Why American Airlines Keeps Falling Behind Delta and United — The Strategic Mistakes Costing Billions

American Airlines is the largest airline in the world by passengers and fleet size, yet it consistently earns less money than rivals Delta and United. What went wrong? From retiring key aircraft during COVID to failed expansion strategies and a disastrous corporate sales experiment, a series of management decisions may have put the airline at a long-term disadvantage.

Trickytube’s Quick Summary

• American Airlines is the largest airline globally, but financially weaker than Delta and United.
• During COVID, it retired 30% of its long-haul fleet, limiting its ability to capture the travel rebound.
• Its fleet strategy relies heavily on newer but expensive aircraft, which struggle during low demand periods.
• Weak hub connectivity in Los Angeles hurts its ability to compete in Pacific routes.
• Expansion attempts in Seattle and Austin failed to generate sustainable growth.
• A controversial corporate booking strategy led to $1.5 billion in lost revenue.
• The airline is now restructuring but still faces long-term competitive challenges.

Why the World’s Largest Airline Keeps Struggling

How can the largest airline on the planet still struggle to make money?

It sounds almost impossible. Yet that’s exactly the reality for American Airlines. Despite operating thousands of flights and carrying millions of passengers every year, the airline has repeatedly underperformed financially compared with its biggest rivals, Delta Air Lines and United Airlines.

For years, American has been stuck in a strange position: huge operational scale but weaker profitability. According to industry analysts, the problem isn’t demand or brand recognition — it’s strategy. And several key decisions, especially during and after the pandemic, may have created challenges the airline is still trying to fix today.

The Pandemic Decision That Changed Everything

When global travel collapsed in 2020, airlines had to make extremely difficult choices. But American Airlines took one of the most aggressive approaches in the industry.

Management decided to retire nearly 30% of its long-haul fleet. This included wide-body aircraft such as the Airbus A330 and Boeing 767, along with older Boeing 757 jets.

At the time, the decision seemed logical. International travel looked like it might take years to recover. Cutting aircraft would reduce costs and simplify operations.

But something unexpected happened.

By 2022, travel demand rebounded far faster than most airlines predicted. International routes — especially transatlantic flights between North America and Europe — suddenly became some of the most profitable routes in aviation.

And that’s where the problem appeared.

While competitors still had aircraft ready to deploy, American Airlines simply didn’t have enough long-haul planes to capitalize on the surge in demand. Rival airlines quickly filled the gap, capturing revenue that American could no longer compete for.

In hindsight, the move may have been one of the most expensive strategic miscalculations of the pandemic era.

The Fleet Problem Nobody Talks About

Even the aircraft that remained in American’s fleet created another issue.

The airline focused heavily on newer, more modern jets, which are generally more fuel-efficient but also far more expensive to operate if they’re not flying full.

That sounds counterintuitive, but it’s a real problem in aviation.

During peak seasons, these aircraft can generate strong profits. But during slower travel periods — especially winter months — filling those expensive planes becomes much harder. When passenger demand drops, operating large, costly aircraft can quickly turn profitable routes into money-losing ones.

In contrast, competitors like Delta and United maintained a more balanced mix of aircraft types, allowing them greater flexibility when demand fluctuates.

The Pacific Network Weakness

Another major challenge lies in the airline’s trans-Pacific strategy.

Flights to Asia are among the longest and most competitive routes in global aviation. Success in this market usually depends on having a strong hub that can feed passengers into international flights.

For United, that hub is San Francisco.

For Delta, it’s Seattle.

American, however, relies heavily on Los Angeles. And unlike its rivals, it lacks a powerful domestic feeder network there. Without enough connecting passengers feeding into long-haul flights, building a dominant Pacific network becomes extremely difficult.

This structural disadvantage has limited American’s growth in one of the world’s most lucrative aviation markets.

Expansion Attempts That Didn’t Work

In an attempt to close the gap with competitors, American tried several bold expansion strategies.

One involved building a stronger presence in Seattle through a partnership with Alaska Airlines. The idea was to tap into Alaska’s regional network and funnel passengers into American’s international flights.

But the strategy never gained real traction and eventually fizzled out.

Another attempt focused on turning Austin, Texas into a major focus city. American dramatically increased flights there, hoping to capture the city’s rapidly growing tech economy.

The problem? The demand simply wasn’t large enough to support the expansion. As flights increased faster than passengers, profitability suffered.

Sometimes aggressive growth works. In this case, it mostly created additional losses.

The $1.5 Billion Corporate Sales Mistake

Perhaps the most controversial decision came from the airline’s corporate sales strategy.

American attempted to push travel agencies and corporate clients away from traditional booking systems toward a new digital platform called NDC. To force the transition, the airline removed its cheapest fares from standard booking channels.

The move backfired spectacularly.

Instead of switching platforms, many corporate clients simply booked flights with competing airlines instead. Travel managers prefer systems they already understand — and sudden changes can disrupt entire corporate travel programs.

The result was estimated revenue losses of around $1.5 billion.

It’s a striking example of how even a technically innovative idea can fail if customer behavior isn’t carefully considered.

Where American Airlines Stands Today

To its credit, American Airlines has started making adjustments.

The company is rebuilding its corporate sales team, revising its distribution strategy, and bringing in new aircraft designed with larger business-class cabins — an important revenue source in long-haul travel.

But many analysts believe these changes mostly return the airline to where it was before the pandemic — and even then, it was already the weakest financially among the “big three.”

In other words, the recovery may still take years.

And in an industry where margins are thin and competition is fierce, strategic timing can make or break an airline.

FAQs

Why is American Airlines less profitable than Delta and United?

American Airlines has struggled due to several strategic decisions, including aggressive fleet retirements during the pandemic, weaker international network hubs, and failed expansion attempts.

What aircraft did American Airlines retire during COVID?

The airline retired several wide-body aircraft types, including Airbus A330, Boeing 767, and Boeing 757 jets.

What was the corporate sales strategy mistake?

American attempted to push corporate travel clients to a new booking system by removing cheap fares from traditional platforms. Many companies instead booked with competitors.

Is American Airlines recovering financially?

The airline is rebuilding parts of its business, including corporate sales and long-haul capacity, but analysts believe full recovery could take several years.