Planes line up on the tarmac at LaGuardia Airport on November 10, 2025 in New York City.

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From Spirit Airlines’ fight for survival to American Airlines‘ planned glow-up, from new international routes and brand-new airport lounges to stingier frequent flyer policies, class divides in the sky will intensify in 2026.

Airlines went into 2025 upbeat: Delta Air Lines CEO Ed Bastian forecast a record year for the century-old carrier. But concerns about President Donald Trump’s trade war, skittish consumers and an oversupply of domestic seats brought U.S. airfare down and weighed on industry profits.

“It’s the airline version of the K-shaped economy. Monetize the top of the K and minimize the shortfall at the bottom,” said Robert Mann, who has worked at several airlines and is president of aviation consulting firm R.W. Mann & Co.

Now, the leaders of the country’s biggest airlines are putting even more focus on customers who will pay extra for their tickets in exchange for a little more space or other perks like earlier boarding and access to never-sufficient overhead bin space.

The view into American Airlines first-class cabin on a Boeing 737.

Leslie Josephs/CNBC

They still face continued problems, like a shortage of air traffic controllers and aging infrastructure. Despite billions of additional federal spending to fix some of the problems, major improvements will take years.

Mann said airlines need to do more to improve reliability. U.S. carriers had a 77% on-time rate, according to the Department of Transportation, which defines on-time as arrival within 15 minutes of the schedule.

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

Here’s how the next year is shaping up for the airline industry:

Winners take (almost) all

Through the first nine months of the year, Delta and United Airlines accounted for nearly all of U.S. airline profits.

It’s an industry divide that’s been brewing for years, further fueled by a surge in costs and shifting consumer tastes as wealthier travelers have increased their share of overall spending.

While the economy has been resilient for the most part, any weakening in 2026 could have an outsize effect on more price-sensitive consumers and, therefore, airlines that are more exposed to coach-class domestic travel, like lower-cost carriers.

Those airlines have been making moves of their own. JetBlue Airways, for example, has been shifting its focus to more profitable routes and premium seats. It plans to debut a domestic business class in mid-2026 with seats up at the front of the cabin that are roomier but not quite as elaborate as its top-tier lie-flat Mint suites.

Stable fares

Airfare will likely remain steady next year over 2025, according to an American Express Global Business Travel forecast in mid-November.

Demand has rebounded after dropping during a record-long government shutdown, but it’s not clear whether 2026 will be a blockbuster.

Southwest Airlines CEO Bob Jordan told CNBC in December that the “first quarter looks strong” but that “it’s hard to say,” whether it will be better than a year ago.

Read more CNBC airline news

Whither Spirit

Struggling budget travel icon Spirit Airlines is in its second bankruptcy in less than a year after a court-blocked acquisition by JetBlue, an engine grounding, a surge in costs and other problems, raising questions about its ability to survive.

Industry insiders and airline analysts have said the yellow-plane airline will have to make much bigger moves with this bankruptcy.

“We do not expect it to remain a standalone company this time next year, with a merger or Chapter 7 outcome likely to drive upside to our earnings forecast,” said a Raymond James note on Dec. 19.

Analysts expect that merger partner would be Frontier Airlines, the fellow budget airline that has attempted to combine with Spirit repeatedly since 2022, but it’s not clear whether the two sides will reach a deal. Spirit said earlier this month that it’s in “active negotiations” for a stand-alone reorganization or a transaction. Frontier and Spirit declined to comment further.

Southwest transformed

Southwest’s preparing for a major change in 2026. The airline’s decades-long cattle call will end on Jan. 27 when assigned seating begins.

It’s coming off a slew of changes it already put into place last year. It debuted extra legroom seats that command higher prices and started charging many customers to check bags for the first time, a service that brought in more than $7 billion for its U.S. rivals in 2024, the last full year of available data, according to the Transportation Department.

The carrier’s stock is the top gainer of U.S. passenger airlines. Southwest shares rose nearly 23% in 2025 compared with the NYSE Arca Airline Index’s 5% advance, and beat out profit leaders Delta and United as well as the broader market.

Investors have been bullish on the company’s transformation to a more traditional, segmented airline, which has been sped along by a stake from activist investor Elliott Investment Management.

American makeover

American is expanding its lounges and launching a fleet of Airbus 321XLR planes in 2026 as it aims to catch up in the luxury travel boom. Free inflight Wi-Fi is also coming for loyalty program members starting in January, American said last spring.

The airline already made more minor changes, like adding Lavazza coffee for all its passengers and Champagne Bollinger for its top-tier lounges and cabins, to uplift its brand as well, but it has a long path to reach Delta’s and United’s profitability.

American Airlines and Delta planes on the tarmac at LaGuardia Airport (LGA) in the Queens borough of New York, US, on Friday, Nov. 7, 2025.

Michael Nagle | Bloomberg | Getty Images

Just before Christmas, American also announced that it will no longer award customers on its no-frills basic economy tickets with frequent flyer miles, following a similar move by Delta several years ago.

American hasn’t yet announced changes to its elite status requirements for 2027, but the carrier is under pressure because Delta and United have said they will hold status thresholds steady.

The airline is also making some changes that aim to improve reliability, recently announcing it will increase so-called banks, or clusters of flights at its largest hub, Dallas Fort Worth International Airport, from nine to 13.

American also said it is testing out two electronic gates there, where passengers on narrow-body domestic flights scan their own boarding passes, in hopes of getting travelers on planes faster, and in September, it said it will remove bag sizers from gates.

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A Southwest Airlines Boeing 737 airplane arrives at Los Angeles International Airport from San Francisco on March 28, 2025 in Los Angeles, California.

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Southwest Airlines‘ profit fell 42% in the first nine months of the year compared with the same period in 2024. But its stock has been on a tear.

Shares of Southwest are up nearly 24% so far in 2025, more than any other U.S. passenger carrier. Industry profit leaders Delta Air Lines and United Airlines have risen about 17% each this year.

Southwest stock this week hit a 2½ year high. Analysts and investors have high hopes for the carrier next year, when it completes its planned transformation from a one-size-all-fits airline to one that looks more like its larger rivals.

“What’s helping Southwest’s stock is clearly the initiatives, not the [demand] environment, because if it was you’d see it in all the other stocks as well,” said Savanthi Syth, airline analyst at Raymond James.

Stock Chart IconStock chart icon

Southwest Airlines stock compared with the NYSE Arca Airline index

Starting Jan. 27, Southwest is ditching open seating and moving to assigned seats on its all-Boeing 737 fleet. The first rows of seats have extra legroom — for a fee. Seat prices vary, but, for example, a Baltimore to Las Vegas flight in early February showed the seats going for about $80 each way.

Southwest in October forecast that assigned seating and extra legroom seats could drive $1 billion in pretax earnings next year and $1.5 billion in pretax earnings in 2027.

“Because the assigned seating, the extra legroom, kicks in and there’s a lot of value in that, of course, [results are] going to be better year over year,” Southwest CEO Bob Jordan told CNBC on Dec. 10. “The bookings that we’re seeing reflect the business case for assigned seating and extra legroom.”

Barclays upgraded Southwest’s stock earlier this month, with transportation analyst Brandon Oglenski forecasting Southwest’s adjusted earnings will be above $4 per share next year and surpass $6 per share in 2027.

Read more CNBC airline news

The end of the cattle call boarding lineup comes months after the Dallas carrier got rid of another decades-old policy: two free checked bags for customers. It also started selling its first-ever no-frills basic economy fares.

Southwest, like other airlines, cut its profit forecast for 2025 after demand dipped early this year as President Donald Trump’s tariffs and cost cutting in Washington weighed on bookings. More recently, the government shutdown that ended last month hurt demand prompting Southwest to again lower its earnings outlook for the year.

Southwest typically provides its yearly outlook alongside the previous year’s earnings in late January.

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A Spirit Airlines Airbus A320 taxis at Los Angeles International Airport after arriving from Boston on September 1, 2024 in Los Angeles, California. 

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Spirit Airlines CEO Dave Davis on Wednesday braced staff for more job cuts and said the carrier plans to slash its schedule in November to reduce costs weeks after declaring its second bankruptcy in less than a year.

The airline is planning its November schedule and Davis told employees in a memo, which was reviewed by CNBC, that they will see a 25% cut in capacity over 2024 “as we optimize our network to focus on our strongest markets.”

The carrier’s capacity was down a similar degree from when it came out of bankruptcy in March through the end of June, and the new cuts point to how the airline is thinking about its near-term schedule as it seeks to reduce costs. The struggling discount carrier is in negotiations with vendors and aircraft lessors, and is evaluating its fleet size, as it tries to shrink itself to find more stable footing, Davis said.

“These evaluations will inevitably affect the size of our teams as we become a more efficient airline,” Davis wrote in his note to employees. “Unfortunately, these are the tough calls we must make to emerge stronger. We know this adds uncertainty, and we are committed to keeping you as these decisions are made.”

Read more CNBC airline news

When asked how many of its employees would be affected, Spirit told CNBC in an email: “We have engaged our labor unions to discuss the impacts of the network and fleet adjustments on our Team Members, and we will share more as these discussions progress.”

The airline has already announced furloughs and demotions of hundreds of pilots. Some flights attendants have already taken voluntary unpaid leaves of absence.

“Although management has not yet indicated they will seek to make changes to our [collective bargaining agreement], our bankruptcy attorneys working alongside our AFA legal department are prepared for any next steps management may take,” Spirit flight attendants’ union, the Association of Flight Attendants-CWA, told staff in on Wednesday. “Again, this bankruptcy will be much more difficult than the last one and we must be prepared to act to protect our interests as Flight Attendants.”

Davis said the company is also planning to meet with the airlines’ union leaders in the coming weeks. The airline has already announced furloughs and demotions of hundreds of pilots. Some flights attendants have already taken voluntary unpaid leaves of absence.

Spirit, known for its bright yellow planes, low fares and myriad fees, had been successful but high costs, shifting travel preferences and increased competition from larger rivals threw the airline off course. A failed acquisition by JetBlue Airways left the carrier on its own.

When Spirit emerged from bankruptcy in March, its leaders were hoping to find more stable financial footing. But the carrier avoided big changes in the process and instead focused on a deal with its bondholders, which exchanged almost $800 million in debt for equity, and it was greeted after bankruptcy with persistently higher costs and weaker-than-expected domestic travel demand.

It reported that it lost nearly $257 million since March 13, after it exited Chapter 11, through the end of June.

Earlier this month, Spirit announced flight cuts to 11 destinations and said it wouldn’t start a 12th as planned, while competitors like United Airlines, Frontier Airlines and JetBlue Airways have unveiled plans for new flights to try to win over Spirit customers.

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A Delta Airlines and American Airlines plane are seen at Ronald Reagan Washington National Airport in Arlington, Virginia, on July 1, 2023.

Stefani Reynolds | AFP | Getty Images

Airlines are cutting their first-quarter profit and sales estimates, warning that a weaker economic backdrop is weighing on travel demand.

Ahead of a JPMorgan industry conference, American Airlines on Tuesday said it expects to lose between 60 cents a share and 80 cents a share in the first three months of the year, a wider loss than the 20 cents to 40 cents a share it previously forecast. It said revenue would likely be flat on the year compared with a January estimate of a rise of as much as 5%.

American said in a securities filing that “the revenue environment has been weaker than initially expected due to the impact of Flight 5342 and softness in the domestic leisure segment, primarily in March,” referring to the deadly collision of one of its regional jets and an Army helicopter in Washington, D.C., in January.

Read more CNBC airline news

The forecast followed Delta Air Lines slashing its first-quarter estimates after the market closed Monday. Delta said its outlook was “impacted by the recent reduction in consumer and corporate confidence caused by increased macro uncertainty, driving softness in Domestic demand.”

In addition to leisure travel, carriers have said also noted a sharp decline in government travel since the start of the latest Trump administration and its policies like tariffs, government layoffs and other cost cuts.

“I think people are cautious and they’re pulling back a little bit on travel, not in an organized manner but just kind of waiting to see what’s going to transpire, whether it’s trade and tariff challenges or macroeconomic policy changes or just a little bit of the unsettledness of the market that we all see,” CEO Ed Bastian said at the JPMorgan conference.

United Airlines CEO Scott Kirby echoed that sentiment at the same conference.

“We have also seen weakness in the demand market,” Kirby said. Government travel is about 2% of United’s business, but other workers’ travel is also affected, like consultants and contractors, which account for another 2% to 3%.

“We’ve seen some bleed over to that into the domestic leisure market,” Kirby said.

One cost-saving measure: Kirby said United is retiring 21 aircraft early, airplanes that it would otherwise have to spend $100 million on to overhaul engines this year.

Both executives were more upbeat on longer-term trends and bright spots like long-haul international and premium travel demand.

Delta shares ended the day more than 7% lower. United shed 2% and American shares fell more than 8%.

Southwest Airlines also cut its unit revenue guidance, to up no more than 4%, down from a forecast of as much as 7% for the first quarter over last year. The carrier also announced on Tuesday an end to its “two bags fly free” policy to charge customers for checked luggage for the first time, starting in May. Its shares rose more than 8%.

JetBlue Airways shares ended 4% higher.

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