Delta has spent 20 years building the most successful U.S. airline, which makes it the most successful airline in the world. But it seems like they’re uniquely vulnerable – in a position where they could soon be toppled.
They’ve positioned themselves as the premium airline, but they aren’t as good at the basics as they used to be, they aren’t all that premium, and it’s a space where they increasingly have competition.
Let’s start with the littlest things. They will soon have the worst coffee.
- Alaska Airlines, which beats them at their Seattle hub, serves Stumptown
- United Airlines, which competes directly in the New York and Los Angeles markets and is the second-most profitable and has positioned themselves as the ‘other’ premium airline, serves Illy
- American Airlines, an also-ran since being taken over by US Airways management, is rolling out Lavazza.
- While Delta serves Starbucks. It’s a mass-market product, not a premium one.
Meanwhile champagne. They upgraded to Taittinger but it’s the worst choice amongst competitors for actually serving in the air. American now partners with Bollinger which is the most robust, and works best at altitude and in the dry cabin air. United’s Laurent-Perrier works well, it’s clean and consistently pleasant. But Taittinger is all about finesse. It is bright and elegant, but too light inflight. It’s underwhelming at altitude and won’t hold up to most food that’s served.
These may seem like minor items, and they are, but they’re symptomatic of a Delta that’s all about marketing trumping substance. Taittinger is a good, well-known champagne but it isn’t the right choice for inflight. It’s hiring Tom Brady to throw a football around with CEO Ed Bastian, and calling it leadership. It’s renting The Sphere to announce a partnership with DraftKings that wasn’t even inked yet. I pointed out at the time that most of what they could do was likely illegal. Over a year later that partnership still has not launched.
The airline hasn’t been the same operationally since COO Gil West left during the pandemic. They’re losing President Glen Hauenstein, who was the architect of the carrier’s success post-Richard Anderson. They remain under the leadership of a CEO who bailed for Paris while his airline was melting down from the CrowdStrike outage.
Delta is no longer ‘the on-time machine’. There are months where they’re somewhat more reliable than others. They melt down more than they used to. They never approach their pre-pandemic heights back when Gil West ran operations.
Delta’s product is mid. Their 767s are miserable. Their long haul food isn’t great or even as good as American’s.
Their lounges are better than American’s and United’s. And their people are largely happier to be at work. They still have a strong culture, a function of their profits (which mean top pay) and being non-union (so they don’t get stuck working with low performers and slackers who can’t be fired).
Although Delta’s more recent hire flight attendants aren’t nearly as good, and it’s this group that creates the window for AFA-CWA organizing that holds the potential to undo much of the airline’s remaining advantages.
They have assets – a strong balance sheet, strong control of many of their partners through ownership stakes, and great slot and gate portfolios. They benefited enormously from Costco ditching American Express over a decade ago, which gave them an opportunity to rewrite their card deal to give Amex certainty of keeping them while giving them top of industry economics. They built a brand that created a halo, helped drive card adoption and spend, and that they’re now living off of.
Richard Anderson and Glen Hauenstein built one of the best airlines in the world, they cut very shrewd deals – With Doug Parker for New York slots, with Amex, and with airline partners across both the Atlantic and Pacific. But there’s probably little further upside in Delta. They don’t seem to get better than they are today, and they may be getting worse.
Today, while Delta is the most profitable airline, United Airlines actually earns more money flying.
- The difference in profits is more than accounted for by incrementally greater revenue from American Express at self-reported ~ 40% margin.
- Layer in the MRO business – Delta’s maintenance, repair and overhaul business selling services to other carriers – and the difference becomes even starker.
Whomever buys JetBlue will have a real platform to compete on card spend against Delta-American Express, and to grow in South Florida, too. If United builds out JFK through JetBlue and becomes the preferred carrier for New York card spend, then once they negotiate their next deal with Chase with competitive economics starting in 2029 – holding everything else equal – they zoom past Delta.
Tim, that’s a backhanded compliment, a threat, and bait… all wrapped in a single title… oof.
It seems like Gary has got into the business of trolling Tim.
One Mile at a Time had a similar article a few days ago.
One industry after the other is being acquired by PE or heavily influenced by Wall Street. Elliott is doing a number of SWA. Big three CEO’s are always at risk of losing their jobs due to stock prices or activists. Customers and service come, at best, second to short term ROI. It used to be great customer service produced ROI and in the long run, it is the only thing that does. However, in the short run, ROI is increased by cutting expenses (customer service). Good luck to the airline industry.
the brand of coffee or champagne simply won’t matter in 2026 or for quite some time into the future. The airline industry moves from one crisis to another; the difference is how short the recovery period was after covid before this crisis started.
Fuel price matters the most this year and DL is by far in the best position of any airline in the world because of their refinery which is uniquely designed to limit increase if fuel prices because of the jet fuel crack spread which is exactly the problem afflicting the industry.
UA came out of covid w/ a growth plan that required everything to line up perfectly for them to succeed – and yet, not only has the FAA stepped in 3 times to limit flights in UA hubs but UA’s labor costs are rising faster than the rest of the industry – because UA’s growth plan has been built on lower cost labor.
and now fuel prices will soar and UA will have no choice but to cut capacity in the face of reduced demand amid higher prices.
Get back w us not just after the next earnings period (which starts next week) but at the end of 2026 and into 2027.
UA’s story of rainbows and unicorns and DL’s supposed vulnerability WILL look very different than far too many people see it today.
Every coffee brand mentioned across the airlines listed in this article is mass market and none of them, but for Stumptown, are genuinely good coffees. Illy and Lavazza are not premium brands. They are household brands in Italy.
United is making bold moves, it narrowed the profitability gap with Delta, but it is not quite there yet.
Delta though has a few things that could cost it the crown. It’s brand shouts premium, but it doesn’t look premium enough. If anything, it is all upsell and it shows. The Delta One product is a hodge-podge of seats and apart from the A339 and A359s, not uniform and quite sub-par.
American? Good luck.
I really don’t want to get political, but I question the lengths Delta will go to for revenue. AP reported that the ICE “bunny hat” child Liam and his father, Adrian Conejo Arias, were escorted onto the same Delta flight from Minneapolis to Texas. Airport video described by AP showed them together, accompanied by plain-clothed federal escorts. When “outed” I understand that Delta made fuzzy references to third party bookings. Surely they know who is on their planes.
Every play in the business is somehow opportunistic but in the long run it’s still about what’s REALLY delivered.
In this case, no one is really leagues ahead in the competition of US airlines. Apparently the gap is way smaller between Delta and United versus Delta and AA / United and AA but none of them seems unfixable within 5-10 years.
Delta apparently is the best on Delta One ground service, domestic first service, NYC/LAX coverage, CBP at midwest hubs, and public relations. On the other hand it’s also the worst in many ways: consistency in Delta One hard product (bUt ThEy WiLl Be GoNe By 2O30!), alliance, tipping, value of miles, Delta One Lounge availability by the airline you fly/consistency of quality among hubs, generosity towards top published tier……
I am glad to see there’re competitors quashing DL’s greed in extracting consumers and I am also looking forward to seeing AA getting back to the race. At least for now, I believe UA to delivering what people really need for an international airline the most, even if there’s not much of halo comparing to DL.
except, Larry, the earnings gap between DL and UA WIDENED between 2024 and 2025.
and that gap will very likely widen even further in 2026 as DL gains a $1 billion fuel cost advantage on top of the “catchup” that UA has to play in labor costs.
Some people will argue that they don’t want to hear about profitability or financial metrics when discussing airlines – or other consumer companies – but you need only look at AA to see the effect of low earnings on a company. AA has not been able to invest in its business and its product has suffered; they are trying to play catch up but I suspect their budget for upgrading their product will be hurt.
The earnings gap between DL and UA could grow from $1.7 to more than $3 billion this year; that is a whole lot of money that DL has to grow its network and roll out product upgrades that UA simply will not be able to do.
Remember that UA also has massive capex in 2026 and beyond that is larger than even they planned because of Boeing delivery delays; Boeing compensated UA and is now delivering those planes faster than UA originally planned – or will when Boeing deliveries return to normal – which could happen this year or next.
Having massive capex on top of rising costs and the inability to grow capacity because of high costs and reduced demand is a huge threat to UA’s growth plan; it checks just about everything that could go wrong – and it is happening all at the same time.
Bloggers love to throw out inflammatory content to stimulate discussion. I will say with certainty that this supposed “dethronement of DL by UA” that has been rabidly discussed is not coming in 2026 or 2027 and perhaps never will.
There is a real good chance that DL will use this crisis to grow further into major strategic markets including in Asia which is UA’s only real strategic advantage; the arrival of the A350-1000s couldn’t be better timed for DL to use its growing profit advantage.
Wow Gary that is a ballsy argument! Kudos for your editorial courage. And to your credit:
…you support your argument with specific reasons
…if anyone can elevate United, it’s Scott Kirby
…Delta can’t slack off, even for a moment
Isn’t competition a wonderful thing?!
@DaveSoCal — If it deals with people and resources, it’s inherently political. Maybe you meant ‘partisan’ or that you didn’t want to upset anyone. Naw, speak your mind, debate if you wish, and even if we disagree it’s nice for others to share their thoughts. Thanks.
Is there really that much of a difference between the US3? Sure, UA and DL are operationally better than AA but not by leaps and bounds. It’s not like UA is serving surf and turf in domestic first while AA is serving sliders. Isn’t more a function of hub optimization, the correct fleet and first mover on certain routes?
@Tim – I don’t choose the airline I fly based on how much profit it makes, I choose it based on how good the champagne is, how good the coffee is, where it flies, its lounges, its seats/hard product, its food etc. etc. I don’t pick it because it has an oil refinery.
That is the giant flaw in your logic.
UA has improved in many areas, they are headed in the right direction. They still need to elevate their catering, and the United Clubs are behind the competition. Admirals clubs for example seem to beat UA clubs in every airport.
Delta just hasn’t recovered since the pandemic. They were among the last to bring back real meals, etc. They never brought back hot towels and plated meals in economy, like they had before the pandemic. They let their best customer service agents go during the worst of the pandemic, which caused massive problems after travel fully recovered. Remember those epic wait times? United is the only major US airline trying to get better. Delta is just phoning it in.
It won’t be long before UA becomes the premier carrier in NYC. The merger with B6 should be wrapped by 12/31/2028. Can’t wait!
About champagne ( and as a Frenchie), which Taittinger are you talking about, Gary??
@Gene, it already is the premier carrier in NYC – it carries more pax, offers more premium seats, it is winning already.