Airlines are making a miraculous recovery by doubling down on premium seats

Delta, for its part, said its premium cabins generated $5.3 billion in revenue compared to $6.3 billion for the economy cabin despite being just a fraction of the tickets sold.

Not all airline recovery is created equal. While United and Delta’s stock prices have risen 81% and 34%, respectively, this year, American’s has fallen 5%.

American’s lag is due, in part, to a failed corporate strategy that pushed away high-paying customers and resulted in the firing of its chief commercial officer, Vasu Raja.

“We have taken aggressive action to reset our sales and distribution strategy and reengage the business travel community, which we’re confident will improve our revenue performance over time,” American CEO Robert Isom said in Thursday’s earnings release.

Premium seats allow airlines to charge a premium

The legacy carriers’ renewed attention to their premium offerings is also due, in part, to their acknowledgment of an overall shift in customer expectations.

It’s a much-welcome change as airlines have scrambled to compensate for the unsustainably cheap economy seats from revenue-starved low-cost carriers, which have dragged down their earnings this year.

On the budget side, Frontier Airlines and Spirit Airlines have yet to score a profit since 2019 and are making drastic changes to their historic bare-bones strategy. Frontier in March announced “business-class-like” seats that would leave the middle seat blocked, while Spirit revealed bigger and more spacious seat options in July.

JetBlue Airways recently announced lounges would be built for its Mint business class, and Southwest Airlines plans to upsell seats with more legroom — ditching its previous egalitarian model.