Record revenue, relatively insignificant profit: American earned $111M on $54.6B while Delta and United cleared billions. The gap is getting hard to ignore.
Record Revenue, Familiar Disappointment
American Airlines just posted record full-year 2025 revenue of $54.6 billion, yet managed only $111 million in GAAP net income.
Another year, and progressively worse performance. Airlines are cyclical, fuel is volatile, and one-off events can (and do) swing quarterly results. American even called out a government shutdown impact in the fourth quarter. Still, when peers are printing real money in the same macro environment, “record revenue” means very little. Peer carriers faced the same government shutdown, the same diplomatic uncertainty, and yet performed significantly better.
Matthew covered this as well but with a focus more on future developments and American’s premium pivot, but here we will review the same disappointment but with a view on the competitive landscape.
The 2025 Scorecard: Revenue Is Not The Same As Results
Here’s the simplest way to show the problem. American’s revenue base is enormous, but its profitability is barely visible.
| Carrier | 2025 Revenue ($B) | 2025 GAAP Net Income ($MM) | Approx. Net Margin |
|---|---|---|---|
| American Airlines | $ 54.60 | $ 111 | 0.2% |
| Delta Air Lines | $ 63.40 | $ 5,005 | 7.9% |
| United Airlines | $ 59.07 | $ 3,353 | 5.7% |
| Southwest Airlines | $ 28.10 | $ 441 | 1.6% |
| Alaska Air Group | $ 14.24 | $ 100 | 0.7% |
This is where the comparison gets uncomfortable. Alaska’s 2025 revenue is a fraction of American’s, yet net income is in the same neighborhood in nominal dollars ($100M vs $111M).
That is not a typo. That is a punchline. But employees aren’t laughing and neither should shareholders.
Profit Per Dollar: American’s Problem In One Sentence
For every $1 billion of 2025 revenue, American produced roughly $2 million of GAAP net income. Delta produced about $79 million. United produced about $57 million. Southwest produced about $16 million. Alaska produced about $7 million.
When your “profit efficiency” looks like a rounding error next to your closest network peers, the conversation stops being about short-term headwinds and starts being about structural execution.
And not for nothing, Southwest went through the most radical change in its history including disavowing their entire suite of unique selling advantages, a board room coup attempt, among other challenges and Alaska Airlines acquired Hawaiian in the same year. American Airlines also has a younger fleet by 30% than Delta Air Lines and United each and about the same as Southwest, so maintenance costs should be lower and fuel efficiency should be higher with American over either of those carriers.
Why This Keeps Happening
American’s release leans hard into the usual levers: premium demand, customer experience investments, network strength, loyalty, and distribution fixes. Those are all legitimate, and any one of them can move the needle. The issue is that the needle has not moved enough, for long enough, to justify patience when competitors are demonstrating what “good” looks like.
Delta and United are not perfect airlines, and neither runs a charity. They have simply been more consistent at turning a comparable product (a domestic network plus international reach) into meaningful profitability.
American, by contrast, keeps finding itself in the same spot: big revenue, thin margins, and an earnings story that sounds more like “positioned for upside” than “we delivered.”
Has The Time Finally Come For Real Leadership Change?
I have been writing some version of this for years. Back in 2019, I argued that a flashy management reshuffle was not a strategy, and that the company was effectively asking the public to pretend the emperor had clothes.
Fast forward to these 2025 results and the question is sharper, not softer: how many cycles do you get to under-earn your peers before the board decides that “the plan” is the problem?
To be fair, American can point to 2026 guidance optimism, operational disruptions, and ongoing commercial fixes. But its peer set is its peer set. Delta and United just put up full-year profits measured in billions, not millions. When your closest comparables are clearing that bar, and you are not, the “it’s complicated” argument wears thin.
For Alaska, with the complicated year it’s had, to produce almost the same bottom line profit on a quarter of the revenue should embarrass Isom and crew but it feels like they are without shame. Southwest with less than half the revenue almost tripled profits over American and absorbed all of the bad press without implementing its new revenue channels. There’s simply not a comparable management example for consistently performing with record revenue and ever-diminishing profit.
In a wider view, American has taken in $163bn in revenue over the last three years and earned just $1.07bn combined. Delta took in $180bn during the same stretch and retained $13bn, while United accrued $170bn with $10bn retained. Alaska, with just $36bn through last three years (78% less revenue) netted $730MM (27% less profit.)
It’s inexcusable.
Conclusion
American’s 2025 earnings underscore a reality that is getting harder to spin: record revenue without real profitability is not a win, it is a warning. Delta and United are proving that a large US airline can convert strong demand into strong earnings, while American is still struggling to translate scale into results. When a much smaller Alaska operation can post profit that is nominally close to American’s on far less revenue, it stops looking like bad luck and starts looking like persistent underperformance. The calls for management change have been out there for a long time, and the 2025 numbers make the case more clearly than any hot take ever could.
What do you think?
thank you for carrying on the discussion which I have said for decades and that more and more people are saying:
AA employees’ choice of the American West mgmt team over AA’s internal mgmt team – which bungled their outside of court restructuring in 2003 – set AA up for a quarter century of underperformance
WN went from being a darling of the industry to handling that title to DL which used its 2005 chapter 11 to create the strongest US airline.
UA has seen a significant improvement but far underperforms DL; the two are not in the same category and UA received just 2/3 of the earnings of DL in 2025. With incessant fights with competitors and focus on market share over profits, UA’s outlook is never going to match DL’s.
AS is on its 2nd merger with a fairly poor track record of success from those mergers.
And AA has been led by a team that has not understood the potential AA has or how to make AA work as a national and global competitor. AA has ceded enormous amounts of high value revenue to DL mostly but also UA and now recognizes that their strategies are flawed; the question is whether they have already passed the point of no return.
it is great to see the fight finally coming out of AA as UA beats the snot out of AA at ORD but the problem is far bigger than ORD and the solution has to be executed w/ far more precision than AA has had in 50 years.
To me, one of AA’s problems is that TPTB seem to be SO focused on turning DFW into a ATL-style mega-hub that is has ignored everything else. Why else would DL’s presence be twice as big at both JFK and LGA? Who in their right minds would let that happen? Even B6 is bigger at JFK than AA. Why else would WN be bigger at PHX? Only very recently has AA started to fight UA at ORD.
Another issue (to me, of course) is that despite all of its East Coast hubs, AA only has LAX on the West Coast, whereas AS and DL fight it out for SEA and UA has SFO.
Despite TPTB’s optimism for 2026 (including the new contract with Citibank regarding credit cards), all the other airlines will leave AA in the dust once again with the final year-end profits.
As long as ‘line go up’ that’s clearly all that matters, right? Forget workers, passengers, anyone and everyone else, except management and shareholders. jUsT dOiNg BuIsNeSs…
Pretty 1990 and Dunn are the same person clowning across multiple blogs
I’ve said it before, and I’ll say it again, while AA is improving in J and PE, there is very little “premium” about the rest of the experience, and the Tempe Boys are completely oblivious to it. And as Tim Dunn said, it’s pretty…rich…that the same unions that colluded with Doug Parker to depose the Tom Horton regime are now complaining about the completely predictable results of letting America West’s management run the show.
We can only hope the board finally decides to hold Isom accountable and bring in some new voices from the outside to right the ship. Nobody benefits from an uncompetitive AA.
Will the current AA management be able to continue like this in 2026?
With all due respect, you’ve been the CEO of HOW many airlines?
Does not having Airline X CEO on the resume precludes one from analyzing public data and drawing logical conclusions? We can’t tell conclusively why things happened without having insider knowledge but the data by itself tells us what happened.
So what are we missing by not having been an airline CEO?
@angieK – Thank you! The “you’ve never run an airline so you can’t possibly know that it’s failing” is just the laziest and most intellectually limited form of argument. I was never an NBA coach so I can’t possibly know that a team losing 50-1 every year to the same teams with the same resources has player and coaching issues. That specific example is, of course, the net income difference between Delta and American this year. No one can know if their steak is any good unless they were a chef, no one can say whether a movie was a commercial failure without running a studio – it just assumes there is no objective good or bad any more, even with statistics present.
American Airlines does not lead in customer satisfaction scores, profitability, on-time performance, employee satisfaction, or any other measure I can find other than total available seats and doesn’t even lead total available seat miles (that belongs to United at last check.)
@DesertGhost – “With all due respect” is anything an objective truth any more or do I need to be a firefighter to know that a house is burning to the ground?
The results are awful because the airline is awful. I hate to tell AA but Covid is over and there is no excuse for continual, annoying schedule changes that screw up transfers or meetings and pickups. I have flown 24 times on AA in 2025 and 14 of them had schedule changes more than two weeks before the flight, 3were cancelled or delayed over four hours (and nobody seemed to care) and 2 had schedule changes of less than 10 minutes (original schedule not schedules due to delays on the day of the flight). Of the 24 only 6 were within 15 minutes of the scheduled arrival time. I understand you can have day of flight changes due to weather, maintenance and other issues but at least treat us like adults, give us honest information and show at least some amount of concern and sense of urgency. At least 50 percent of staff, especially FA’s don’t give a doo-doo. The only thing good about AA, and it is very, very important, is that the pilots do fly safely. Unfortunately because I fly internationally and start from a smaller city AA is virtually my only choice although I have discovered this year that Delta or United are worth some “backtracking” connections to get where I need to go.