American Airlines CEO Robert Isom has outlined an ambitious strategy to close the carrier’s multi-billion-dollar profitability gap with rivals United Airlines and Delta Air Lines. Speaking to CNBC, Isom said the Fort Worth-based airline is investing heavily in the following: premium cabins, airport lounges, operational reliability, and new long-haul aircraft as it seeks to attract higher-spending travelers. The comments come ahead of American’s second-quarter earnings report and as the airline expects a significant improvement in profitability during 2026.

Despite operating roughly 6,500 flights per day and maintaining the largest network in North America, American continues to trail its two largest competitors financially. For example, United generated around $3 billion more profit than American last year, while Delta widened the gap even further. Isom believes the airline’s next phase of growth depends less on expanding its size and more on generating greater revenue from every passenger.

American’s Premium Push Targets The Profit Gap

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American’s turnaround strategy focuses on improving profit margins rather than simply increasing passenger numbers. According to Isom, the airline wants to become “best at everything that we do,” with executives prioritizing reliability, premium products, loyalty growth, and network improvements. The airline also hopes these investments will convince more travelers to pay for premium cabins and additional services instead of relying on discounted fares.

Among the biggest initiatives are redesigned long-haul cabins, expanded airport lounges, and a potential widebody aircraft order expected as early as this year. American is also upgrading more of its Boeing 777 and Boeing 787 fleets with new premium suites while evaluating additional aircraft from either Boeing or Airbus to support future international expansion. Those aircraft would likely enter service early in the next decade.

Robert Isom, American Airlines CEO, told CNBC last month:

“Our long-range plan is certainly making up the margin gap.”

Reliability And Customer Experience Are Central To The Strategy

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While premium seating generates significantly higher revenue, American acknowledges that attracting wealthier travelers also requires a consistently reliable operation. The airline has been working to improve on-time performance by spreading out flight schedules at major hubs and using artificial intelligence to predict maintenance issues before they disrupt operations. These efforts are intended to narrow the operational gap with Delta and United, both of which continue to outperform American in punctuality.

American is also investing in its airport experience. As analyzed by The View From The Wing, the airline plans to open the largest Admirals Club lounge in its network at Dallas/Fort Worth International Airport (DFW) while expanding premium facilities across its largest hub. Additional grab-and-go lounges and upgraded Flagship check-in areas are also planned as part of DFW’s ongoing airport expansion.

Executives say these investments complement improvements to the AAdvantage loyalty program and new technology that allows customers to purchase premium upgrades more easily. Together, these initiatives are designed to increase high-yield revenue rather than relying solely on passenger volume, a strategy that Delta and United have refined over many years.

Stronger Earnings Offer Momentum, But Challenges Remain

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Wall Street expects American’s strategy to begin delivering tangible financial results. Analyst estimates forecast adjusted earnings of approximately $0.64 per share in 2026, representing nearly an 80% increase from 2025. Investors also expect further earnings growth in 2027 as premium investments mature and the airline continues reducing the debt accumulated during the pandemic.

Even with those improvements, American still faces some hurdles. Delta and United spent years building premium-focused business models, while American must also convince customers that its service has improved and become much more attractive. Industry experts note that changing public perception requires visible improvements that travelers can consistently experience, not simply announcements about future investments.

For Isom and American’s approximately 139,000 employees, the challenge extends beyond introducing new products. Success ultimately depends on ensuring customers notice all these positive changes, choose American over competitors, and are willing to spend more when booking their next flight. If that happens, the airline could finally begin narrowing the $3 billion profitability gap that has separated it from its biggest rivals in the US Big Three.