Last week, Alaska Airlines made two significant announcements. First, the airline will be making changes to its upgrade policies and procedures. And second, it will be rolling out a premium economy product worthy of the “premium” designation.
The announcements were newsworthy not because they nudged Alaska ahead of the competition – they didn’t – but because they put the airline in conformity with the competition. And not just tactically, but strategically as well. In particular, both moves are revenue-focused: The new upgrade policies make revenue a key factor in awarding upgrades; and the new service is designed to generate incremental revenue. Both moves are in keeping with those of American, Delta, and United.
Related:Delta’s Premium Economy, Coming in 2017. The Real Deal?
There’s nothing inherently controversial or portentous about matching the competition. In most cases, it’s taken for granted; it’s business as usual. But in Alaska’s case, the moves could be early indicators that Alaska plans to overhaul its Mileage Plan loyalty program, converting its current mileage-based scheme to a spend-based scheme, as the Big Three have done. And that would be a big deal for Alaska’s customers. A big, bad deal.
As the last remaining U.S. airline loyalty program that awards miles on the basis of flown miles, Alaska’s Mileage Plan has been widely recognized as the most generous of the major programs. It’s one of the airline’s key marketing assets. It gives Alaska a competitive advantage over American, Delta, and United, whose programs have been revamped to richly reward road warriors at the expense of the other 99 percent.
In December of 2104, Alaska reassured its customers that there were no plans to change Mileage Plan:
That was then. Since making that reassuring statement, Alaska has been on the receiving end of almost two years of Wall Street pressure to increase profits. And the airlines’ acquisition of Virgin America has created even more such scrutiny and financial pressure. An obvious response to that pressure would be to convert Mileage Plan to a spend-based scheme.
Will Alaska succumb to Wall Street’s imperative? The airline has been mum on the subject lately, so there are few tea leaves to read. But, again, the latest moves by Alaska, while hardly definitive, are certainly consistent with a change to a program that disproportionately rewards the company’s most profitable customers.
The great majority of Mileage Plan members can only wait and watch and hope for the best.
More from SmarterTravel: Earn JetBlue Points for Lyft Rides U.S. Airlines Upgrade Business Class. Which Is Best? Do We Need Kids-Free Seating on U.S. Airlines?
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Frequent travelers have likely experienced a dreaded check-in process that included a long line to visit the check-in kiosk. Even worse is finally getting to the kiosk, only to have the system freeze or crash. Alaska Airlines wants to change that by removing the check-in kiosk altogether and adding new technology.
In 2014, at the behest of Rep. Alan Grayson (D-Fla.), the DOT’s Office of Inspector General began an audit of U.S. frequent flyer programs, and the DOT’s monitoring thereof, with a particular focus on unfair and deceptive practices (summary, with a link to the full .pdf report, here). The audit results were published this month, with the following headline: “Improvements needed in DOT’s process for identifying unfair or deceptive practices in airline frequent flyer programs.”
For most of the 35 years since American Airlines’ AAdvantage program made its debut in 1981, U.S. travel-rewards programs have measured loyalty in miles. Fly 1,000 miles, earn 1,000 miles. Earn 25,000 miles and redeem them for a free domestic coach ticket.
Alaska Airlines is justly lauded for its Mileage Plan loyalty program, which among other features boasts 17 airline partners, allowing program members to earn and redeem miles for flights throughout the world.
Ever since Delta began ramping up operations in Seattle, Alaska Airlines’ hometown and main flight hub, the relationship between the two airlines has been disintegrating. And there was plenty to disintegrate. The carriers were long-time partners in each other’s frequent-flyer programs, and they code-shared on a host of flights. They were, in the industry vernacular, preferred marketing partners.
OAG, which dubs itself an “air travel intelligence company,” has released its top-10 rankings of the most and least punctual airlines in 2016. The group analyzed 54 million flight records using full-year data from 2016 to compile the list, and for the purposes of the study defined “on-time” as “a flight that arrives or departs within 14 minutes and 59 seconds (under 15 minutes) of its scheduled arrival/departure time.”
Wi-Fi access isn’t free on Alaska Airlines flights. But at least for the next year, the airline’s passengers can use inflight Wi-Fi to send and receive unlimited texts for free.
By traditional measures, Alaska Airlines is a carrier of decidedly modest size, even after its acquisition of Virgin America. Its own flight network is small, compared to those of American, Delta, and United. And it’s not a member of one of the three global airline alliances.
I recently dubbed Alaska Airlines’ loyalty program, Mileage Plan, the “Best Mileage Program for Average Travelers.” It’s a hard-won honor, awarded for two principal reasons. First, Alaska has chosen to retain Mileage Plan’s distance-based earning scheme, even as most other airlines have adopted less generous spend-based earning. And second, Alaska has cobbled together a roster of earning and redemption partners that rivals those of the world’s largest airlines.
The Washington Post reports that U.S. carriers will ask president-elect Donald Trump to protect them from unfair competition with heavily subsidized Persian Gulf carriers. The three big U.S. airlines—Delta, United, and American—”have unsuccessfully lobbied the Obama administration to take up their cause against a trio of Gulf airlines who have grown exponentially, making inroads in the global market,” according to the Post.
Warren Buffet is famous for being one of the world’s savviest investors, earning billions for himself, and plenty for his stockholders as well. As chief of the Berkshire Hathaway conglomerate, he’s been accorded the honorary title of the Oracle of Omaha.