United CEO Claims American Loses $1.1

United Airlines CEO Scott Kirby claims American Airlines lost $1.1 billion at Chicago O'Hare in the 12 months leading into the first quarter of 2026. The claim, reported by the blog One Mile at a Time, is backed by a new Claude AI-assisted analysis that attempts to quantify the losses.

Kirby suggests American will eventually be forced out of the airport by "economic gravity." American Airlines has denied the scale of these losses.

Kirby's Chicago Loss Number Keeps Growing

Late last year, Kirby said American was losing about $800 million annually at O'Hare. In February 2026, Deutsche Bank analyst Michael Linenberg estimated American's Chicago-linked revenue at just over $5 billion with a negative 9% to 10% operating margin, implying a $450 million to $500 million loss. Kirby has since increased his claimed figure to $1.1 billion.

Leaked American figures reportedly showed a roughly $70 million loss for the second quarter of 2025 after combining domestic and international results. Kirby has stated United earned about $500 million in Chicago in 2025 and would have earned roughly $600 million without new American capacity.

Analysis of Ticket Data and Modeled Costs

The Claude-assisted analysis begins with the federal government's Origin and Destination Survey (DB1B) from the second quarter of 2025. It examined 203,378 domestic markets beginning at Chicago O'Hare.

The data suggests United has a local pricing advantage. However, this survey only covers a 10% sample of tickets and excludes connecting passengers, award travel, cargo, and loyalty revenue. It was replaced by a new DB1C survey in July 2025.

The analysis then shifts to modeled figures, applying the local ticket yield to all occupied seats, including those not in the sample. It reports much higher revenue: $5.66 billion for United and $4.39 billion for American. The cost modeling uses Form 41 aircraft expense data, which omits many operational costs like passenger service, ground handling, and corporate administration.

The report finds United's margin advantage is 2.66 cents per seat-mile, with 80% coming from revenue difference and 20% from modeled cost difference. It then assumes United breaks even, assigning the same $2.8 billion in other expenses to American's smaller operation to create the billion-dollar loss figure. One Mile at a Time says this break-even assumption is what Kirby "essentially seems to be hinting at," though Kirby has publicly stated United is profitable in Chicago.

The Nature of American's Reported Losses

American Airlines CFO Devon May explained the airline's accounting in March 2026. He stated every American hub, including Chicago, covers its direct operating expenses and remains profitable after accounting for aircraft ownership, maintenance, and hub-specific fixed costs. Some hubs become unprofitable only after American allocates systemwide corporate overhead.

Kirby's claimed $1.1 billion loss effectively allocates American's systemwide costs to Chicago. Closing the hub would not eliminate these overhead costs for headquarters, technology, or sales; they would be redistributed to other hubs like Dallas, Charlotte, and Miami. American also argues the hub supports network connections and gives its AAdvantage loyalty program relevance in Chicago, which drives partner revenue.

American reported $6.2 billion in cash from co-brand and other partners in 2025. Estimates suggest Chicago could represent $170 million to $470 million of annual card-related cash, contributing roughly $55 million to $160 million after costs.

Deutsche Bank estimated United's Chicago operating margin at 5%, below its 9% system margin in 2025. United says its response to American's growth reduced Chicago profit from around $600 million.