U.S. airlines are operating in a challenging environment with more flights than expected and less demand than predicted in 2025. Nevertheless, Delta Air Lines and United Airlines also have announced profitable quarters and improving market conditions. In contrast, airlines with more of a domestic focus have struggled more.
SourceDelta Air Lines and United Airlines have been the standout airlines, earning the bulk of the airline industry’s profits. Indeed, Delta and United generated eight in 10 overall profit at the top seven U.S. airlines last year. Margins in the airline sector are thin to begin with, averaging under 4% versus nearly 20% for most other major U.S. industries, so the likes of Delta and United have harnessed their robust international networks and premium offerings to differentiate themselves.
During the latest round of quarterly earnings reports, United Airlines chief executive Scott Kirby stressed the difference, pointing out the stronger positions of Delta and United relative to other carriers.
Analysts pin the relative success of Delta and United on the airlines’ focus on premium and international flyinghemisphere as well as in court. Despite early-market volatility, both airlines have benefited from an uptick in international travel demand and a continued appetite for the more expensive premium seating.
Delta said its premium cabin revenue for the second quarter rose 5%, while it was up double-digits with its partnership with American Express generating $2 billion, 10% higher than the same time last year. Last month United Airlines also announced a sweeping upgrade of its Polaris premium cabin service as well as additional dedicated premium lounges, adding to customer stickiness and revenue sources.
Domestic airlines, however, have had it tougher, largely because there is too much supply of seats and weaker consumer demand than was initially predicted. Despite continued inflation in other areas of the economy, a June 2025 report by the U.S. Bureau of Labor Statistics showed that airfare prices plunged 3.5% year over year.
And free checked luggage pioneer Southwest and other budget friendly airlines have charged for items such as checked luggage, historically included in the ticket price, to make money. The airline also plans to add seat reservations and more premium seating to create new sources of revenue.
Beyond the summer travel season, major airlines like Delta and United are trimming their capacity forecasts. Airlines are even having trouble with what is usually a lucrative summer peak, forcing them to rethink how they maintain a healthy bottom line.
But both Delta and United have more robust international networks, and continue to have a competitive edge. United reported a relatively modest 4.5 percent decrease in revenue per available seat mile, which was partly offset by strong performance on trans-Pacific routes to places like Japan. Delta has done the same, including shifting its capacity in a strategic manner to address changing demand, particularly in premium international markets.
Airlines are looking for new ways to generate added income beyond ticket sales as competition heats up. Delta, for example, is looking at even more segmentation in premium cabins, offering tailored experiences to different customer types in order to maximise revenue.
United Airlines have been steadily growing its premium economy seats which are aimed at travellers wanting comfort without paying full business class prices. These steps are designed to replace falling domestic revenue with higher yields on premium international travellers.
Even as the U.S. airline industry faces prolonged turbulence, Delta and United Airlines are each confident in their market positions. Their own initiatives in premium product, loyalty and international connectivity should help them to stay ahead of the pack and cope better with the challenges facing the industry in the longer term than their purely domestic competitors.
