Why airline class wars will escalate in 2026

From Spirit Airlines' fight for survival to american airlines', from new international routes and new airport lounges to stingier frequent flyer policies, class divisions in the sky will intensify in 2026.

Airlines began the year 2025 optimistic: Delta Airlines CEO Ed Bastian predicted a record year for the century-old airline. But concerns about President Donald Trump's trade war, nervous consumers and an oversupply of domestic seats drove down prices for U.S. flights and hit industry profits.

“It's the airline version of the K-shaped economy. 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.

Now, leaders of the nation's largest airlines are paying even more attention to customers who will pay more for their tickets in exchange for a little more space or other benefits such as earlier boarding and access to overhead bin space that is never enough.

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

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

“When the flight is delayed 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 what next year is shaping up 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 a split in the industry that has been brewing for years, fueled further by rising costs and changing 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 a huge effect on the most price-sensitive consumers and therefore on airlines that are most exposed to domestic economy travel, such as lower-cost airlines.

Those airlines have been taking their own measures. JetBlue AirwaysFor example, it has been shifting its focus toward more profitable routes and premium seats. It plans to introduce a domestic business class in mid-2026 with seats at the front of the cabin that are more spacious but not as elaborate as its premium lie-flat Mint suites.

Airline tickets are likely to remain stable next year through 2025, according to a mid-November forecast from American Express Global Business Travel.

Demand has recovered 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 looks strong” but that “it's hard to say” whether it will be better than a year ago.

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 shutdown, rising costs and other problems, raising questions about its ability to survive.

Industry experts and airline analysts have said that the yellow plane airline will have to take much bigger steps with this bankruptcy.

“We do not expect it to remain an independent company this time next year, and a merger or Chapter 7 outcome will likely drive our earnings forecast higher,” a Dec. 19 Raymond James note said.

Analysts expect the merger partner to be Border AirlinesThe low-cost airline has tried to combine with Spirit repeatedly since 2022, but it is unclear whether the two sides will reach a deal. Spirit said earlier this month that it is in “active negotiations” for a stand-alone 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 tour will end on Jan. 27, when seat assignments begin.

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

The airline's stock is the biggest gainer among U.S. passenger airlines. Southwest shares are up nearly 23% in 2025 compared with the NYSE Arca Airline Index's 5% gain, outperforming 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 aircraft in 2026, aiming to catch up with the rise in luxury travel. American said last spring that there will also be free onboard Wi-Fi for loyalty program members starting in January.

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

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

American has yet to announce changes to its elite status requirements for 2027, but the airline is under pressure because Delta and United have said they will keep status thresholds stable.

The airline is also making some changes aimed at improving reliability and recently announced it will increase so-called banks or flight groups at its largest hub, Dallas Fort Worth International Airport, from nine to 13.

American also said it is testing two electronic gates there, where passengers on narrow-body domestic flights scan their own boarding passes, hoping to get travelers onto planes faster, and in September said it will remove bag meters from the gates.