American Airlines CEO lays out his vision to close a more than $3 billion profit gap

FORT WORTH, Texas — American Airlines CEO Robert Isom has a math problem.

The carrier is flying about 6,500 flights per day this year — nearly an entire Alaska Airlines more worth of travel more than its closest competitor, according to Cirium — yet American's profit gap has grown. United Airlines brought in about $3 billion more than American last year, and U.S. profit leader Delta Air Lines made nearly $5 billion more.

In an exclusive interview with CNBC late last month, Isom said American and its nearly 140,000 employees want "to be best at everything that we do." He said that carrier's "long-range plan is certainly making up the margin gap," but he didn't put a timeline on that goal.

American's top executives at the carrier's headquarters late last month outlined new initiatives to CNBC: bigger, more luxe airport lounges, a new wide-body aircraft order, and fresh interiors for even more of its long-haul fleet to attract big spenders .

Isom described the carrier's identity as "a premium global airline with the largest footprint in North America."

American has more decisions it needs to make — and soon — to close the gap. Perhaps its biggest challenge is getting customers to shell out more to fly, something Delta and United zeroed in on years ago .

American has mastered running an efficient business but "what we will measure over time is: Are we closing this revenue gap and closing the unit revenue gap?" American CFO Devon May said.

The carrier's executives reiterated that American's plan rests on growing its ever-more important loyalty program, improving customers' experience, expanding its network and increasing higher-end revenue.

The airline is forecast to earn 64 cents a share this year, on an adjusted basis, which would be up almost 80% from last year, according to analyst estimates. It will give an updated forecast when it reports second-quarter results on Thursday.

United and Delta earlier this month reported bookings are still strong . The surge in fuel prices have both helped and hurt the industry this year: The sudden run-up in prices because of the Iran war took carriers off guard, though they're passing more of those costs along to travelers, and executives don't expect fares will drop much anytime soon.

Wall Street is optimistic American will continue to improve, expecting it to quadruple adjusted earnings in 2027 to $2.58 a share.

American is now remodeling cabins across the fleet and taking deliveries of new planes with interiors that feature new amenities and more premium seats. Executives have said they're considering but haven't decided on bringing back seatback screens to much of its narrow-body fleet, though American recently joined the ranks of airlines that are adding satellite Wi-Fi from SpaceX 's Starlink.

Customers who are willing to pay more for premium seats or other perks like lounge access have been a bright spot across the industry, and everyone from profit leader Delta to now- defunct budget carrier Spirit Airlines has tried to woo those travelers as airlines rush to get fancy, new seats — small but profitable real estate — in the air.

Isom told CNBC that work to refresh cabins will soon expand to American's Boeing 787-8 Dreamliners. Its revamped cabins on its largest planes, the 777-300ERs, could debut in the next few weeks. Each business-class, lie-flat seat can bring in close to $10,000 on some long-haul international routes compared with $2,000 or even much less for a seat in the back.

Keeping up high-touch service levels could be a challenge, the airline's flight attendant union said, as the 70-seat business class soon comes online. American has been phasing out planes with separate first and business classes.

"Now, as American introduces 70 Business Suites and markets a premium international experience, they're expecting a reduced number of Flight Attendants to deliver significantly more personalized service," Julie Hedrick, president of the Association of Professional Flight Attendants, said in a statement. (American reduced flight attendant staffing on those aircraft from 13 to 11 in 2020. Other carriers have made similar moves.) "The result will be longer service times and a customer experience that falls short of what passengers expect."

In another lure for premium travelers, Chief Customer Officer Heather Garboden told CNBC that American is going to build the biggest Admirals Club lounge in its network, at 37,000 square feet, at its sprawling Dallas Fort Worth International Airport hub in Terminal C.