Alaska Airlines Begs for Forgiveness After Today’s Devaluation, Might Do It Again

Overnight last night Alaska Airlines made no-notice changes to their Emirates award charts for business and first class travel, raising prices by as much as 100%.

Changes without notice are the worst thing a loyalty program can do — to their members, and to themselves. A loyalty program is an intertemporal proposition. They promise future benefits in exchange for business now. You spend years, even, working towards an award. That’s why any reputable program that wants to retain the trust of its members, and its own value proposition, gives significant advance notice when making changes that hurt its members or reduce the value of its points.

Since Alaska has sought to use its loyalty program as a way to differentiate itself from other airlines, this was especially surprising and jarring.

Alaska has now offered an explanation that boils down to:

  • It’s the fault of travel hackers
  • We offered too good a deal
  • We couldn’t give notice
  • But we won’t do it again if we can avoid it

First, they shift blame.

Alaska’s premium Emirates awards have long been known as an exceptionally good deal. With the rise of “travel-hacking,” intended to exploit Mileage Plan’s award routing rules, coupled with below-market award levels, our previous award levels were unsustainable. The new award levels enable Alaska to continue to offer Emirates Business Class and First Class as a redemption option.

If the problem was ‘travel hackers’ taking advantage of routing rules, the solution would have been to tighten the rules (perhaps not to allow more than two Emirates flight segments, or exclude certain ‘direct’ flights from redemption) rather than to massively increase the price of awards. 400,000 mile round trip first class awards weren’t necessary to accomplish the task. That’s unleashing a neutron bomb to break up a fight at a soccer match.

In any case, the number of people booking crazy routings was relatively small (I can’t imagine wanting to).

On the other hand, since Emirates awards have been widely available — 14 first class seats on their far-flung fleet of Airbus A380s — members found it easy to get awards to Europe, Asia, and Africa much of the time. That was costly to Alaska.

Furthermore, Alaska fed this by regularly running discount sales of their miles.

However the awards were reasonable, 200,000 mile roundtrips were hardly ‘an exceptionally good deal’ that was unsustainable. Meanwhile 400,000 mile roundtrips (or 300,000 mile roundtrips) aren’t ‘market price’. That’s more expensive than even United charges for international first class on partners.

They promise advance notice in the future… maybe

According to Alaska,

Our policy is to communicate significant program changes with at least 30 days’ notice when at all possible.

They don’t say they’ll give notice in the future — only when they consider it ‘possible’.

And only then 30 days’ notice, which may not even be enough to put extra spending on their Bank of America co-brand credit card to earn miles, or do online shopping to earn extra miles, to get a big enough balance to book what you’ve been saving for.

That’s why United and American have gave at least 3 months’ notice for their most recent major award chart changes. And even that’s hardly doing members a favor.

They will refund mileage purchases if you want.

If you bought miles in March they’ll refund those miles if you ask.

I’m not sure that by deflecting blame, and making such a weak promise about the future, they do themselves any favors retaining the trust of members. Are you persuaded to trust them going forward?

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. Everyone in this thread calling for regulation is an idiot. Regulation would most definitely result in fewer miles and points opportunities overall. What you are overlooking from your shortsighted viewpoint is that it’s precisely because airlines are free to do what they wish that we even have these programs.

    The best protection a consumer has is strong competitions between programs. Regulation will kill miles and points entirely.

    This one didn’t go your way. Deal with it. That type of thing comes with the territory. That’s part of a free market, the same free market which has given you all the amazing benefits which you enjoy from our hobby.

  2. I had been finding a gift for my father that is retiring next year and I came upon the Alaskan Air Miles hustle for Emirates 1st class. I’m not calling sour grapes, although I thought it was suspicious that Starwood was offering 35K points, Alaskan Air was offering 25K points, and Alaskan Air Miles had a 40% bonus at the same time. If it smells like a hustle…… I digress. Alaskan Air has every right to raise the prices of awards so to speak. They are a business and not a charity. I fully understand that so I am not mad they raised the award rate. What I find shady is that they offered all of these bonuses and THEN they raised the award rate without any notice. Who on here actually believes that there was no time to warn anyone they were going to do this? You are either naïve or stupid. If the change happened and there were no bonus miles to be sold, then I would actually believe that. Alaska Air played this out very poorly. That said, I did purchase the miles needed to fulfill their requirement and even though they almost doubled the award, you can essentially buy 2 first class tickets for less than the cost of one. That is still a pretty decent deal. Anyways, for the arrogant posters that is unhappy with us “poors” riding up with the rest of you, I will make sure I guzzle as much Dom and Hen Paradis as possible, take as many photos as possible, pinch the rears of the stewardesses, act like a complete rube, and hopefully pass gas and/or vomit in your private seat. Toodles.

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