FORT WORTH, TEXAS – American Airlines is facing mounting pressure as its financial performance lags behind competitors, prompting questions about the leadership of Chief Executive Officer Robert Isom. The carrier’s struggles, compounded by recent operational difficulties including disruptions caused by winter storms, have fueled discontent among both pilot and flight attendant unions, and raised concerns about the airline’s turnaround strategy.
American reported a profit of $111 million for the past year, a figure dwarfed by the $5 billion earned by Delta Air Lines and the more than $3.3 billion posted by United Airlines, despite similar capacity flown by all three carriers. This disparity has translated into significantly lower profit-sharing for American’s more than 130,000 employees, exacerbating existing frustrations.
The Allied Pilots Association (APA) wrote to the airline’s board late Friday, seeking a meeting to discuss the carrier’s financial and operational challenges. The union’s letter expressed concern that American Airlines is “on an underperforming path” and has “failed to define an identity or a strategy to correct course,” calling for “leaders who are willing, equipped, and empowered to get the house in order.” Isom responded Saturday, stating his alignment with the board’s desire to strengthen the airline and agreeing to meet as soon as possible.
The current challenges come as American Airlines attempts a significant overhaul of its business model, focusing on expanding premium offerings – larger top-tier cabins and enhanced services – to generate higher revenue. This strategy mirrors a broader trend within the industry, as airlines seek to capitalize on demand for more comfortable and exclusive travel experiences. However, American’s efforts appear to be lagging behind those of its rivals.
Isom, who became CEO in , has emphasized the need for substantial change. Addressing employees this week, he stated, “2026 can’t just feel different. It has to be different.
” He acknowledged the disappointing profit-sharing figures, stating, “I know that We see a meager profit-sharing, a very small profit-sharing pool this year. Again, when you break even, that’s the kind of profit-sharing you have. I’m disappointed in that.
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Recent operational setbacks have further intensified the scrutiny on Isom’s leadership. The airline struggled to recover from major winter storms in late January, leaving crews stranded – in some cases, without adequate shelter near airports. This prompted criticism from union leaders, who accused the airline of mishandling the situation and failing to prioritize the well-being of its employees.
The situation is particularly sensitive in Chicago, a key hub for both American and United Airlines. United CEO Scott Kirby, who was previously fired from American Airlines in , has publicly challenged American’s position at O’Hare International Airport. United recently secured an agreement to acquire gates from Spirit Airlines, potentially strengthening its presence at the airport. A digital billboard erected by United in Chicago reportedly referenced American’s AAdvantage loyalty program with a pointed message about on-time performance and flight cancellations.
American Airlines’ difficulties extend beyond operational issues and weather-related disruptions. The airline is also grappling with a substantial debt burden of $32.6 billion, which analysts say poses a significant obstacle to realizing its full potential. The company’s forward price-to-earnings ratio of 37.5 reflects market skepticism about its near-term earnings prospects.
Despite these challenges, American Airlines remains optimistic about its prospects for . The airline issued an upbeat outlook in late January, citing record booking trends. Isom has also pointed to the fact that American’s flight attendant compensation is competitive with, and in some cases exceeds, that of United Airlines, where cabin crew are currently in contract negotiations.
The airline is investing in upgrades to its fleet and customer experience, including larger business-class cabins on wide-body aircraft, three-class configurations on new Airbus narrow-bodies, and expanded airport lounges. It is also enhancing its food and beverage offerings, introducing premium brands like Lavazza coffee and Champagne Bollinger. These efforts are aimed at attracting higher-paying customers and increasing revenue per passenger.
However, analysts caution that American Airlines faces a long and arduous path to recovery. Melius Research analyst Conor Cunningham noted that it took Delta Air Lines over a decade to cultivate its reputation for premium service, and that American’s turnaround will require sustained effort and execution. The success of American’s strategy hinges on its ability to close the margin gap with its competitors and establish a clear identity in a highly competitive market.
The airline’s recent history has been marked by setbacks, including a fatal collision between an American Airlines regional jet and an Army Black Hawk helicopter in January , which resulted in the deaths of all 67 people on board. The carrier was also impacted by the U.S. Government shutdown late last year.
While Southwest Airlines is also undergoing a transformation, including the introduction of assigned seating and baggage fees, its stock has outperformed American Airlines this year, rising more than 30 percent. Shares of United and Delta have also seen gains, increasing by more than 3 percent and 8 percent, respectively.
