Why air class wars will intensify in 2026

From Spirit Airlines’ fight for survival to American airlinesWith the expected breakup, from new international routes and shiny new airport lounges to stingier loyalty policies, class divisions in the skies will intensify in 2026.

Airlines approached the year 2025 with optimism: Delta Airlines CEO Ed Bastian predicts a banner year for the century-old carrier. But concerns over President Donald Trump’s trade war, consumer skittishness and an oversupply of domestic seats have driven down U.S. airfares and weighed on industry profits.

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

Today, executives at the nation’s largest airlines are placing even greater emphasis 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-enough overhead compartment space.

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

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

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

Here’s what next year looks like for the airline industry:

During the first nine months of the year, Delta and United Airlines accounted for almost all of the profits of American airlines.

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

Even though the economy has been resilient for the most part, any weakening in 2026 could have an outsized effect on more price-sensitive consumers and, therefore, airlines more exposed to domestic coach class travel, such as low-cost carriers.

These airlines have taken their own measures. JetBlue Airwaysfor example, focused on more profitable routes and premium seats. It plans to launch a domestic business class in mid-2026 with seats at the front of the cabin that are roomier but not as elaborate as its premium reclining Mint Suites.

Airfares will likely remain stable next year through 2025, according to a forecast from American Express Global Business Travel released in mid-November.

Demand has rebounded after falling during a record-long government shutdown, but it’s unclear whether 2026 will be a blockbuster.

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

Troubled budget travel icon Spirit Airlines is in its second bankruptcy in less than a year after a blocked acquisition by JetBlue, a grounded engine, rising costs and other problems, raising questions about its ability to survive.

Industry experts and airline analysts said the yellow airline will have to take much greater action with this bankruptcy.

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

Analysts expect the merger partner to be Border Airlinesthe budget airline that has attempted to partner with Spirit several times since 2022, but it is unclear whether the two sides will reach an agreement. Spirit said earlier this month that it was in “active negotiations” for a standalone reorganization or transaction. Frontier and Spirit declined to comment further.

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

This follows a series of changes already implemented last year. It first introduced seats with more legroom and higher prices and began charging many customers to check bags, a service that brought in more than $7 billion for its U.S. rivals in 2024, the last full year of data available, according to the Transportation Department.

The carrier’s shares are the biggest gainers among U.S. airlines. Southwest shares are up nearly 23% in 2025 compared to the NYSE Arca Airline Index’s 5% advance, and have beaten earnings leaders Delta and United as well as the broader market.

Investors have been optimistic about the company’s transformation into a more traditional, segmented airline, which has been accelerated by a stake from activist investor Elliott Investment Management.

American is expanding its lounges and launching a fleet of Airbus 321XLR planes in 2026 in a bid to catch up with the luxury travel boom. Free onboard Wi-Fi will also be available to loyalty program members starting in January, American announced last spring.

The airline has already made smaller changes, like adding Lavazza coffee for all its passengers and Bollinger Champagne for its premium lounges and cabins, to also elevate its brand, but it still has a long way to go to reach the profitability of Delta and United.

Just before Christmas, American also announced it would no longer give frequent flyer miles to customers on its no-frills basic economy tickets, following a similar decision Delta made several years ago.

American has not yet announced any changes to its elite status requirements for 2027, but the carrier is under pressure as Delta and United have said they will keep status thresholds steady.

The airline is also making some changes aimed at improving reliability, recently announcing it would increase the number of so-called bank flights, or flight groups, at its largest hub, Dallas Fort Worth International Airport, from nine to 13.

American also said it was testing two electronic gates there, where passengers on narrow-body domestic flights scan their own boarding passes, hoping to get travelers on planes more quickly, and in September it announced it would remove bag sizers from the gates.