American Airlines Hopes New Airbus A321XLR Will Move It Closer To Delta

Topline: American and Delta Execs Spoke to Investors

Delta remains the leading U.S. carrier, but American thinks it can move closer in financial metrics and passenger preference, top executives from the two carriers told investors on Wednesday.

United executives did not appear at either conference, but United’s effort to catch up with Delta is well known as CEO Scott Kirby seemed to become the face of the airline industry during 2025.

“Every airline in the United States has changed their strategy post-Covid,” Delta CEO Ed Bastian said at a Morgan Stanley conference. Among them, “United is looking to copy us. I don’t blame them. I would copy Delta too if I was smart. They’re smart.”

Delta Still Leads the U.S. Airline Industry

Bastian reminded that between Delta and United, “You have two airlines generating 100% of the profit of the industry,” adding, “It’s been happening for several years with Delta being more than 50% of that profitability. We have 20% of the seats in market, yet we generate over 50% of the overall profits.” He noted that 15% of Delta profit goes to profit sharing with employees.

Delta and American Express No Longer Argue

Another key is the relationship with American Express, which issues co-branded credit cards. Credit card remuneration has become a bedrock of airline industry profits: Delta leads in extracting the benefits. Bastian noted the relationship with American Express is more than four decades old, and has surpassed the point where two affiliates began as semi-rivals.

“In the early years we spent a lot of time figuring out whose consumer it was,” he said. At first, “there was a lot of negotiating what slice of the pie you’re getting,” he said. “You’re get an outsized slice. I’m not getting my share. The reality is we don’t argue about that anymore. We talk about how are we going to grow the overall size of the pie.

Now the understanding is “It’s not yours, it’s not ours, it’s a shared pool; we both benefit and we both share the experience,” he said, noting that Delta is the number one source of American Express revenue, with 30% of its US consumer spend on the Delta card.

One more mark for Delta success is ongoing debt reduction, slated to reduce Delta debt to about $10 billion in 2026 from about $15 billion today, freeing up opportunities to use the carrier’s $3 billion to $5 billion in annual free cash flow, which will total about $4 billion in 2005.

American Wants To Catch Up To Delta

American is behind Delta in various ways. Through the third quarter, American’s free cash flow was $1.7 billion and its debt was about $36 billion. Its goal is to reduce debt to below $35 billion by the end of 2027.

But American is not sitting still. Speaking Wednesday at a Goldman Sachs investor conference, CFO Devon May supplied reasons why American might begin to catch up in 2026

Delta led the industry’s obsessive focus on adding premium seating, and United has followed. But it’s unreasonable to think that American cannot play the same game.

May spoke of fleet improvements, increased premium seating, stronger hubs, a new credit card arrangement that takes effect in 2026, regained corporate market share and cost-cutting as areas where American can gain ground.

With an average aircraft age of about 14 years, American’s fleet is a year younger than Delta’s and two years younger than United’s. The airline has 67 Boeing 787s, will take delivery of another 20 by the end of the decade, and has options for 25 to 30 more.

New Airbus 321XLR Leads American Reconfiguration Charge

American also took delivery of its first Airbus A321XLR in October, with the first flight scheduled for December 18 on the JFK-LAX route. American will be the first airline to fly the 321XLR. The configuration will be three cabins, with 20 lie-flat suite seats, 12 premium economy seats and 123 coach seats.

As American takes more A321XLRs, service will expand to international routes. The first will be JFK-Edinburgh, Scotland, starting in March. By the end of 2026, American will have 15 or 16 XLRs in its fleet, as it seeks to entice passengers to fly narrowbody aircraft to Europe.

The configuration is part of American’s effort to increase premium seating by 20% and lie-flat seating by 50% by the end of 2030. American has sought for the past decade to boost premium seating and airport clubs and the loyalty program, May said, but “Maybe we didn’t monetize it as well as we could have.” Still, he said, “We’re excited to be a global premium airline.”

May cautioned that while the reconfigurations will help, American will not catch up to peers in profit margin next year. “Just in 2026 probably is a little bit too short term, but we think it’s an opportunity for us in 2026 to continue to drive margin.”

Now CitiBank Can Flaunt American Partnership

American should also gain ground in credit card revenue. A new deal with Citibank takes effect in 2026, eliminating Barclay’s as an issuer of American cards and giving Citibank exclusivity. That should enable full competition with American Express and Chase, who issue Delta and United cards respectively. Credit card remuneration stood at $4.5 billion annually at the end of the third quarter: May envisions $10 billion annually by the end of the decade, which would put American at roughly the same place as Delta.