CHICAGO, July 31 (Reuters) - Demand for high-end travel

is booming, and U.S. carriers are in a rush to seize on it.

Airlines are adding more comfortable and bigger seats on

their planes to attract customers willing to pay more for a

better travel experience. Some airlines known for low-fare

models like Southwest ( LUV ), Spirit and Frontier

are even shifting away from their traditional business

models to woo them.

Airline executives say consumers have cut their spending on

goods in favor of experiences, with travel their topmost

priority after the COVID-19 pandemic. U.S. carriers are betting

that the travel boom is a multi-year phenomenon and are vying to

grab a bigger slice of the high-end market.

The effort is part of a broader industry strategy to find

high-margin revenue streams to offset rising labor and operating

costs. A survey in May by consulting firm Deloitte found more

travelers were ready to pay for a more comfortable flying

experience than a year ago.

"That segment of passengers is as strong as the industry has

ever seen it," Alaska Airline's Chief Financial Officer

Shane Tackett said in an interview.

Stronger demand for premium cabins helped Alaska post the

highest adjusted pre-tax margin among major carriers in the

second quarter. It also boosted earnings at Delta and

United Airlines.

Alaska has retrofitted its entire regional fleet this year

to add 400,000 premium seats. It now has plans to add 1.3

million premium seats a year to its mainline fleet.

The airline and its regional unit had 326 planes in their

fleet at the end of June.

Last year, Delta said all of its planes would have premium

seats. At United, premium seats per flight in North America are

estimated to increase by 75% by 2026 from 2019.

In all, premium seats at U.S. carriers are expected to

increase by 50% in 2026 from before the pandemic, said Xavier

Smith, director of research at market-research startup

AlphaSense.

There is, however, a risk of airlines becoming too

aggressive, resulting in a supply glut that hurts pricing power.

Airline earnings are already suffering due to excess supply of

seats in the domestic market.

Smith said carriers must introduce capacity slowly to

protect their pricing power.

The success of the premium strategy also depends on

reliability. Delta CEO Ed Bastian last year said it was the

central tenet of the airline's playbook to attract travelers

willing to pay for something other than just a seat.

But analysts say the Atlanta-based airline's recent flight

disruptions, following a global cyber outage, have dented its

premium brand image. Delta declined to comment.

Similarly, JetBlue's ( JBLU ) earnings are languishing

despite its premium offerings. Brett Snyder, an airline analyst

who runs the popular industry blog Cranky Flier, attributed it

to the New York-based carrier's operational challenges.

On Tuesday, JetBlue ( JBLU ) said operational reliability is a top

priority for its customers and an essential element of the

company's strategy to return to sustained profitability.

"If airlines think they can get away with running a poor

operation, they're mistaken," Snyder said.