Here’s New M.O.’s in-depth summary and analysis of the 3rd quarter 2025 reports from the major US carriers most relevant to corporate travel, American Airlines (AA), Delta Air Lines (DL), United Airlines (UA), and Southwest Airlines (WN).
Overview
- Delta extended its lead on revenue quality and margins, with record Q3 revenue and a 10.1% operating margin.
- United stayed profitable but saw total revenue per available seat mile (TRASM) down year over year despite lower unit costs; management flagged capacity/demand misalignment earlier in the quarter.
- American posted record Q3 revenue ($13.7B) but reported a net loss of $114M, as while revenue quality sits near United’s, costs are roughly 10% higher than UA.
- Southwest delivered record revenue (~ $6.95B) and adjusted earnings per share (EPS) of $0.11 but continue to struggle on revenue quality, bottom line net income, and operating margin.
In short
- Delta’s premium/corporate tilt is outpacing United’s leisure-heavy push
- United’s leisure focus and capacity expansion met demand resistance, highlighting a need to rebalance capacity and grow corporate volumes.
- American is pivoting back toward premium and indirect sales but needs stronger execution and enhanced corporate partnerships as they as they struggle to recapture corporate volumes.
- Southwest is adding corporate-friendly features yet still trails on product, network, and partnerships.
Don’t work with earnings reports all the time?
Check out our glossary of key airline earnings terms for non-experts, to help you make sense of this data!
Headline takeaways for managed travel
- Delta remains the most balanced performer. Strong premium/corporate mix lifted revenue quality (TRASM) and supported a 10.1% operating margin.
- United’s cost discipline wasn’t enough. Cost per available seat mile (CASM) and CASM-ex (excluding fuel and special items) fell year over year, but TRASM fell more, pressuring revenue quality.
- American is shifting gears. Record revenue but net income loss; management emphasized regaining and expanding indirect revenue and premium relevance heading into 2026.
- Southwest’s transformation (enhanced seating policy, unbundled fares, more corporate-friendly moves) shows early revenue traction, but revenue quality (TRASM) still lags the network carriers.
In short
- Capacity alignment matters. United flagged earlier misalignment; load factors: DL 86.0%, UA 84.4%, AA 86.0%, WN 79.8% (the only sub-80%).
- Expect winter schedule trims and rebalancing.
Airline comparison (Q3 2025)
| Metric | American (AA) | Delta (DL) | United (UA) | Southwest (WN) |
|---|---|---|---|---|
| Total Operating Revenue | $13.69 B | $16.67 B | $15.23 B | $6.95 B |
| Operating Income | $151 M | $1.684 B | $1.395 B | $35 M |
| Operating Margin | 1.1 % | 10.1 % | 9.2 % | 0.5 % |
| Net Income (GAAP) | -$114 M | $1.417 B | $949 M | $54 M |
| Earnings per Share (GAAP/Adj.) | $-0.17 | $2.18 | $2.90 | $0.10 (adj.) |
| Load Factor | 86.0 % | 86.0 % | 84.4 % | 79.8 % |
| TRASM (¢ / ASM) | 17.69 | 21.09 | 17.42 | 15.25 |
| PRASM (¢ / ASM) | 16.11 | 17.08 | 15.8 | 13.85 |
| CASM (¢ / ASM) | 17.48 | 18.96 | 15.82 | 15.17 |
| CASM-ex (¢ / ASM) | 13.91 | 13.35 | 12.15 | 12.24 |
| Average Fuel Cost ($ / gal) | 2.37 | 2.26 | 2.43 | 2.4 |
| Market Cap (Oct 24–25 2025) | $9.10 B | $39.80 B | $32.15 B | $16.65 B |
Revenue quality versus cost – a quick ROI lens
(TRASM – CASM, cents per ASM)
- Delta: +2.13 ¢ (21.09 – 18.96)
- United: +1.60 ¢ (17.42 – 15.82)
- American: +0.21 ¢ (17.69 – 17.48)
- Southwest: +0.08 ¢ (15.25 – 15.17)
In short
- Delta earns roughly 0.53 ¢ per ASM more than United on this simple spread.
- United outpaces American by about 1.39 ¢ per ASM.
What changed this quarter?
American Airlines
Record revenue alongside a Net Income loss; unit revenues improved through the quarter with premium outpacing main cabin. American says it has restored its share of indirect revenue and will now expand it beyond historical levels, aided by improved distribution. Messaging shifted toward revenue and relevance (premium push, lounges/Flagship Suite roll-out, co-brand momentum). Execution in 2026 and beyond is the watch-item.
Southwest Airlines
Record revenue and adjusted profit ($0.11); CASM-ex up roughly 2.5 % year over year and better than guide. Transformation (product unbundling, seating policy enhancements) continues; still a gap to network carriers on TRASM and partnership depth.
Delta Air Lines
Record September-quarter revenue; outlook calls for double-digit Q4 operating margin and solid adjusted EPS. Premium/corporate and loyalty remain lead drivers.
United Airlines
Revenue growth year over year, but TRASM declined; CASM and CASM-ex down, reflecting cost control; management telegraphed capacity/demand issues earlier, implying ongoing network re-tuning.
Practical takeaways for buyers
- Program value in 2026 RFPs will hinge on how each carrier balances premium yield versus capacity. Expect schedule trims and rebalances into winter, especially where Q3 load factors flagged softness.
- Corporate-friendly momentum: Delta is the benchmark; track whether American’s indirect-sales and premium reboot translate to higher TRASM and service reliability by Q1–Q2 2026.
- Southwest as an emerging option: Improvements help, but the TRASM gap and network/partner depth still limit parity with the Big 3 for complex programs.
