Why airline class wars will intensify in 2026

From Spirit Airlines’ fight for survival american airlinesFrom new international flights and brand new airport lounges to stingier mileage policies, the class divide in the sky will become even more intense in 2026 with planned growth.

Airlines started 2025 on a high note. delta airlines CEO Ed Bastian predicted a record year for the 100-year-old airline. But concerns about President Donald Trump’s trade war, nervous consumers and an oversupply of domestic seats have depressed U.S. airfares and squeezed industry profits.

“This is aviation’s version of the K-shaped economy, where you monetize the top of the K-shape and minimize the shortfall at the bottom,” said Robert Mann, who has worked for several airlines and is president of aviation consulting firm RW Mann & Company.

Now, leaders at the nation’s largest airlines are focusing more on customers who pay extra for their tickets in exchange for a little more space, perks like early boarding and access to the never-enough overhead bins.

Problems persist, including a shortage of air traffic controllers and aging infrastructure. Despite billions of dollars in additional federal spending to solve some of the problems, significant improvements will take years.

Mann said airlines need to do more to improve reliability. According to the Department of Transportation, U.S. airlines have a 77% on-time arrival rate, with on-time being defined as arriving within 15 minutes of the scheduled time.

“When a flight is delayed or canceled, it doesn’t matter if you’re at the top of K or the bottom of K,” he says.

Here’s what the airline industry will look like next year.

Throughout the first nine months of the year, Delta Air Lines and united airlines It accounts for nearly all of the profits of U.S. airlines.

This is an industry divide that has been brewing for years, exacerbated by rising costs and changing consumer preferences as wealthy travelers account for an increasing share of overall spending.

While the economy remains largely resilient, a downturn in 2026 could have a significant impact on more price-sensitive consumers, namely airlines exposed to coach-class domestic travel such as low-cost carriers.

These airlines are making moves of their own. jet blue airlinesFor example, has shifted its focus to more profitable routes and premium seats. The airline plans to debut domestic business class in mid-2026, with seats at the front of the cabin that are less elaborate than the top-of-the-line lie-flat Mint Suite, but more spacious.

Airfares are likely to remain stable next year through 2025, according to a mid-November forecast from American Express Global Business Travel.

Demand has recovered after falling due to the record-long government shutdown, but it’s unclear whether it will become a big hit in 2026.

southwest airlines Chief Executive Officer Bob Jordan told CNBC in December that while the first quarter looked good, it was “hard to say” whether it would be better than a year ago.

Spirit Airlines, the struggling icon of budget travel, has fallen into bankruptcy for the second time in less than a year after a court blocked its acquisition by JetBlue, engine outages, soaring costs and other problems, raising questions about its viability.

Industry insiders and aviation analysts say the bankruptcy will force Yellow Plane Airlines to take even bigger action.

“We do not expect the company to remain an independent company this time next year, and the outcome of the merger or Chapter 7 is likely to result in an upward revision to our earnings expectations,” Raymond James said in a Dec. 19 memo.

Analysts expect the merger partner to be: frontier airlinesthe same low-cost airline, has repeatedly attempted to merge with Spirit since 2022, but it’s not clear whether the two sides will reach an agreement. Spirit said earlier this month that it was in “active negotiations” toward a standalone reorganization or transaction. Frontier and Spirit declined further comment.

Southwest Airlines is preparing for a major transformation in 2026. The airline’s decades-old cattle call ends on January 27, when seat reservations begin.

This reflects a number of changes already introduced last year. The company introduced more expensive seats with extra legroom and began charging many customers for bag checks for the first time. The service generated more than $7 billion for U.S. rivals in 2024, the last full year for which data is available, according to the Department of Transportation.

The company’s stock price has increased the most among U.S. passenger airlines. Southwest stock has risen nearly 23% in 2025, compared with a 5% rise in the NYSE Arca Airline Stock Index, outperforming profit leaders Delta Air Lines and United Airlines, as well as the broader market.

Investors are bullish on the airline’s transformation into a more traditional, fragmented airline, with an investment from activist investor Elliott Investment Management.

American Airlines plans to expand its lounges and introduce Airbus 321XLR aircraft in 2026 as it looks to keep up with the luxury travel boom. Last spring, American Airlines announced that free in-flight Wi-Fi would be available to loyalty program members starting in January.

The airline has already made more subtle changes to boost its brand, such as adding Lavazza coffee to all passengers and Champagne Bollinger in its top-tier lounges and cabins, but it has a long way to go to reach Delta and United’s profitability.

Just before Christmas, American Airlines also announced it would no longer award frequent flyer miles to customers on no-frills basic economy tickets, following a similar move by Delta Air Lines several years ago.

American Airlines has not yet announced changes to its elite status requirements for 2027, but the airline is under pressure after Delta Air Lines and United Airlines said they would keep their status thresholds constant.

The airline has also made several changes aimed at improving reliability, recently announcing it would increase the number of so-called bank, or cluster, flights at Dallas-Fort Worth International Airport, its largest hub, from nine to 13.

American Airlines also said it was testing two electronic gates where passengers on narrow-body domestic flights scan their boarding passes in hopes of getting travelers on planes faster, and announced it would remove baggage sizers from gates in September.