“The Eagle Falls”: American Airlines (AA Analysis Article #3)
How American Airlines Became a Victim of Its Own Strategic Failures and Government Dependency
I realize this is my third article on the fate of American Airlines, but the story keeps evolving as more data is uncovered.
People also keep relentlessly defending American Airlines, which is completely natural, but they need to learn to accept the unfortunate truth. I also hear—and see—a lot of defensive statements along the lines of, “Well, I took American, and it was fine.” Which is good for you, sincerely. However, anecdotal evidence does not make a well-reasoned argument against an airline’s failings.
A great deal of these contrarian statements also come from men, which has me thinking about a correlation between the status quo of American Airlines and male travel tendencies. But that is a different discussion for a different time.
To be clear, I am not telling anyone to stop flying American. I am simply encouraging travelers to make informed and knowledgeable choices by realizing the truth of the matter.
Let us start with a bit of good news: American Airlines generated approximately $50 billion in gross revenue in 2025. However, that is where the good news ends. Two-thirds of that revenue immediately went to creditors and bondholders.
For the past half-dozen years, American has paid a minimum of $2 billion USD in interest alone before any of its revenue reaches its own proverbial pockets. American Airlines was not, and currently is not, overly concerned about this. The federal government cannot afford to let American Airlines fail and will throw credit-backed loans, subsidies, bailouts, and more at the airline to keep it afloat.
Let me explain.
Charlotte Douglas International Airport is a perfect example. It is probably AAL’s most important hub, and part of the reason is that American contributes approximately 150,000 jobs to North Carolina’s economy. No matter who occupies the governor’s mansion, Republican or Democrat, they realize that AAL isn’t just another airline for the city of Charlotte or the state of North Carolina. It is essentially a necessary public service.
It would be more than a mere public relations nightmare to let American Airlines fail and file for bankruptcy. It would, in reality, be massive political suicide, echoing past the governor’s office, through the halls of Congress, up to the White House and the Supreme Court, to the point that no presidential administration of either party could survive AAL’s fall.
The 2018 beginning of Project Oasis did not help American Airlines, either. Oasis was its aircraft densification program. To my mind—and the minds of many others in the travel industry—this only encouraged its “Greyhound bus” image. While other legacy carriers, namely United and Delta, were focusing on expanding their premium travel offerings, American was moving in the opposite direction.
American took padding out of seats on its 737 MAX aircraft, which had just debuted, and Airbus A321 aircraft. It removed seatback in-flight entertainment screens and essentially crammed an additional 12 seats into its 737s and A321s, bringing the total to 172 seats on the 737s and 190 on the A321s.
The onboard experience was so poor that the doors of the front lavatories could actually bash into one another, as both aircraft featured parallel front lavatories. The minuscule sinks could also splash water onto passengers.
Adding insult to injury, American Airlines forced travel agencies that traditionally booked with the airline to use its new booking software instead of the systems agencies normally use.
Note: Brooke In The Air Travel was unaffected by this because we are not travel agents; we are a travel concierge service.
Agencies worked around this by simply refusing to book with American Airlines and routing their premium customers through United or Delta instead, depriving AAL of much-needed revenue.
Why American Airlines thought this would be a good business move, I have no idea. Essentially, the airline ceded huge amounts of gross revenue to its competitors and never changed this travel software policy.
These mounting deficiencies only helped alienate premium travelers, who quickly moved to United and Delta, airlines that were catering more aggressively to premium clientele.
Please keep in mind that the issues I have just mentioned all occurred before the pandemic hit in 2020.
American Airlines has now debuted new “premium” international suites, and the official verdict on their quality has yet to reach a consensus. However, we have a general collective hypothesis that this may be a case of too little, too late for its remaining long-haul aircraft.
Combined with the evidentiary support and reasoning I provided in my previous articles, The Fall of a Titan (see page 1 of my article list here) and A Strategic Miscalculation, American Airlines is circling the drain—but will never actually go down the drain itself, as state and federal governments will never let American Airlines perish.
United Airlines’ own Scott Kirby extended an olive branch, offering to merge the airlines to create a U.S.-based mega-airline that could compete with or outperform the Middle Eastern giants—Etihad, Emirates, and Qatar Airways—but American Airlines CEO Robert Isom flatly refused.
Whether one is a fan of American Airlines or not, seeing the airline continuously twist in the wind, so to speak, is cruel in itself. One must have empathy for a beast that needs, but will never receive, a merciful bullet to the head.
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