American's Chicago O'Hare Losses Analyzed
An analysis of American Airlines' financial performance at Chicago O'Hare suggests significant losses, though United CEO Scott Kirby's claim of a $1
United Airlines CEO Scott Kirby claims American Airlines is losing around $1 billion per year at Chicago O'Hare Airport. He predicts American will eventually have to pull out of the competitive airport, according to a report from One Mile at a Time.
An analysis posted by an X user, bentboolean, used AI to examine the economic reality of the Chicago hub for both carriers. The research suggests Kirby's figure might be based on operating results but overlooks major revenue sources like loyalty programs.
The Financial Picture at O'Hare
The analysis compared domestic revenue and cost per air seat mile for the two airlines out of Chicago. It found United holds a significant advantage in revenue generation while also operating at a lower cost.
| Metric | United Airlines | American Airlines |
|---|---|---|
| Domestic Revenue per Air Seat Mile | 26.6 cents | 24.0 cents |
| Domestic Cost per Air Seat Mile | 11.19 cents | 11.73 cents |
Based on these figures, the annualized aircraft operating margin in Chicago was calculated at $2.82 billion for United and $1.84 billion for American. The report cautions this does not include expenses like gate rent, ground handling, or corporate overhead.
If United is assumed to be breaking even in Chicago, as Kirby has hinted, then American would indeed be incurring around $1 billion in annual losses based solely on these operating metrics.
The Loyalty Program Factor
The critical catch is that this analysis does not include ancillary fees, cargo revenue, or loyalty and co-brand credit card revenue. These are now major contributors to an airline's bottom line. The source notes that airlines often operate as loss leaders for their lucrative loyalty programs.
Therefore, while American's direct operating performance in Chicago appears weak, the overall financial impact of maintaining a hub there is likely less severe. The report speculates that after factoring in everything, especially loyalty program upside, American's actual annual loss in Chicago is probably in the hundreds of millions, not the ten-figure range claimed by Kirby.
A Challenging Competitive Landscape
The situation remains difficult for American. It faces lower revenue and higher direct operating costs than United at O'Hare. The source states that American currently has an inferior onboard product compared to its rival.
While American has announced positive changes, they will not be fully implemented until well into the 2030s. Meanwhile, United plans to have new narrowbody interiors and Starlink Wi-Fi on virtually all its planes by the end of 2027. The report questions how American can begin to improve its economics in such a fiercely competitive market where United shows no sign of yielding ground.
