United Airlines’ growth strategy is all about selling customers a better version of what they already buy

Good morning. Phil Wahba writing from New York this morning. If it seems like airfares keep climbing—but you keep paying anyway—that’s all part of the plan, at least at United Airlines. There, CEO Scott Kirby has been working on a long-term “premiumization” of the airline’s offerings, and his playbook is relevant to any CEO looking to squeeze more margin out of the same customer base by selling them a better version of what they already buy. 

“Demand is strong,” Kirby told Wall Street analysts on a conference call last Thursday. “United has proven that our brand loyalty strategy is working, and we’re using today’s environment to accelerate our investments in all aspects of the customer experience from nose to tail.” 

Industry-wide, prices for domestic routes are up 35% this year, and international fares are up 15%. But this isn’t just a reaction to higher fuel prices—it’s a strategy that has been years in the making. 

As I wrote for UnHerd recently, major carriers, most notably and successfully United and Delta Air Lines, have spent years persuading customers to pay more for tickets by investing in much improved services. The two airlines have built their businesses around higher-spending travelers, international networks, and lucrative loyalty programs. 

The goal is to have passengers see air travel not as a commodity so much as a quasi-luxury experience. That has meant adding premium seats, offering access to snazzier lounges, free upgrades, and baggage fee waivers. (Major U.S. airlines have also reduced capacity and cut flights, helping their pricing power.) Revenue from United’s high-end seats was up 16% in the most recent quarter versus a year ago, compared to basic economy revenue growth of 11%. A similar narrative is playing out at Delta, where premium revenue grew 17%, outpacing overall growth. 

And the two airlines are engaged in an arms race to convince travelers they offer the most deluxe flying experience. Delta, for instance, is testing planes in which the majority of seats are premium, while United touted plans to offer Wi-Fi supported by Elon Musk’s Starlink on 1,000 of its planes by year-end. (Delta has opted to go with Amazon’s satellite service, telling UnHerd that its mix of entertainment and shopping options made it the more attractive partner.)

And the tinkering with offerings continues. In March, United said it was swapping more economy seats for premium seats in some planes. Last week, it announced it would roll out a new row in its “economy plus” area in which the middle seat is always empty, replaced by a shared table for the aisle- and window-seat travelers. It is reminiscent of British Airways’ short-haul business-class layout, which blocks out the middle seat, and is another example of airlines establishing more distinctions between cabins.

Investors clearly like the news—United’s stock has been on an upwards march from around $47 at this time two years ago to $119 at the close yesterday. The lesson for other CEOs eyeing their own margins: commodity businesses have more pricing power than they think, if they can convince customers to buy the upgrade instead of the seat.

Contact CEO Daily via Diane Brady at

Hugging Face said an autonomous AI agent attacked its systems and that it turned to Chinese startup Z.ai's GLM 5.2 to fight back after a U.S. model's guardrails blocked its own security team's analysis. The company said U.S. models "can't distinguish an incident responder from an attacker," fueling debate over whether safety rules hurt U.S. competitiveness.

Cuban argues that sharing equity is the most effective way to reduce wealth inequality and told the What It Takes podcast that every CEO or founder should give equity to all employees the way he did. He proposed letting companies keep a lower corporate tax rate if they give every employee the same ratio of stock to cash compensation that executives receive.

Under pressure by analysts to justify its eye-popping valuation, SpaceX is diversifying beyond rockets and satellites to a seemingly innocuous but lucrative business opportunity: renting out the unused computing capacity from its Colossus data center complex.

S&P 500 futures are up 0.52% this morning. The last session closed down 0.19%. The STOXX Europe 600 was up 0.37% in early trading. The U.K.’s FTSE 100 was up 0.17% in early trading. Japan’s Nikkei 225 was up 3.26%. South Korea’s KOSPI was up 3.56%. China’s CSI 300 was up 3.06%. Hong Kong’s Hang Seng was down 0.04%. India’s NIFTY 50 was down 0.21%. Bitcoin was up at $66K.

LaLiga president says tech is already making the fan experience better, and it could solve football’s money problem too by Catherina Gioino

The Treasury is walking a tightrope on U.S. debt by relying so much on short-term rates that are at the mercy of a suddenly very hawkish Fed by Jason Ma

Christopher Nolan was rejected from film school as a teen. Today, the Oscar-winning director behind  ‘The Odyssey’ is worth $250 million by Preston Fore

‘I want to die broke’: Billionaire philanthropist Denny Sanford dies after giving away $4 billion by Sydney Lake

CEO Daily is curated and edited by Joseph Abrams, Jason Ma, Claire Zillman, and Lee Clifford.