups' contracts have only recently become amendable and are in line with the industry.
except that 1. retro isn't the only part of the costs that UA will have to pay in order to catch up its labor costs - the actual day to day labor expenses are what matters
2. UA, as has been noted, engaged in sale and leaseback transactions for fleet deliveries which increased its earnings statement but at the expense of higher debt because leases are on the balance sheet.
3. In contrast,...
except that 1. retro isn't the only part of the costs that UA will have to pay in order to catch up its labor costs - the actual day to day labor expenses are what matters
2. UA, as has been noted, engaged in sale and leaseback transactions for fleet deliveries which increased its earnings statement but at the expense of higher debt because leases are on the balance sheet.
3. In contrast, DL took non-cash charges for rewriting its equity positions in other airlines. Airline stocks all took a hit because of the Iran conflict but you do realize that Air France Stock (AFLLY on US markets) is up 18% in just the past month, so these writedowns that DL took in the 1st quarter will swing the opposite direction?
Eskimo,
all anyone is asking for is apples to apples.
It is absolutely fair to note that UA's labor costs - the run rate, not retro - will go up while higher fuel costs are cutting cash flow which means that UA will have to take on debt. UA is managing the higher levels of aircraft deliveries by increasing debt through leases.
Apples to apples is noting the change in balance sheets just as much as in income statements.
And UA has been growing far faster, renovating aircraft much faster while paying down more debt and throwing off more cash than DL & AA.
United Airlines is hitting on all cylindfes.
Fleet size 2016/2025:
UA: 737/1,066. +329/45%
AA: 930/1,013 +83/9%
DL: 832/989 +157/19%
Net Debt (Claude)/Net aircraft 1/1/22 to 3/31/26
AAL: -14.7b/+200
DAL: -7.4b/+171
LUV: +3.0b/+54
UAL: -20.0b/+274
OCF/Capex/FCF ($b since 1/1/22)
UAL: 35.7/25.3/10.4
And UA has been growing far faster, renovating aircraft much faster while paying down more debt and throwing off more cash than DL & AA.
United Airlines is hitting on all cylindfes.
Fleet size 2016/2025:
UA: 737/1,066. +329/45%
AA: 930/1,013 +83/9%
DL: 832/989 +157/19%
Net Debt (Claude)/Net aircraft 1/1/22 to 3/31/26
AAL: -14.7b/+200
DAL: -7.4b/+171
LUV: +3.0b/+54
UAL: -20.0b/+274
OCF/Capex/FCF ($b since 1/1/22)
UAL: 35.7/25.3/10.4
DAL: 31.6/22.2/9.4
AAL: 17.3/12.4/4.9
LUV: 9.5/12.7/-3.2
Rebel
"The other employee groups' contracts have only recently become amendable and are in line with the industry."
1. Not true. Mechanics have been amendable for nearly a year and a half by now. Same for the dispatchers.
2. Fleet service and customer service have been amendable for a full year which is really saying something since UA has been raking in profits since then so it's not an issue of the...
Rebel
"The other employee groups' contracts have only recently become amendable and are in line with the industry."
1. Not true. Mechanics have been amendable for nearly a year and a half by now. Same for the dispatchers.
2. Fleet service and customer service have been amendable for a full year which is really saying something since UA has been raking in profits since then so it's not an issue of the ability to afford to pay market rates or work rules.
"If UA paid the entire flight attendant TA retro pay which is the entirety of the historical cost advantage in Q1 '26 "
Also not true. Retro pay doesn't = cost of being under a new contract the last 5 years. It simply equals a change in rate of pay alone and usually done at a certain credit hour vs actual hours worked (to say nothing of the likely thousands of employees that have left UA since the amendable date and won't see a dime of the retro pay and it's a savings to United). If union contracts were only about pay rates, sure, you'd almost be right but they aren't. And you're desperately trying to pull a Tim Dunn by ignoring years of financial data results to then say "labor cost could've been made up in 1Q26 entirely" and playing QUITE loosely with your statement to begin with casually ignoring GAAP vs Non-GAAP to pretend a statement is accurate when, by most normal means, non-GAAP, your statement isn't true nor does it apply apples to apples to Cash flow like you mention above.
Tim, It's fair to bring up United's labor pay deficit but only in context that Delta benefits every quarter from enormous labor cost advantages in the form of work rules and the ability to fire, at will, from being largely non-union. So let's not pretend it's only apples to apples if we discount United's game play under the RLA while ignoring Delta's advantage -- DL proved with profit sharing and during covid they don't pay well simply to be a good employer, but rather to avoid unionization -- Delta has consistently done VERY anti-employee things (and many good ones too) but it's to prevent unionization. No public company is an angel fund to simply pay more for no reason
MaxPower,
RTFP. That's why I said the "entirety of the historical cost advantage" as opposed to going forward.
WRT Railway Labor Act (RLA) amendable dates it is not unusual for contracts to go a year past. That's the whole point of the RLA, and the pay rates are not out of industry ranges. United's employee groups will get the industry-leading contracts they deserve.
rebel,
thank you for confirming that UA explicitly uses the RLA to underpay its people by trapping them in a cycle of being underpaid and locked into a contract that takes years longer to settle than UA's peers.
and the basis of cost comparison is NOT whether a labor contract is amendable but whether it pays industry average or better compensation.
DL non-pilot employees repeatedly reject unionization because the RLA rewards employers to...
rebel,
thank you for confirming that UA explicitly uses the RLA to underpay its people by trapping them in a cycle of being underpaid and locked into a contract that takes years longer to settle than UA's peers.
and the basis of cost comparison is NOT whether a labor contract is amendable but whether it pays industry average or better compensation.
DL non-pilot employees repeatedly reject unionization because the RLA rewards employers to play the game of underpaying employees and locking them into an endless and contentious process of increasing pay.
DL is able to pay higher pay not because the company fires more people - which Max repeats as a true union soldier - but because DL employees are more efficient in generating direct airline capacity and revenue per employee. if Max' charges were correct, he could post data to support it but he can't.
DL flies for of its capacity on mainline aircraft which gives more jobs to DL employees who can work more efficiently; regional jets are not cheap on a unit cost basis anymore.
DL employees benefit from the non-transportation revenue which DL generates including via the Amex relationship - so the Amex relationship essentially subsidizes DL employee salaries. Same for the MRO and refinery.
DL generally does not allow its non-union people to drop work and keep benefits as many unionized groups allow - which adds significant expense to the company. That was one of the key issues in the UA AFA pending contract.
and DL does have less strict work rules such as allowing DL Tech Ops to hire retired mechanics to do engine overhauls. DL doesn't have to pay them benefits or keep them longer than for the amount of time it takes to do the job or the employee wants to work; unionized airlines cannot possibly do what DL is able to do - and THAT is part of why DL has a labor EFFICIENCY advantage while DL employees benefit from all of the ways that DL generates revenue even if frontline employees have little to do with the specifics of how that revenue is generated.
The whole reason for the RLA is to keep commerce moving thus amendable dates versus immediate strikes which is certainly not optimal for employees, but the maximal alternative of no unions is far worse. Airline employees would make a fraction of what they do with far worse working conditions without unions. Delta is unique with its ATL hub/headquarters and the southern aversion towards unions (see car plants). The Delta employees should thank their pilots and...
The whole reason for the RLA is to keep commerce moving thus amendable dates versus immediate strikes which is certainly not optimal for employees, but the maximal alternative of no unions is far worse. Airline employees would make a fraction of what they do with far worse working conditions without unions. Delta is unique with its ATL hub/headquarters and the southern aversion towards unions (see car plants). The Delta employees should thank their pilots and ALPA for their profit sharing and their non-union employees should thank their counterparts at other airlines for carrying their water. I prefer people who carry their own water.
Rebel
"RTFP. That's why I said the "entirety of the historical cost advantage" as opposed to going forward."
Back at ya. Read what I wrote.
No, retro pay doesn't cover the "entire" historical cost advantage. It covers part of it but ignores the thousands that left during the amendable period that UA won't be paying, it ignores other parts of the contract, and it usually isn't representative of the entire pay lost anyway.
...Rebel
"RTFP. That's why I said the "entirety of the historical cost advantage" as opposed to going forward."
Back at ya. Read what I wrote.
No, retro pay doesn't cover the "entire" historical cost advantage. It covers part of it but ignores the thousands that left during the amendable period that UA won't be paying, it ignores other parts of the contract, and it usually isn't representative of the entire pay lost anyway.
"WRT Railway Labor Act (RLA) amendable dates it is not unusual for contracts to go a year past."
it's not uncommon for United -- it isn't all that common for other carriers once merger contracts are done. Let's not try to pretend your own isolated view of the world is representative. For a carrier like United that can amply pay new rates? Yeah. it's uncommon for a 5 year amendable date period like with AFA when every other carrier has ratified new agreements.
AA wrapped up all of their labor contracts post -covid quite quickly.
well said, Max.
the same is true for WN.
UA drags out labor settlement because it is essentially taking money from its employees that they will not recover.
Even with retro, employees working under contracts that take years to settle lose money because inflation continues to exist. They do not get the value of that money they never earned back.
and the point still remains that contracts do not represent market rates if other...
well said, Max.
the same is true for WN.
UA drags out labor settlement because it is essentially taking money from its employees that they will not recover.
Even with retro, employees working under contracts that take years to settle lose money because inflation continues to exist. They do not get the value of that money they never earned back.
and the point still remains that contracts do not represent market rates if other carriers esp. DL pay above rates for unionized employees.
UA employees have been willing to accept below average pay because of the rah-rah talk that rebel loves to push about how great UA is - when what is good for UA is not necessarily good for individual employees. In fact, many UA employees suffer personally in order to make UA as a company better.
MP, "No, retro pay doesn't cover the "entire" historical cost advantage."
Point taken. What I meant is that payment brings us up to the date on historical costs despite all LTD's rantings.
WRT to the RLA the average contract goes years past the amendable days (See the APA and APFA strikes and the fine against the APA).
UA benefits financially from dragging out labor contract settlements in ways that no other airline does.
and the amendable dates of labor contracts does not mean market wages. It just means that labor is locked into low pay and can't do anything about it.
Of course you can't stand to admit that DL manages to pay its people better and still post better profits.
When UA has a financial advantage, you need to compare apples to apples.
When DL had a financial advantage, it's more profitable.
LOL. Tim Dunn logic.
Tim-
Since when did you become a communist?? I thought the point of a company was profit for its shareholders. If United manages to stiff its employees of a billion dollars last year and still keep them working, then clearly they have better managers than a place like Delta that prefers to run a charity, no?
I mean that's the logic you use when people complain of sh*tty stuff Delta does to its customers...
Tim-
Since when did you become a communist?? I thought the point of a company was profit for its shareholders. If United manages to stiff its employees of a billion dollars last year and still keep them working, then clearly they have better managers than a place like Delta that prefers to run a charity, no?
I mean that's the logic you use when people complain of sh*tty stuff Delta does to its customers and you retort that they're in the business of making money, not pleasing customers, and since they have the highest profit ergo all their decisions are correct.
Feel free to show us why we shouldn't apply the same logic to United managing to underpay their employees. Most soulless MBA managers, the type whose boots you're happy to lick so long as they wear Delta blue, would call that a win!
If it wasn't for the golden credit card goose the industry would be radically different. Far less capacity, far fewer seats and the bottom half of the economic scale never being able to afford to step onto a plane. In other words, the industry would look more like 1975.
it is hard to live in hypotheticals but the reality is that the big 3 have used loyalty credit revenue to create a distinctive from the rest of the industry.
The industry could have moved in a very different direction were it not for credit cards but we can't say that the industry wouldn't have moved in the same direction but via different mechanims.
I don’t this so - if that were the case we would have just broken up the pilot and FA unions and pay would be marginally higher than Canadian and European crews instead of multiples higher. They would just mirror the salary premium Americans get normally
We’d be better off honestly
Loyalty programs make people make economically irrational decisions. That's why they're used. If the sum total of value that customers manage to extract from the loyalty program + what they spent on tickets, is greater than what they would have extracted by just shopping for the best value tickets, then airlines wouldn't be offering loyalty programs. Why bother if it doesn't increase their profits?
What that means is the opposite of what you're asserting. Most...
Loyalty programs make people make economically irrational decisions. That's why they're used. If the sum total of value that customers manage to extract from the loyalty program + what they spent on tickets, is greater than what they would have extracted by just shopping for the best value tickets, then airlines wouldn't be offering loyalty programs. Why bother if it doesn't increase their profits?
What that means is the opposite of what you're asserting. Most people -- including most people involved in loyalty programs -- would be better off not doing it. The people that follow this blog, and are willing to jump through hoops to get outsized redemption values, are the small exception. Even most people I know who slavishly stay loyal and use travel credit cards, usually at best manage to get 1c/mile redemptions and the vast, vast majority use it on domestic economy class tickets. Those people would be better served using a simple cash back card, and price shopping. Forget the miles.
And if everyone stopped participating in loyalty programs, our market would probably resemble Europe, which is dominated by low cost airlines. Far from being a market where the bottom half would never be able to afford to step on a plane, in Europe, lower and middle income people commonly make weekend vacation trips on RyanAir all around the continent.
Lucky even did a piece a few days ago about how he thinks Spirit failed while European LCCs thrive specifically because of credit card loyalty programs in the US.
If anything, loyalty programs manage to keep ticket prices artificially higher in the aggregate (by which I mean including how they reduce the market penetration of ULCCs and others who don't have strong loyalty programs) by introducing a segment of buyers willing to pay more for a ticket in exchange for perceived loyalty perks that by definition are worth less (in the aggregate) than the additional premium they're paying.
I would be more interested in the trend to see if there is much change in the relative standings of the carriers as temporary situations change. Look at it longitudinally to try to factor out wage contracts that are not in sync, long term replacement fleet costs (compare similarly aged fleets), pre and post loyalty program revenues. Advantages and disadvantages unless structural tend to suggest performance among carriers might regress to the mean (De Bondt...
I would be more interested in the trend to see if there is much change in the relative standings of the carriers as temporary situations change. Look at it longitudinally to try to factor out wage contracts that are not in sync, long term replacement fleet costs (compare similarly aged fleets), pre and post loyalty program revenues. Advantages and disadvantages unless structural tend to suggest performance among carriers might regress to the mean (De Bondt and Thaler looked at something similar in stock market performance over 3-5 years)
you are very right.
We should all care about an apples to apples comparison - but that is very difficult to do; some airlines choose to get by w/ lower labor costs while other companies choose to invest in labor. Some airlines have strength in some markets while others in others and less so.
the big 3 have the greatest abililty to be compared apples to apples which is why labor cost and various types...
you are very right.
We should all care about an apples to apples comparison - but that is very difficult to do; some airlines choose to get by w/ lower labor costs while other companies choose to invest in labor. Some airlines have strength in some markets while others in others and less so.
the big 3 have the greatest abililty to be compared apples to apples which is why labor cost and various types of revenue comparisons should be the same; other than the refinery for DL, everyone pays similar amounts for various other costs - but it is the difference at the margins - DL's MRO revenue which offsets mainenance costs for its own fleet and AA's wholly owned regionals that drive cost differences.
some of these differences are really structural which means that there is very little chance of those differences being eliminated.
This dude is insufferable!!!
Bro, there is more to life than Delta!
Bro, there is more to life than Delta!
Likely why AA went exclusive with Citi.
In addition, don't be surprised if Alaska & American announce (in the not-too-distant future)
a JV with American using SEA as a transpacific hub and Alaska connecting passengers through AA's hubs, with the companies sharing airport facilities at common airports and other synergies, which will be accretive to earnings.
you are likely right but there will be limits on where they can overlap including in each other's hubs - just because they already have an advantage there.
AA and AS might be able to cooperate on int'l flights but it becomes very difficult to create the carveouts to make sure there isn't collusion in domestic markets.
That was an extremely long winded way of saying Delta has done the best at executing a co-branded credit card program.
Also how can you write an article about the profitability of airlines and not dedicate a section to the unions.
You're not playing Tim Dunn Bingo are you?
Per American's April 23, 2026 earnings report, from March 31, 2021 through March 31, 2026, the carrier reduced its debt from $54 billion to $34.7 billion or an average of almost $4 billion per year to pay for its fleet modernization and product upgrade programs. That's a stunning number. It's about $1 billion per quarter. With American's CAPEX winding down, when its new CITI credit card program is fully implemented the parties expect to grow...
Per American's April 23, 2026 earnings report, from March 31, 2021 through March 31, 2026, the carrier reduced its debt from $54 billion to $34.7 billion or an average of almost $4 billion per year to pay for its fleet modernization and product upgrade programs. That's a stunning number. It's about $1 billion per quarter. With American's CAPEX winding down, when its new CITI credit card program is fully implemented the parties expect to grow AA's annual by $1.5 billion per year, and United's new labor deals for about 73% of its workforce adding about $1 billion in annual labor cost, the profitability numbers for American and United should be very similar going forward. Meanwhile, United's fleet replacement program of 680 new jets will saddle the company with about $60 billion in additional debt. How will that change the comparisons?
Net Debt (Claude)/Net aircraft 1/1/22 to 3/31/26
AAL: -14.7b/+200
DAL: -7.4b/+171
LUV: +3.0b/+54
UAL: -20.0b/+274
I’ve been a reader/lurker for some time now, and one thing I don’t understand with this community is why there’s so much bragging and care about “profitability.” Profits profits profits to me in this era means milk the customers for all they’re worth. As a consumer, when I hear “most profitable” corporate entities, I usually think they’re soaking their customers. For service industries, I would think we flyers would favor the choice that’s making the...
I’ve been a reader/lurker for some time now, and one thing I don’t understand with this community is why there’s so much bragging and care about “profitability.” Profits profits profits to me in this era means milk the customers for all they’re worth. As a consumer, when I hear “most profitable” corporate entities, I usually think they’re soaking their customers. For service industries, I would think we flyers would favor the choice that’s making the least profit off me, as long as they aren’t in danger of going under.
I believe that more money in the consumer’s pocket rather than the corporation is the best scenario. Maybe that’s different if I were an investor, but I’m just a guy looking to get the best deal on a ticket to Point B mixed in with a decent customer experience. I don’t care one bit about the airline’s bottom line, just mine.
because these are all for-profit companies.
and, as much as passengers want to act like they don't care about profitability, companies can only invest in their product and deliver service in line w/ their profitability.
It isn't a surprise that DL invested in product as its profitability grew post NW merger, UA copied that model and is starting to see the profit advantage while AA did not invest in product because of its low profitability...
because these are all for-profit companies.
and, as much as passengers want to act like they don't care about profitability, companies can only invest in their product and deliver service in line w/ their profitability.
It isn't a surprise that DL invested in product as its profitability grew post NW merger, UA copied that model and is starting to see the profit advantage while AA did not invest in product because of its low profitability for over a decade but is doing so now as it begins to see improved revenue results.
You simply cannot argue that revenue and profits don't matter but expect to have high quality products and services. That is a principle that doesn't apply just to airilnes but any for-profit business.
Well, in your lurking you must be paying attention to the idiots. A profitable business is profitable because it provides more value than it costs to produce that value. Consumers are always paying less than a product is worth to them* meaning they are better off making the purchase than not. The folks who cut my grass could charge me 10 times as much and I'd still use them (if no competitor charged less). I...
Well, in your lurking you must be paying attention to the idiots. A profitable business is profitable because it provides more value than it costs to produce that value. Consumers are always paying less than a product is worth to them* meaning they are better off making the purchase than not. The folks who cut my grass could charge me 10 times as much and I'd still use them (if no competitor charged less). I don't care how profitable they are.
* in rare cases the consumer pays exactly what something is worth to them. They wouldn't pay 1 cent more.
This comes... 10x? How much grass you got in Ohio, man??
It's just a Tim Dunn thing.
Look at his reply.
Time he took to reply.
And the number of paragraphs he reply.
Somebody just refresh this site every 15 seconds.
I mean, the answer to my question of “why should I choose the company that will make the most money off of me?” is “well corporations need profits, you see.” I don’t know what’s wrong with me that I see that as a weird response.
I’ve flown with all 4 major U.S. carriers in recent months, and I’ve seen little difference in the quality between them. Therefore I make my choice on 1) price...
I mean, the answer to my question of “why should I choose the company that will make the most money off of me?” is “well corporations need profits, you see.” I don’t know what’s wrong with me that I see that as a weird response.
I’ve flown with all 4 major U.S. carriers in recent months, and I’ve seen little difference in the quality between them. Therefore I make my choice on 1) price 2) convenience 3) point value/redemption opportunities. That’s it. I don’t even think about corporate earnings.
I am glad you, once again, are addressing this issue but there are a couple factually incorrect statements.
UA's fleet right now is older than DL's. But more significantly, UA has an older widebody fleet. It is on the longest routes - which UA operates the most - that UA has the most inefficient fleet - it flies a number of 777s (which are less fuel efficient) than DL. Nearly all of DL's TPAC fleet...
I am glad you, once again, are addressing this issue but there are a couple factually incorrect statements.
UA's fleet right now is older than DL's. But more significantly, UA has an older widebody fleet. It is on the longest routes - which UA operates the most - that UA has the most inefficient fleet - it flies a number of 777s (which are less fuel efficient) than DL. Nearly all of DL's TPAC fleet is on A350s which are very fuel efficient; DL and UA have nearly identical numbers of new technology powered widebodies but that is a higher percentage of DL's fleet.
AA has about of its widebody fleet on new generation aircraft. AA has a newer fleet overall than DL and UA but all 3 currently have similar percentages of new generation powered aircraft; AA bought a lot of older generation aircraft at the end of their production line - including 737-800s.
DL gets a lot more revenue from its relationship with Amex which has the highest interchange fees which provides DL with a revenue advantage that other airlines will simply not be able to match w/ relationships with Visa.
UA gets a revenue advantage on cargo because of its TPAC system; DL's shift to A350-900s over the Pacific is already showing benefit in cargo revenue while the addition of A350-1000s will help DL cargo revenue grow any more.
and UA has a labor cost advantage that will cut their profits while DL's MRO Revenue will continue to grow and won't be matched by any other US airline.
"UA has a labor cost advantage that will cut their profits while DL's MRO Revenue will continue to grow and won't be matched by any other US airline."
If UA paid the entire flight attendant TA retro pay which is the entirety of the historical cost advantage in Q1 '26 UA still would have made more profit than DL last quarter. The other employee groups' contracts have only recently become amendable and are in line...
"UA has a labor cost advantage that will cut their profits while DL's MRO Revenue will continue to grow and won't be matched by any other US airline."
If UA paid the entire flight attendant TA retro pay which is the entirety of the historical cost advantage in Q1 '26 UA still would have made more profit than DL last quarter. The other employee groups' contracts have only recently become amendable and are in line with the industry.
MRO profit was $71m or 1.4% of DAL's net income for 2025. IOW it's de minimis.
The real question is why would Chase cut United a better deal. Is United really going to switch from Chase to C1? I highly doubt it. Amex/Delta have a good thing going but Amex is more similar to C1 than Chase. Citi won the business from Barclays and paid AA for that but also needs AA cobrand cards to enhance the value of its securitization trust (it's trying to launch the Strata cards to counterbalance...
The real question is why would Chase cut United a better deal. Is United really going to switch from Chase to C1? I highly doubt it. Amex/Delta have a good thing going but Amex is more similar to C1 than Chase. Citi won the business from Barclays and paid AA for that but also needs AA cobrand cards to enhance the value of its securitization trust (it's trying to launch the Strata cards to counterbalance that). Chase has CSR/CSP for its securitization trusts plus a whole ton of HNWIs that bank with Chase that feed that pipeline regardless of United - Chase is the market leading bank by far. So they'll cut United a "fair" deal but not much more than that.
So does United's loyalty program have 'upside' in terms of customer acquisition because of its route network? Maybe, but the recent moves we've seen from United are clearly designed to get its existing loyalty members to get its cards in order to participate in the loyalty program. Feels like a move made a bit out of weakness vis-a-vis Chase, not strength.
DL's revenue advantage is due to the size of DL's domestic network and the higher interchange fees that Amex charges which creates more revenue that it can share with DL.
UA realizes that the reason it doesn't do as well on credit card revenue is because international networks contribute much less to revenue than domestic networks and that is why UA is growing its domestic network.
AA and DL have much larger domestic networks while...
DL's revenue advantage is due to the size of DL's domestic network and the higher interchange fees that Amex charges which creates more revenue that it can share with DL.
UA realizes that the reason it doesn't do as well on credit card revenue is because international networks contribute much less to revenue than domestic networks and that is why UA is growing its domestic network.
AA and DL have much larger domestic networks while DL has grown in coastal markets because of the disproportionate amounts of high value credit card revenue while AA has cut in those markets.
and Amex simply has more revenue it can share w/ DL than Visa will ever be able to share w/ AA, UA or WN.
and trying to compare passenger revenue per seat mile to full costs is completely invalid. All of the big 3 use the same business model; costs are related to delivering total revenue - not just passenger revenue.
If you want to take out other revenue, then you have to take out associated costs. Since most credit card revenue comes from credit card companies buying miles that are used for air transportation, costs have to be pulled out if you want to compare passenger revenue to profitability.
It's interesting that international flying rights restrict the supply of seats and these airlines have additional pricing power in the North Atlantic market due to the cartel system, yet they still can't make much money on those flights.
What 'domestic networks contribute more to revenues than international networks' actually means is that the abusive merchant fees in the USA permit the airlines to entice consumers into their loyalty ecosystems, making abnormal profits through their relationships...
It's interesting that international flying rights restrict the supply of seats and these airlines have additional pricing power in the North Atlantic market due to the cartel system, yet they still can't make much money on those flights.
What 'domestic networks contribute more to revenues than international networks' actually means is that the abusive merchant fees in the USA permit the airlines to entice consumers into their loyalty ecosystems, making abnormal profits through their relationships with banks- and that the business model cannot be replicated anywhere else in the world.
Delta made $1.2 billion in profits in just the first 3 quarters of 2025 flying the Atlantic so it is very possible to make money.
Yes, credit card interchange fees add cost in some form - all things being equal - but they also create a rewards system that is unmatched in the rest of the world.
This site and others and more importantly banks benefit from these high interchange fees so they aren't...
Delta made $1.2 billion in profits in just the first 3 quarters of 2025 flying the Atlantic so it is very possible to make money.
Yes, credit card interchange fees add cost in some form - all things being equal - but they also create a rewards system that is unmatched in the rest of the world.
This site and others and more importantly banks benefit from these high interchange fees so they aren't likely to go away.
the domestic US market is more valuable than international travel because credit card revenue is a higher percentage of domestic travel.
International travel is a big place to use reward points but much less so for mileage earn.
I agree that the usurious fees are likely to stick around for a good while - the USA has embraced corporatism and won't be going back to anything like free market capitalism anytime soon.
Credit cards with wings. The financialization of modern airlines. The Big 3 oligopoly. No, not American, Delta, United... Amex, Chase, Citi...
Poor passengers.
Here are the op margins for airlines in Q1 '26 (ex si)
LATAM 19.8%
Allegiant 14.9%
Allegiant/Sun Country combined 14.7%
Sun Country 14.3%
SkyWest 12.2%
Philippine Airlines 12.1%
Republic 12.1%
Korean Air 11.4%
Aeromexico 10.6%
All Nippon 5.5%
Japan Airlines 4.8%
Delta 4.6%
Southwest 4.6%
United 4.2%
Air Canada 2.0%
Finnair -0.1%
American -0.2%
...
Poor passengers.
Here are the op margins for airlines in Q1 '26 (ex si)
LATAM 19.8%
Allegiant 14.9%
Allegiant/Sun Country combined 14.7%
Sun Country 14.3%
SkyWest 12.2%
Philippine Airlines 12.1%
Republic 12.1%
Korean Air 11.4%
Aeromexico 10.6%
All Nippon 5.5%
Japan Airlines 4.8%
Delta 4.6%
Southwest 4.6%
United 4.2%
Air Canada 2.0%
Finnair -0.1%
American -0.2%
Air France/KLM -0.4%
Turkish Airlines -1.0%
Volaris -2.7%
Air Astana -4.2%
Frontier -6.7%
Lufthansa Group -7.0%
Norwegian -7.3%
Alaska -7.5%
JetBlue -10.0%
VivaAerobus -11.2%
Icelandair -15.4%
rebel, were you mocking passengers, generally, or the poor, specifically?
Yeah, I get it, the better an airline is for a shareholder, often, the worse it is for a passenger's wallet or experience. I tend to want sensible guardrails to protect the workers and passengers, since the imbalance of power is usually in-favor of the major company (and their majority, often institutional, shareholders) over individuals.
On the data, understand that a single quarter is also...
rebel, were you mocking passengers, generally, or the poor, specifically?
Yeah, I get it, the better an airline is for a shareholder, often, the worse it is for a passenger's wallet or experience. I tend to want sensible guardrails to protect the workers and passengers, since the imbalance of power is usually in-favor of the major company (and their majority, often institutional, shareholders) over individuals.
On the data, understand that a single quarter is also somewhat misleading; for instance, this is LATAM's peak summer season in South America. LCCs usually see higher margins for Spring Break (more leisure travel to FL, Caribbean, etc.) AY, LH, lower since, in-part, carriers still dealing with closures of Russian airspace, extra fuel costs (expected to worsen for everyone in Q2 and beyond).
The simple point is that the airline industry barely makes a profit even in good times so your, 'whoa is me' dog, don't hunt.
Not one of those 3 "airlines" has passenger revenue per mile that exceeds cost per mile. What does that tell you.
Dumb question. Why does Delta do so well with loyalty when American and United (More American) have much better redemption opportunities for long-haul business? I have found skyrewards almost useless?
You underestimate the Skymiles leadership team's ability to straight up lie about results. Remember that 1% GDP stat they made up a few years ago...straight up an exaggerated lie. The real number was closed to 0.5%. They will do anything it takes to make it seem like they are improving business.
@ Andrew -- It's a great question, and you're right, SkyMiles is arguably the least valuable of the "big three" loyalty programs. I think the answer is primarily twofold.
First, people are loyal to Delta because they like the brand, even if the program isn't the best. It's the same as people getting an Apple credit card.
Second, keep in mind loyalty program also includes Amex Platinum access to Delta Sky Clubs (and things like...
@ Andrew -- It's a great question, and you're right, SkyMiles is arguably the least valuable of the "big three" loyalty programs. I think the answer is primarily twofold.
First, people are loyal to Delta because they like the brand, even if the program isn't the best. It's the same as people getting an Apple credit card.
Second, keep in mind loyalty program also includes Amex Platinum access to Delta Sky Clubs (and things like that), and that's a huge focus for Delta.
no, SkyMiles is the most valuable loyalty program from the value of its size.
American follows and then United.
The size of the domestic market matters more than international.
and the difference in valuation is because Amex is a more valuable partner because Amex has higher interchange fees.
DL gets an even bigger revenue boost because it carries more corporate revenue than any other US and probably any other global airline.
When...
no, SkyMiles is the most valuable loyalty program from the value of its size.
American follows and then United.
The size of the domestic market matters more than international.
and the difference in valuation is because Amex is a more valuable partner because Amex has higher interchange fees.
DL gets an even bigger revenue boost because it carries more corporate revenue than any other US and probably any other global airline.
When someone else pays for your air transportation, you don't make purchase decisions based on the value of the loyalty program.
SkyMiles might be the least valuable from the perspective of redemptions but the average revenue per redeemed award is pretty comparable between the big 3 - which shows that AA and UA really don't have much lower redemptions in aggregate.
Good points, especially on what most travelers value. Many are just flying domestic with their families to visit more family lol. So yeah, business class redemptions to the other side of the world is not as impotant to many.
"When someone else pays for your air transportation, you don't make purchase decisions based on the value of the loyalty program."
That's funny- when I traveled a lot for work i literally did indeed make purchase decisions based on the value of the loyalty program. After all why wouldnt you? Guess there's a lot of stupid people in the US!
Thanks Ben!
Worse for you means it's better for the airlines. I thought SkyPesos were a joke until I actually tried to use them. Delta could sells more miles to Amex, and in turns charges more for redemption. In the end, they get a lot more from their agreements with Amex compared to AA & United.
the ceos are raking in tens of millions . the taxpayers are paying for the infrastructure and atc .
the fees and fares are waayy overpriced , and the food is waayy deficient . what's to know ?
How can anyone with even minimum business knowledge think fares are overpriced when none of these companies makes a profit from flying?
I don't believe that nonsense.
Of course they make money flying passengers.
@KingBob
It's an accounting trick that fools most people.
The propaganda works because self anointed influencers love clickbait and building a narrative that airlines is a credit card company loosing money flying planes is very clickbaity.
Airlines love this narrative because it makes their operations look bad (easier for bailout less bonus and salary paid) but investors still happy (profitable = share prices)
I told you so.