Delta, United leaving other airlines behind

Delta Air Lines and United Airlines have accounted for most of the industry’s profits since 2022, but their appeal to wealthy travellers could become a liability if the economy weakens, writes Niraj Chokshi from New York

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Airlines in the United States seem to be separating into two groups. Delta Air Lines and United Airlines make lots of money. And then there’s everybody else.

Those two airlines have pulled ahead of the pack in recent years after making a few big bets. They expanded loyalty programmes and leaned into selling more firstand business-class seats. And they operate lots of international flights.

That has paid off handsomely. Delta and United have generated most of the industry's profits since 2022. And some experts believe their lead is only expanding.

“This is kind of the industry paradigm now,’ said Tom Fitzgerald, an airline industry analyst for the investment bank TD Cowen. “I think the divergence is set to become more and more stark every year.”

Earlier this month, Delta said it had earned more than $1.4 billion from July to September, up 11% from the same period a year earlier. United said on Wednesday that it had earned $949 million in the third quarter.

Both airlines have benefited substantially from increased revenue from loyalty programmes and the sale of premium seats.

Of course, every business strategy has some risk, and Delta and United could struggle if other airlines figure out more effective ways to compete with them or if the economy weakens in ways that hit affluent consumers particularly hard.

Delta and United began putting their strategies in place years ago. After mergers in 2008 and 2010, they assembled fleets of jets suited to many uses, added premium seats to those planes, upgraded technology throughout the business and revamped their frequent-flier schemes.

The airlines also added more routes and established partnerships with other airlines, extending their global reach. Those changes gave them new sources of revenue and made Delta and United more appealing to corporate executives and affluent travellers.