American Expected to Further Gut its Partnership With Alaska Airlines

JonNYC says that American and Alaska are going to further erode their partnership, though access to each others’ lounges should continue.

A year and a half ago Alaska Airlines and American gutted their partnership. I used to regularly credit my Alaska Airlines flights to American for both elite status earning and redeemable miles, and that’s no longer possible.

  • Reciprocal redemption wasn’t touched. You can use Alaska miles to fly American (when saver availability exists, cough) and American miles to fly Alaska.

  • They also continue to offer reciprocal lounge access, though American’s San Francisco lounge isn’t open to Alaska Airlines lounge members (Alaska acquired Virgin America, based in San Francisco, and that would mean a lot of customers in American’s Admirals Club there.)

  • However you can now only credit American Airlines codeshares operated by Alaska to the AAdvantage program. You can credit Alaska codeshares operated by American to Alaska’s Mileage Plan and also all American international flights.

Sources at Alaska at the time were unhappy with this development, and even bitter over what they described as American’s decision here.

Alaska wants customers to fly them domestically and stay with their partners internationally. With Delta building a Seattle hub (and Alaska refusing to become its vassal) they’ve lost their reach into SkyTeam.

However they continue to partner with airlines in oneworld like Qantas, Cathay Pacific, and British Airways and with independent carriers like Icelandair and Hainan Airlines. They’ve said they’ve looked at joining oneworld as a limited ‘connect carrier’.

It’s unclear what else may be changing – perhaps less codesharing, perhaps no longer being able to earn Alaska miles on American’s international flights.

Either way this makes little sense from an American Airlines standpoint. The airline has largely walked away from the New York market and has only a limited presence in the Bay Area and Pacific Northwest. It’s unclear why they’d want to reduce their relevance to Bay Area customers even further, as Delta builds up not just Seattle but a focus city in ex-American Airlines hub San Jose.

American generates its profit largely from credit card deals selling miles to banks. The two most important markets for credit card spend are perhaps… New York and the Bay Area.

In order to attract that spend the AAdvantage program needs to be relevant to consumers in these markets, offering them flights that take them where they want to go. American’s partner Barclays only signs up customers for their card inflight and without a substantial flight presence in these markets the upside to that partnership is limited.

So unless the airline has a secret plan to build up flying beyond just its hubs from San Francisco, San Jose, Portland, and Seattle — which I doubt, they just suspended Oakland – Dallas service after only a year and a half — they need to rely on a partner to help them to be meaningful to customers in this area of the country.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. Yet one more example — if ever one was needed — that Doug Parker doesn’t have a clue. AA used to be a truly great airline (emphasis on “used”), and in the face of increasing pressure from DL, one would *think* AA would respond aggressively. Instead, Parker sticks his tail between his legs and slinks off like a dog that *knows* she did a bad thing, and is feeling especially guilty.

    Apparently, AA’s “powers that be” understand that two wrongs don’t make a right, but they must believe that three do!

  2. NYC based flyer here… AAA really doesnt want me to fly their airline. I like redeeming on AA’s partners and would fly AA when possible, but theyre not competitive in NYC on most of my routes now, sAAver availability is nonexistant, and without a credit card transfer partner, its harder to use the program as much as I do with say United (Chase). Oneworld awards are easier to book with BA or Cathay.

  3. Have to wonder if AA’s entire Board of Directors are just zombies not to be concerned with the impact of reality-and history. Remember how PanAm learned it could not survive being focused just on international service; its grab of National was too late; also, ruined a good airline that National had been.

    Remember how Braniff thought the sun never set on DFW; where’s BI now?

    Wonder how many employees-and Board members-wish Horton was back as CEO..?

    Given choices, why would anybody fly AA these days? I for one am moving over to Delta with my first flight in August, ORD-LGA. Amazing how responsive DL to a booking in First.

  4. AA’s indifference to those markets will lead other hub-bound fliers choosing other airlines. If slots/gates are available at DFW I’d think it a good time for DL/UA to add a ton of service there 🙂 Pounce while AA gets stuck in the mud.

  5. I agree with @Robert

    AA is showing its soft underbelly. When faced with competition they retreat instead of leveraging their partners and capacity.

    I await the full-forced return of DL into DFW to take on the soft AA head-to-head. Increase DFW timings to major markets (ie DFW-NYC/SEA/SFO/LAX/JFK/DEN/BOS/etc.) and siphon off the most valuable traffic for AA-captive businesses in Dallas.

    Keep in mind that the DFW MSA is the largest MSA with a single carrier hub…

  6. I mean you’d have to literally be crazy to accrue AA miles if you’re based in the Bay Area. I still have a ton from US Airways promotions back when they were usable with Star Alliance. They’re not even the best option to fly to South Florida from the Bay Area…

    I challenge you to find a single nonstop SFO-JFK flight in coach on any day at the 12.5K level on AA’s website…

  7. @jon – I love it, attack the home base. AA might feel invincible at DFW but it wouldn’t take much to get AA’s attention. Question then would be how AA reacts to the competition at home. Hopefully this gets really fun!!!!

  8. AA wants to play from the Delta playbook when the play is cheap for AA. So no one should be surprised by AA deteriorating the ties with AS in a manner that should be reminiscent of what DL did with AS. The open question is how fast and how much AS does to keep its international partner network in the face of those international partners’ alliance ties.

    AA isn’t in a position with Oneworld to get even all of AS’s Oneworld partners to sever ties with AS — try as AA could by leveraging its government-backed transoceanic joint-ventures. But that is going to be AA tilting at windmills in a world where government-immunized, revenue-sharing joint ventures matter increasingly more than the alliance partnerships of Oneworld, SkyTeam and Star Alliance .

  9. @Jon:

    Southwest might point to Love Field and go “uh, well, you see…”.

    It’s a perfectly cromulent option for Dallas domestic service. Even business travelers are fine with WN. Just ask Gary… 😉

  10. @Mark.

    Right, and National was more of a north/south operation whereas PA needed east/west to feed their Atlantic and Pacific routes.
    Pan Am had some hopeless management.

  11. @eponymous

    Touche. And to your point, AA may actually be lucky to have WN as their chief competitor in the market. If I were DL, I’d be more concerned entering the DFW market against Southwest than AA. WN has more cards up its sleeves than AA, and has shown that they’ll fight tooth and nail for their interests – just like DL.

  12. I need to make a minor change to an existing award reservation. I just called the EXP line and was greeted with the recording: “All of our representatives are busy helping other customers. Rather than wait on hold, we can call you back when it’s your turn, between 34 minutes and 44 minutes.” Without status it must really suck to fly AA these days.

  13. Exactly why I gave up on AA after 7 consecutive years as EP. I live in SF and need to go to SEA and PDX frequently. AA made that impossible after its first round of gutting the AS relationship. New changes just reinforces why UA and AS get my business now.

  14. The only place where AA and Alaska have much head-to-head competition is LAX. Here in the Northwest, AA is an absolute afterthought. And anywhere outside of the West Coast, Alaska is an afterthought. Why these two airlines wouldn’t be moving tall mountains to deepen ties is beyond me — a partnership fills gaps that neither is likely to fill on their own. AA has to be smart enough to see that the combination of Alaska and Virgin America did NOT create a carrier that rivals American, Delta, United or Southwest.

    Even in secondary Alaska/Horizon cities like Boise or Spokane, all of the routes are either to Alaska hubs or to cities in the West. For example, Alaska flies to seven places from Boise — ALL in the Pacific time zone. A combination of those seven Alaska routes to areas in the West plus some AA hub routes into the Midwest or Texas would be compelling for people in Boise. As it is, both airlines fill niches but don’t offer a comprehensive solution. Starting in Boise and connecting in SEA or PDX for trips to the East Coast doesn’t make any sense when there are plenty of flights to SLC, DEN or MSP.

    And for what it’s worth, all of the Alaska flights that went to non-hubs from SLC have been cancelled. They are just flying to LAX, SEA, PDX, SJC and SAN from SLC now. That should surprise no one.

  15. @Boris +1. Toss in the US government reneging on promises to give Pan Am domestic routes when the PANAGRA routes were taken away, and things didn’t exactly start off on the right foot.

  16. Another good reason to dump AA. Being a stockholder, and not wanting to use that company’s services, says a lot about AA.

  17. Totally opposite of what I’d felt was coming with AA/AS…I thought they’d try and re-enstate the cuts forced by the DOJ and work closer together. It’s to AA’s advantage on the West Coast to do this but instead they go the opposite direction and become less relevant. Makes no sense…but from the comments above and their actions in NYC it seems par for the course for them.

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