The true US legacy rivalry might only be just between Delta & United Airlines

For most of the past decade, Delta Air Lines has been the unquestioned leader in the commercial aviation industry. The carrier has been the first to innovate in key areas, has drastically reshaped the definition of a successful airline loyalty program through its valuable partnership with American Express, and has consistently boasted the industry's best financial returns.

For the majority of the past ten years, American Airlines and United Airlines, the carrier's two most important rivals, have mostly been playing catch-up.

However, in 2024, this has all changed quite drastically. In the years following the C.O.V.I.D.-.1.9 pandemic, the airline industry has changed drastically, and the airlines that exist in the US market today look very different from those that dominated the industry just a decade ago.

In the most crucial air markets, those where multiple legacy carriers have been forced to directly compete with one another, Delta and United have consistently come out on top, with American Airlines slowly falling behind.

American's struggles are related to both the airline's relatively weak product offering and somewhat inefficient route network, and both Delta and United have capitalized on their main competitors' biggest weaknesses to slowly emerge as the industry's two most important players.

In 2024, both Delta and United saw their stock prices rise toward near-record highs, with some even using their performance as evidence that airline investing can be profitable.

United and Delta both have big plans for 2025

Both Delta and United have been quick to forecast impressive earnings for 2025, and both have been quick to directly address the other as their principal competition.

With both of these carriers' stocks at record-high levels, many in the industry have begun to see the commercial aviation industry as a two-horse race, with both Delta and United vying for the top spot while American mostly sits outside the picture.

There is no question that the hierarchy that existed within the commercial aviation industry since the era of headline mergers that came directly after the global financial crisis has been altered significantly.

In 2025, Delta and United are undeniably in competition to capture the largest shares in key markets, attract the most high-spending customers, and continue developing brands that are synonymous with a comfortable passenger experience.

In this article, we will take a look at the new most important global airline rivalry, and what we might expect to see from Delta and United in the next year as they both seek out record-breaking profits.

A deeper look at the state of the airline industry today

To understand why the airline industry today has just two players vying for market dominance, it is important to look at the current competitive dynamics within the industry.

For starters, Atlanta-based Delta Air Lines had one of its best years on record in 2024. The carrier returned profits of over 70% to investors, with shares trading at just around $40 last January to over $68 today, making it one of the most profitable years for a major airline stock in recent memory.

This performance was mostly bolstered by additional revenue generated in premium cabins, and through the carrier's lucrative partnership with American Express.

Under most circumstances, you would likely expect me to say here that Delta Air Lines was the best-performing airline of 2024 on the stock market.

However, it was not. United Airlines provided returns of over 150% to investors last year, something virtually unheard of for a large airline with stable finances. The carrier's stock traded at around $40 at the start of the year, but shares today currently trade at over $100, making it one of the best-performing stocks not just within the airline industry, but on the entire stock market as a whole.

The company's growth has mostly been driven by revenue increases in premium cabins and the launch of new routes to off-the-beaten-path destinations.

American Airlines, by contrast, has not seen the same financial success. The carrier's stock did return profits to investors, rising in value by about 20% throughout the year.

When one considers the aviation industry as a whole had an average return of over 60%, according to Yahoo Finance, American's performance seems even worse.

Furthermore, of these three carriers, American was the only one to finish the year without a "Strong Buy" rating from major market analysts.

As a result, it is not hard to see why most analysts have begun to discuss a new race to the top emerging between United and Delta, with American sitting in a distant third.

Competitive performance in key markets

As legacy airlines, Delta, American, and United all drive a significant portion of their revenue from business travelers, a market segment that is make-or-break for these carriers.

Therefore, analyzing their performance in key markets is an excellent way of gauging an airline's relative success. Furthermore, by looking at the most competitive airports, one can get a better sense of who can attract more passengers.

Thus, we can put together a better picture of what carriers are pulling ahead and which ones might be falling behind.

The first and most important airport here to look at is undoubtedly Los Angeles International Airport (LAX), which has the fascinating distinction of being the only US airport that is a hub for all three legacy carriers.

The important thing to note about LAX is that, while both United and Delta have secondary West Coast hubs (at San Francisco (SFO) and Seattle (SEA) respectively), the facility is American's most important transpacific gateway (although it does operate some transpacific flights from Dallas/Fort Worth (DFW) and Chicago-O'Hare (ORD). Despite this, the market share breakdown at the airport looks like this:

Even in a market where it is most important for American to establish its presence, it is being beaten by Delta and has roughly the same market share as United.

This is even more fascinating as, while Delta funnels a massive portion of its transpacific traffic through Los Angeles, United's LAX operations are significantly smaller than they are at San Francisco International Airport.

American Airlines has been pushed back so far from the LAX market that it serves Seoul Incheon Airport (ICN) from Dallas, but not the far more logical gateway of Los Angeles, demonstrating the airline's inability to compete with United and Delta.

In other key markets, the same story holds. Every time American goes toe-to-toe with either United or Delta, it tends to lose market share. At John F. Kennedy International Airport (JFK), American Airlines has a market share of just 12.8%, lagging behind the nearly 30% Delta controls.

At Chicago-O'Hare, the story is the same. American Airlines controls just about 22% of the market, less than half of the 40% that United does, according to statistics published by the Department of Transportation.

Across the board, Delta and United are emerging as market leaders. At the same time, American has to again and again settle for second place, except in its hub markets where it faces no competition.

So what's the bottom line when it comes to Delta and United?

Delta and United have seen the most post-pandemic success, with 2024 emerging as a crucial year for both carriers. Now, these carriers are set to face off in 2025 in a race to generate the industry's highest profits.

American Airlines has been placed on the defensive and is currently defending the footholds that it has in key markets while being less expansion-oriented.

The same, however, cannot be said for Delta and United, both of which have huge plans for 2025. Flush with cash, both can continue to invest in their route networks, fleets, and loyalty programs.

United Airlines is likely in pursuit of the most aggressive route expansion, by adding flights to many non-traditional destinations. Delta, by contrast, is mostly focusing on its loyalty program and finding new ways to generate revenue in premium cabins.