American Airlines is trying to climb back into the premium club it once took for granted, and the strategy starts at the very front of the cabin. The carrier is rolling out a sweeping upgrade of its high-end product – from lie-flat suites and privacy doors to Bollinger champagne, Lavazza coffee and ultra-fast Wi-Fi – in a bid to close the gap with rivals Delta Air Lines and United Airlines, which have pulled ahead on both profits and passenger satisfaction.

Executives have branded the push a full-scale “customer reimagination” effort. In practice, that means redirecting focus away from a decade of cost-cutting and volume growth toward a more curated experience for travelers who are willing to pay for comfort. The plan leans on upgraded long-haul cabins, refreshed regional interiors and a richer loyalty and co-branded credit card ecosystem designed to keep high-value flyers inside the American Airlines orbit.

The urgency is obvious in the numbers. While Delta and United have enjoyed strong profitability this year, American has stumbled. Its shares are down roughly 6% year to date, even as Delta is up about 20% and United around 18%, and short interest in American stock is markedly higher than at its peers. In the third quarter – typically the strongest for U.S. airlines – American posted a loss, while its two main rivals generated solid profits. Over the first nine months of the year, the airline managed just $12 million in net income, compared with $3.8 billion at Delta and $2.3 billion at United.

With premium travelers driving a disproportionate share of industry margins, staying in the middle of the pack is no longer tenable. Upgrading cabins, food and beverage, and on-the-ground services has shifted from a nice-to-have to a strategic requirement. As newly appointed Chief Commercial Officer Nat Piper put it in an interview with Reuters, the bet is that sustained investment in the customer experience can finally move the revenue needle in a meaningful way.

A premium push built around new aircraft

At the heart of the initiative is a new generation of long-range aircraft. American is counting on the Boeing 787-9 and Airbus A321XLR to open up new routes and capture higher-yield traffic on existing ones. The 787-9, now configured with 51 lie-flat seats behind privacy doors, has quickly become the airline’s most profitable widebody. It is already deployed on competitive transatlantic routes like Chicago-London, where United has historically been strong.

The next showcase is the Airbus A321XLR, slated to debut on the fiercely contested New York-Los Angeles corridor. That route has long been a proving ground for U.S. premium products and a stronghold for Delta’s coastal strategy. American’s single-aisle A321XLR is being pitched as its first true international-style three-class configuration on a narrowbody, complete with lie-flat suites and upgraded soft products.

Once initial U.S. deployments are bedded in, American plans to push the A321XLR across the Atlantic, especially on secondary markets like Edinburgh, where its fuel efficiency and range can make thinner routes economically viable. Chief Strategy Officer Steve Johnson has characterized the overall overhaul as the airline’s most dramatic product reset in decades and has tied it directly to expected revenue gains beginning in 2026.

Structural challenges and delayed upgrades

Turning a legacy network carrier around is never just a matter of swapping out seats. Analysts tracking the industry expect American’s transition to be both slow and expensive. Supply-chain bottlenecks have already delayed deliveries of key aircraft types, including the A321XLR, which was originally slated to arrive in 2023.

The carrier is also behind schedule on retrofitting older Boeing 777 jets with new premium cabins because of shortages in seating and interior components. The first 777-300 has only just entered conversion in Hong Kong. To avoid further delays, American has opted to use an already-certified seat design rather than attempt fresh modifications, senior network planning executive Brian Znotins told Reuters.

Operational reliability remains a weak point. On-time performance still trails Delta and United, and recent J.D. Power rankings placed American near the bottom of the major carriers for overall satisfaction. Financial projections tell a similar story: analysts see American’s EBITDA margin improving from about 7.3% this year to roughly 9% in 2026, still far below the roughly 15% and 14% expected at Delta and United, respectively, based on LSEG estimates.

As Henry Harteveldt of Atmosphere Research framed it, this is not an airline that will pivot on a dime. Years of decisions that prioritized short-term savings and capacity growth over durable premium positioning have left American with a steeper climb.

How American fell behind

American’s leadership points to a combination of external pressures and structural disadvantages. CEO Robert Isom and his team highlight higher labor costs from new union contracts and an outsized dependence on a sluggish U.S. domestic market as key headwinds. Johnson has also drawn attention to setbacks that slowed the airline’s post-pandemic recovery, including delayed widebody deliveries, a blocked New York expansion and a region-wide pilot shortage that constrained growth.

Analysts and industry veterans counter that many of the airline’s problems have been self-inflicted. Efforts to cut distribution costs by alienating travel agencies undermined corporate sales relationships just as competitors doubled down on managed travel. The chase after low-cost carriers in the domestic market led to years of underinvestment in premium cabins and lounges, eroding the brand’s appeal to high-spend travelers. A series of poorly timed fleet retirements shrank the pool of widebody aircraft available just as long-haul demand rebounded.

On top of that, aggressive stock buybacks under former CEO Doug Parker left American with elevated debt levels, restricting flexibility at precisely the moment when rivals were modernizing their fleets and networks. Pullbacks from key coastal hubs like New York and Los Angeles weakened its competitive posture in markets that matter most to business travelers.

Course correction and labor tensions

The current leadership team is trying to rebuild from the ground up. American has restored more competitive base fares for agencies and corporate partners, launched outreach to win back business accounts, and poured money into technology aimed at reducing irregular operations. A new Chief Customer Officer role, supported by an advisory board stacked with hospitality veterans, is meant to ensure product decisions reflect a coherent premium strategy rather than piecemeal fixes.

The airline is also reshaping its balance sheet around loyalty economics. An exclusive credit card partnership with Citi, due to take effect next year, is expected to generate a steady stream of high-margin revenue through the sale of loyalty miles. Capital spending is set to rise as the carrier invests in new aircraft, cabin retrofits, and upgraded lounges that match the promise of its front-cabin seats.

Inside the company, however, patience is fraying. American’s major unions have formed a coalition that accuses management of weak leadership, eroding morale and a failure to share the gains of the recovery. In their message to members after the latest quarterly results, union leaders said it was “time for accountability at the highest levels.”

Profit-sharing payouts illustrate the divide. Pilots at American are projected to receive just 0.6% this year, compared with 10% at Delta and 7.6% at United, based on figures in a union memo. For frontline workers who have absorbed years of operational stress and schedule disruption, that gap is a stark signal that the turnaround remains more aspiration than reality.

During an October town hall, Isom acknowledged the stakes in blunt terms. American needs to deliver for employees, customers and shareholders, he told staff, but none of that is sustainable without consistent profitability — a reminder that the premium revamp is not just about champagne and suites, but about whether the carrier can finally rebuild a business model that works for everyone on board.

In that sense, the upgrades now rolling out on the Boeing 787-9, the A321XLR and across American’s network are more than a cosmetic refresh. They are a test of whether a legacy giant that once set the standard for U.S. air travel can reinvent itself in an era where premium flyers have more choice – and higher expectations – than ever.