The US based Airlines competition in 2026 might be the best ever; travel is changing
United States-based airlines are in a competitive turf war across the country. With budget carrier Spirit going bankrupt and losing a credit card deal, American and United's Chicago and soon Los Angeles turf war, United revisiting JFK and partnering with JetBlue, sudden Hawaii expansions, Robert Isom, CEO of American, allegedly being terminated, and more, things are going out of hand.
To start with the basics, Spirit Airlines, a budget carrier, filed for bankruptcy this past summer for the second time; furthermore, Spirit is losing millions of dollars a day. Spirit has either sold or returned over 100 aircraft at below-market values, sold Chicago gates, and has seen its shares down just over 96%. Yesterday, Spirit lost its credit card deal, which is problematic because airlines no longer make money from flying; they do so through credit cards and their loyalty programs.
Probably the most prominent developments in the industry are American Airlines' lagging profits, its competitive push in Chicago, and United's counterstrike. While competition is beneficial because it gives Chicago and connecting passengers lower fares, it is costing many people a lot of money. American and United both lose millions flying out of Chicago. The reason they fly, knowing they lost money, is very simple: they expect to make it back and actually profit because of credit card revenues. Approximately, American Airlines lost $2 million flying, but made $2 billion from credit cards. Chicago has one of the largest global markets, and both airlines would do anything to increase their market share. United has tried to offer status in exchange for opening a credit card, and American is offering bonus miles. Additionally, both airlines are operating larger schedules and serving more destinations than usual to improve convenience and attract customers. American also announced an expansion to its Chicago Admirals club. In the coming years, American and United will continue to compete for Chicago with flashy routes to Europe, Hawaii, and beyond. While United isn’t only coming after American in Chicago, it's also coming after Los Angeles and, soon, New York.
United is coming after American Airlines JFK with a strategy. After leaving over a gate protest, they returned to JFK with a strong presence, supported by a shared computer system and a codeshare agreement with JetBlue. While the market-share issue is questionable, the FAA is allowing it. United has started with a domestic network but will expand into Europe.
Delta and American announce new services to Hawaii from the Midwest. American from Chicago to Maui, and Delta from Boston to Honolulu and Minneapolis to Maui. Delta also expanded a lot of its services. This is a sudden shocker, but the demand is there for an expansion. Airlines don’t have year-round demand to most European destinations, so including winter destinations like Hawaii is important and makes this expansion less surprising.
American Airlines has gone through some financial troubles. Their CEO, Robert Isom, is often considered at fault for this. Every opportunity for him to save the day, he didn’t. Starting with his attempt to compete with budget carriers like Spirit and cut costs, ruining the customer experience. He then retired all A330s and 767s from his fleet, leaving the fleet without a large transoceanic network. He failed to rebuild hubs in Chicago, NYC, and LA after covid giving competitors a large lead. Following this, his response to the tragedy of flight 5342 was lacking. The company is losing money and doesn't seem to be performing well. Rumors are that he will be terminated this coming February 28th, 2026. While there are limited sources confirming this, I find his termination fairly likely in the coming months.