As anyone who follows the US airline industry knows, Delta is the most profitable US carrier, United is the second most profitable US carrier, and everyone else is quite a ways behind.
It’s only in the past few years that United has started to get into Delta’s league, and leave American in the dust. We know that United CEO Scott Kirby desperately wants his airline to overtake Delta. So along those lines, he was asked a question about that, and his answer was surprisingly measured… sort of.
In this post:
Scott Kirby says United beating Delta isn’t a priority
On the earnings call following United’s Q2 2025 financial results, JP Morgan analyst Jamie Baker asked Kirby about how he sees United overtaking Delta, and what that would look like:
“Your primary U.S. competitor has a significant nonunion labor construct. It’s got one of the most efficient hubs in the country. It’s got a sizable MRO. It’s got perhaps the most evolved relationship with its loyalty partner. And to your credit, Scott, I mean, you’ve spoken publicly about holding Delta in high regard. So my question is, what are the catalysts that potentially allow United to overtake Delta margins in coming years? Is it structural? Is it simply brand preference or perhaps you reject the premise that you can have the industry’s highest margins, but I doubt that’s going to be your answer.”
Here’s how Kirby responded:
“I appreciate the question. But what I’d say is I do respect Delta. In fact, on a conceptual level, much of what we’ve been trying to do for the last 15 years at the airlines I’ve been at is win brand loyal customers. And I think they were one of the first airlines, maybe the first in the U.S., to really prove that winning brand loyal customers was the winning formula for airlines. But my focus is entirely on returning United Airlines to solid double-digit margins and higher absolute margins as opposed to what we do relative to Delta.”
“I think we are the only two airlines that have a — we’re the only two brand loyal, revenue diverse airlines. I think that is structural. It is permanent. We can talk in more detail about why. It is not copyable by anyone else. And we already generate the bulk of the industry profits. I suspect when you hear earnings results next week, despite the challenges that Delta had last year at CrowdStrike, we have this year, there’s going to be those ups and downs that our margin gap to the two of us, our margin gap to the industry is going to continue to expand.”
“And I think we’re going to wind up in the same ballpark on margins. You mentioned some of their advantages. We have some advantages as well. Our hubs are better. Atlanta is a great hub, but collectively, our hubs, I think, are better. They’re in bigger cities. We have better international gateways in San Fran, Newark and Dulles in particular. So I think those are going to largely balance out. We’re going to wind up with similar margins. But I’d much rather us have 13% margins and Delta have 13.5% than us have 10% and Delta have 9.5%.”
“And everything we’re doing is 100% focused on winning brand loyal customers and creating a great airline that customers are going to choose to fly because that is going to maximize our absolute margins. And this quarter is another — like this first half of the year, it’s remarkable to me, everything that’s happened this year that we’ve grown earnings and margins for the first half of the year. And our guidance is for earnings to be down a little bit this year given everything that has happened.”
“But we have a shot at actually growing earnings this year, which would be a truly incredible result and proof point that winning brand loyal customers was the right strategy. We started it a long time ago. You can’t flip it overnight. The two of us have the right strategy, and we are going to generate the bulk of the industry profits.”
What should we make of Kirby’s answer about Delta?
Kirby made a few interesting points with how he answered this question, so let’s talk about that a bit…
First of all, Kirby claims United’s focus is on absolute margins, rather than on specifically beating Delta. In other words, he’d rather that United have higher margins while not beating Delta, rather than having lower margins while beating Delta. Fair enough, though personally I think he’s more motivated competitively than anything else, and I’m not sure he cares as little about beating Delta as he admits.
Second, I’m not sure I agree with his claims about the Delta and United advantages being “structural,” “permanent, and “not copyable by anyone else.” Sure, maybe other airlines can overtake Delta or United in the next couple of years. But as we’ve seen over the years, nothing in the airline industry is permanent. I suppose it’s “permanent” in airline speak, the same way that change fees are eliminated, before being reinstated.
Earlier this year, Kirby talked about why he thinks American can’t become a premium airline, and the logic is along the same lines — he essentially thinks that Delta and United have built moats around their businesses. I think that’s a bit too much confidence.
Third, it’s noteworthy how Kirby states that everything “balances out” between Delta and United based on United having “better” hubs in bigger cities, which are better long haul gateways. In many ways, he doesn’t actually answer the question that was asked.
Delta is still ahead of United financially, and Kirby doesn’t offer any vision for how financial performance will improve in comparison to Delta, other than “winning brand loyal customers.” And I guess that goes back to the first point, which is why he’s focused on absolute margins, rather than sharing a vision for how United will beat Delta.
Bottom line
United CEO Scott Kirby is an interesting guy, and he was asked about his strategy for catching up with Delta, given the Atlanta-based carrier’s advantages. Kirby wouldn’t admit that he cares about beating Delta, but rather, said he is focused on United’s absolute margins. We’ll see how this all evolves, but I found the comments to be quite interesting…
What do you make of Kirby’s comments on United narrowing the gap with Delta?
I hope Delta and United continue to push each other. That's probably the best thing the US industry and for consumers. Better to be racing to the top for once than to the bottom.
To Ben's point about Kirby being a competitive guy, I'd be more concerned what happens if he finally "wins"? United continuing to be a close second might be a good thing.
Off topic:
https://edition.cnn.com/2025/07/17/travel/tsa-family-military-checkpoint-expansion
a good take by Ben and also the kind of response that Kirby and UA needs to take.
UA needs to do what every other airline and company does - just do what is best for UA and be competitive but stop comparing everything to UA.
Analysts didn't ask DL about how DL has benefitted from EWR's capacity cuts because DL execs have repeatedly refused to make comparative statements about DL vs. the industry. DL...
a good take by Ben and also the kind of response that Kirby and UA needs to take.
UA needs to do what every other airline and company does - just do what is best for UA and be competitive but stop comparing everything to UA.
Analysts didn't ask DL about how DL has benefitted from EWR's capacity cuts because DL execs have repeatedly refused to make comparative statements about DL vs. the industry. DL execs frequently say that they do what is in DL's best interests which is all any company needs to say.
UA will do well and will continue to manage what it has well.
Ben is also right that it is wrong to believe that AA can't fix what has been wrong - and AA is undoubtedly also benefitting strongly from UA's EWR reductions and the shift in traffic from EWR to LGA and JFK.
and I still believe that WN could easily blow the big 3 dominance of the international markets out of the water with a conversion of a piece of their massive MAX order book to 787s - which Boeing would absolutely love to do - and have far more impact than AS will ever hope to have in international markets.
See how Kirby is fluffy?
That's exactly like you.
Does it ever get tired spamming alt accounts?
I'm not sure why anyone would think Newark is a better hub than [literally anywhere] but I agree with him on one point: Focus on your own company, and so what if you're a close #2 some quarters?
In theory, Newark "should" work as well or better than LGA/JFK because it is not slot and/or perimeter-restricted, much as with IAD vs. DCA. So United should be able to optimize both connections and O&D traffic at EWR to provide a good and user-friendly experience. It also has the same rail link to Penn Station as JFK does, and there is generally a large catchment area west of the Hudson River where it is functionally...
In theory, Newark "should" work as well or better than LGA/JFK because it is not slot and/or perimeter-restricted, much as with IAD vs. DCA. So United should be able to optimize both connections and O&D traffic at EWR to provide a good and user-friendly experience. It also has the same rail link to Penn Station as JFK does, and there is generally a large catchment area west of the Hudson River where it is functionally impossible to drive to JFK/LGA at most hours that EWR should "own".
In reality, we know EWR has a lot of problems, both within and outside of UA's control.
Just a quick note. You mention that EWR is not as slot congested in comparison to JFK. As someone who has done schedule planning for Intl. airlines over the 15 years, that is not entirely true.
You are right that EWR is less constrained from a runway slot perspective (handled by the FAA) however EWR is far more terminal constrained (slots haded out by the local terminal operators). Slots in the US are not just...
Just a quick note. You mention that EWR is not as slot congested in comparison to JFK. As someone who has done schedule planning for Intl. airlines over the 15 years, that is not entirely true.
You are right that EWR is less constrained from a runway slot perspective (handled by the FAA) however EWR is far more terminal constrained (slots haded out by the local terminal operators). Slots in the US are not just allocated based on runway availability, but terminal capacity too and they are allocated separately.
Over the last few years I have had a much harder time obtaining slots for my airline at EWR than I have at JFK!
@dx, almost all of what you write is spot on but:
"It also has the same rail link to Penn Station as JFK does"
Well no, and this is why the perception of EWR to most NYC residents continues to suffer. If the LIRR tubes under the East River fail, I can take the LIRR to Atlantic Terminal or Hunterspoint or Woodside, et al, and find my way home using subway/bus. If the solitary ancient...
@dx, almost all of what you write is spot on but:
"It also has the same rail link to Penn Station as JFK does"
Well no, and this is why the perception of EWR to most NYC residents continues to suffer. If the LIRR tubes under the East River fail, I can take the LIRR to Atlantic Terminal or Hunterspoint or Woodside, et al, and find my way home using subway/bus. If the solitary ancient tube of NJT fails under the Hudson, I am stuck trying to figure out NJT buses to PABT or how to get to the PATH (surprisingly difficult, as my better half recently figured out, only a couple miles from Newark).
EWR still makes a lot of sense for about half of the NYC metro area but it will always be in Jersey and come with incumbent beliefs/realities.
It's located in the most densely populated state in the US, and is just miles away from the largest city in the country. I know NJ is always (irrationally) hated on, but United knows what they're doing. They even capture travelers as far south as Trenton/Princeton
As long as the ‘Big Three’ U.S. carriers continue to concern themselves with the business of each other, they will never compete with the upper echelons of the world class airlines.
Respectfully, you're wrong here AeroB13a, for two reasons:
1. The Big Three US airlines (and especially Delta and United) have radically improved their longhaul premium cabins compared to a decade ago, and are leading the pack on things like the race to fleetwide hi-speed Wifi.
2. The "upper echelons of the world class airlines" have nearly all degraded their longhaul premium cabin experiences since the pandemic, and in some cases have also fallen behind...
Respectfully, you're wrong here AeroB13a, for two reasons:
1. The Big Three US airlines (and especially Delta and United) have radically improved their longhaul premium cabins compared to a decade ago, and are leading the pack on things like the race to fleetwide hi-speed Wifi.
2. The "upper echelons of the world class airlines" have nearly all degraded their longhaul premium cabin experiences since the pandemic, and in some cases have also fallen behind the US3 on hard product. Sure, the QSuites are nice...when your flight has them, and QR doesn't really care about the maddening lack of consistency.
While US carriers have improved, Qatar still ranks #1 globally with Qsuites, dine-on-demand, and caviar. American's new suites are nice, but they're catching up to where Qatar was years ago, not surpassing current standards.
That said, you're right about consistency - Qatar's QSuite deployment is spotty and service complaints are real. US carriers are also winning on fleet-wide WiFi and operational reliability.
Your take feels premature rather than wrong. The trends favor US carriers, but...
While US carriers have improved, Qatar still ranks #1 globally with Qsuites, dine-on-demand, and caviar. American's new suites are nice, but they're catching up to where Qatar was years ago, not surpassing current standards.
That said, you're right about consistency - Qatar's QSuite deployment is spotty and service complaints are real. US carriers are also winning on fleet-wide WiFi and operational reliability.
Your take feels premature rather than wrong. The trends favor US carriers, but on pure product quality today Qatar/Singapore still edge them out. Give it 2-3 years though.
do you think Delta can get the closest out of the US big 3 to QR/SQ/JL/NH with their new Delta One product that's coming on the a350-1000's? rumor is that a new suite is coming and Delta is in the process of planning a significant overhaul to the soft product
Hello HeathrowGuy, with regard to your assumption that I might be wrong in what I have posted above. Your view is interesting and might have some validity, however, it is my opinion that all three U.S. airlines have far to much ground to make up before they can actually compete.
1. WiFi upgrades will not make a sufficient impact to make much of a difference as almost all airlines are carrying out improvements.
2....
Hello HeathrowGuy, with regard to your assumption that I might be wrong in what I have posted above. Your view is interesting and might have some validity, however, it is my opinion that all three U.S. airlines have far to much ground to make up before they can actually compete.
1. WiFi upgrades will not make a sufficient impact to make much of a difference as almost all airlines are carrying out improvements.
2. I do not tend to agree with you that the top airlines have “Degraded” their products sufficiently, nor, have the US3 improved substantially enough to catch up anytime soon.
3. The US3 have a real mountain to clime in the area of front line customer services.
4. The US3 place far too much emphasis upon brand loyalty and points dependency.
Of course only Time will tell if you or I have misjudged the situation. Interesting times ahead.
@HeathrowGuy
I take your arguments on board, and agree that the US Big 3 airlines have improved considerably. But such is the higher standards in both hard and soft products for ME and Asian carriers that the best the U.S. airlines can offer will still fall short of their aforementioned rivals. My experience has consistently been that a 'bad day' - relatively speaking - on a ME and Asian carrier (e.g. Qatar or Singapore) is...
@HeathrowGuy
I take your arguments on board, and agree that the US Big 3 airlines have improved considerably. But such is the higher standards in both hard and soft products for ME and Asian carriers that the best the U.S. airlines can offer will still fall short of their aforementioned rivals. My experience has consistently been that a 'bad day' - relatively speaking - on a ME and Asian carrier (e.g. Qatar or Singapore) is still better than a 'good day' on either United, Delta and American. Crucially, the biggest downfall for U.S. carriers remains their generally lacklustre cabin crew. I put it to you that even if United or Delta or American had the best hard product, they would still be staffed by surly matrons. And that would be the memory retained by pax.
Then why do you constantly infest articles relevant to the big three? Moron