Delta and United Dominate US Airline Profits With Cheaper Fares Across Classes
America has its “Big Four” airlines, but as far as Wall Street is concerned, two stand out: United Airlines and Delta. Together, they accounted for 85% of US airline profits in the first nine months of 2024 — $4.78B in net income. This dominance is fueled by a mix of unbundled fares and more affordable premium options.
- United reported a 21% year-over-year increase in basic economy bookings, spurred by competitive pricing made possible through unbundled fares aimed at competing with budget carriers like Spirit and Frontier.
- At the same time, both airlines have expanded premium seating while lowering fares for first, premium, and comfort class tickets — categories Delta says now make up the majority of its passenger revenue.
Sell out: Fifteen years ago, Delta’s first-class seats cost ~13x what coach tickets cost, with just 12% sold. Thanks to longer, wider planes, Delta has been able to add to their premium cabin — and sell seats for cheaper rather than leave them empty for frequent fliers. While this approach may concern status travelers, the resulting profits have delighted investors. Delta and United are among the top performers in the S&P 500 this year, with their stock prices up 138% and 57%, respectively.
