Low cost equals small profits: How the big airlines are charging more and cashing in

The air travel industry has gone through a turbulent few years. The rise of budget airlines, combined with the covid-19 pandemic, has shaken up a vast, multi-billion dollar industry. Now there is evidence that the established brands are re-taking control.

After an industry shift towards low-cost options, a new report from the New York Times has found that the most profitable companies are those that have moved in a different direction. Delta Air Lines and United Airlines are the two most profitable airlines in the United States, generating most of the industry’s profits since 2022.

They have done so not by slashing prices and piling in more passengers, but by focusing instead on first class and business class options and loyalty programs.

Glen Hauenstein, Delta’s president, explained: “What’s changed over the last 10 or 15 years: The premium products used to be loss leaders and now they’re the highest-margin products — that’s really the headline."

Delta and United head in new direction

For the third quarter of 2025 Delta earned more than $1.4 billion, an 11% rise on the previous year. Similarly United brought in $949 million, proving that the premium options are still money-makers.

“What we’ve really proven is air travel is not a commodity,” said Scott Kirby, chief executive of United Airlines.

That dominance is also a consequence of an expansion in their networks, with Delta controlling more than 70% of all flights at major airports serving Atlanta, Detroit, Minneapolis and Salt Lake City. United has a majority of flights at airports serving Denver, Houston, New York, Washington and San Francisco.

Loyalty program earnings have also become a key source of revenue, often with little increase to company expenses. Delta and United were among the airlines who switched the ‘air miles’ offers to reward customers who spent the most, rather than those who flew the furthest.

NYT reports that airlines bring in billions of dollars from these programs each year. During the third quarter of 2025 Delta got $2 billion from American Express as part of the co-branded credit card which offers users benefits on travel expenses.

These frequent flier programs are becoming a major asset for airlines and related companies, giving access to a wealthy class of traveler. Companies like United and Delta are well-placed to leverage these relationships and they are taking full advantage.

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