The airline industry is set for major changes in 2026, with Spirit Airlines facing bankruptcy and the potential for a merger with Frontier Airlines. Meanwhile, Southwest Airlines will introduce assigned seating, and American Airlines is expanding its luxury offerings and tweaking its frequent flyer policies. Delta and United Airlines continue to dominate the market, with American Airlines aiming to catch up.

Concerns about President Trump’s trade war, oversupply of domestic seats, and skittish consumers have impacted U.S. airfare and industry profits. Airlines are focusing on customers willing to pay extra for perks like more space and earlier boarding. Despite federal spending to improve infrastructure, airlines still face challenges with air traffic controllers and reliability.

Delta and United Airlines have accounted for nearly all U.S. airline profits in 2025, with a growing divide in the industry as wealthier travelers increase their spending share. Southwest Airlines is transitioning to assigned seating and making changes to drive profitability. American Airlines is expanding its luxury offerings and making adjustments to its frequent flyer policies.

Struggling Spirit Airlines faces a second bankruptcy, raising questions about its survival. Analysts predict a merger with Frontier Airlines or a Chapter 7 outcome. Southwest Airlines is set to introduce assigned seating in 2026, following other changes to drive profitability. American Airlines is expanding its luxury offerings and tweaking frequent flyer policies.

American Airlines is expanding its luxury offerings and launching new Airbus 321XLR planes in 2026, aiming to catch up in the luxury travel sector. The airline is also offering free inflight Wi-Fi for loyalty program members. Changes to frequent flyer policies and improvements in reliability are on the horizon for American Airlines.

Read more at CNBC: Why airline class wars will intensify in 2026