How Alaska Airlines Is Considering Changing Its Frequent Flyer Program

See comment from Alaska Airlines at the bottom of the piece.

Alaska Airlines is surveying potential changes to their program, including moving to revenue-based earning and offering elite tiers starting at just 5000 qualifying miles.

With Alaska’s renewed partnership with American Airlines and plan to join oneworld I’m expecting to see the Mileage Plan program devalued.

It’s hard to imagine American would have re-engaged on the partnership with Mileage Plan as rich as it is. The miles are worth more and the status is easier to earn (without a minimum spend requirement even) and mid-tier elites on Alaska will receive most of the privileges of mid-tier American Airlines elites even when flying American. (This is true even assuming that discount American Airlines fares earn less than one mile per mile flown when crediting to Alaska.)

While programs survey potential changes all of the time, and many of the potential ideas being surveyed never see the light of day, since it’s reasonable to expect to see changes to the program coming as a result of the American and oneworld partnership, changes that Mileage Plan is surveying now become especially interesting.

The survey described the current program and asked for feedback on it: how unique, how rewarding, whether it drives choice of airline (even if more expensive), whether it’s first choice program and one that you’d recommend. Survey recipients were also asked for open-ended feedback on likes and dislikes about the program.

There was one item worth noting in the current program description. The survey said ‘miles never expire’ (which is something JetBlue and Delta and more recently United and Southwest have done) without reference to requiring activity every 24 months as they actually do today. I assume this was a mistake, because the survey uses 24 month expiration versus no expiration as a feature they’re testing.

Then they tested three different versions of Mileage Plan.

  1. Redeem miles for low value stuff (think Delta). They tested redeeming miles for airline fees, inflight purchases, shopping, hotels, and experiences.

  2. Begin earning elite benefits after very little travel “Just 1 roundtrip can earn you benefits like drink vouchers or complimentary in-flight WiFi.” New lower elite tiers after 5000 and 10,000 qualifying miles. The first tier earns drinks and wifi, the second tier adds priority boarding.

  3. Replace miles with a rebate to spend with Alaska “No more confusing points or miles to track. It’s simple. Earn 5% back on every dollar you spend with Alaska Airlines, and use it toward flights, confirmed upgrades, fees, onboard product, lounge access, partner airlines, hotel stays, car rentals, merchandise and more.” Elites earn 10%, 15%, or 20% back in ‘Alaska cash’.

And they compared various program features against each other, presenting 5 different program ‘bundles’ with various combinations of the following features:

  • Revenue-based earn vs. miles flown interestingly they surveyed base earn at 6 points per dollar rather than 5 which many competitors offer.

  • Small value airline purchase redemptions vs. current travel options does adding in options for “In-Flight purchases (food, drinks, WiFi), Fees (bag fees, change fees, pet fees), Airport Lounge
    membership, Car Rentals, Merchandise” move the needle?

  • Miles and cash as an option.

  • Lower starting threshold for elite status versus current 20,000 mile minimum

  • No change fees versus $125 fee

  • No expiration of miles versus requiring activity every 2 years to keep an account active

I don’t know which of these features are under serious consideration, but it’s interesting at a time where they’re preparing for major change – full oneworld membership and partnership with American Airlines – that they’re also surveying a revenue-based program. One thing they notably did not include in the testing, however, was minimum spend for elite status.

(HT: To the reader who sent me screen shots of the full survey, whose name is distinguishing enough that I won’t mention it.)

Update: Ryan Butz, Managing Director, Guest Loyalty, at Alaska Airlines says this is just a standard survey and not to read too much into it,

Our Mileage Plan is highly regarded as one of the most generous programs in the industry. We want to keep it that way and frequently conduct customer research in an effort to make sure it remains as generous as possible for our members, and to ensure that the benefits provided are relevant and valuable. The survey this was pulled from is no different than similar research projects we’ve conducted over the past five years. This research is unrelated to the AA relationship announcement and frankly was initiated months before that came to fruition.

I still believe that (1) American was unhappy with the generosity of the Mileage Plan program and that was a point of friction for them in their earlier partnership, so (2) a cost of the renewed partnership and oneworld membership has to be some devaluation of Mileage Plan. However Butz suggests this survey wouldn’t tell us that.

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. This is what I (and others) was afraid of. Alaska has a great ff program. It is a competitive advantage. Don’t fu.. ah mess with it. That’s what DL AA and UA want.

  2. well this is certainly going to stir it up, if you go to FF Alaska Airlines there are pundit’s abound about these issues as well as where do current AS FF’s fall into the new scheme of things such as those of us that have MM status.

    Oh well time t start burning those miles

  3. This is all my fault. Contrary to very valid frequent flyer conventional wisdom, I recently bought some Alaska miles when the airline had a 50 percent bonus offer going. If I hadn’t done that, Alaska would not be on the cusp of devaluing.

    For similar reasons, you never want to get on the immigration, supermarket or any other line I’m in, as it will always prove to be the slowest.

    On the other hand, you do want to go on vacation to various destinations at the same time I go, since I usually get great weather.

    Anyway, my apologies to VFTW readers and other frequent flyers for the Alaska devaluation.

  4. It seems this is the end of Alaska MP as we know it
    I see a 100 k level
    Gold will be worthless with worse benefits and business class int award flights will nearly double in redemption costs
    We know American the dominant partner will force them to be nearly as crappy or offer the same poison they offer their customers in every regard
    It’s been a great 3 plus years with Alaska but I’m likely gone

  5. I see a merger in this future with AA….but what do I know….Im just a mere award traveler.

  6. As a 25 yr, UA refugee (1K, MM) I think that Alaska would be making a big mistake if they went revenue based.
    Currently they offer a good value proposition in light of the recent UAMP destruction.

    They have a chance to pick up many loyal transcon flyers like myself, who would continue to fly them BECAUSE THEY ARE DIFFERENT.

    You don’t have to squeeze every last penny out of your customers in order to be successful.

  7. Literally none of this information is true. You should really double check your facts…..

  8. OMG people. Quit the hysteria. As a domestic airline with short stage length flights and relatively compact network, it is absolutely not viable for them to go revenue based on qualification absent dramatically lower dollar qualification tiers.

    And, no, AA elites will not suddenly switch to try and qualify with AS. AS rewards elite miles in most common coach fares on partners at 25% and has a higher threshold for qualifications with flying in partners. That means that for somebody to qualify for OneWorld Ruby flying exclusively on American coach fares but crediting to Alaska will need to fly 100,000 butt-in-seat on AA.

    And nevermind that the upgrade and SWU benefits don’t translate when crediting to AS!

    USE COMMON SENSE!

  9. Also there’s already a way to get to OW elite status with low mileage thresholds, just credit to SriLanka! The tiers for Ruby/Sapphire/Emerald are 20/40/60!

  10. MP members who never fly Alaska due to geographic considerations, or who use purchased for cash miles on partner airlines awards would disappear overnight if proposal #3 (Replace miles with a rebate to spend with Alaska “) was adopted. As for changing elites T & C’s I couldn’t give a toss, but I recognise such matters are very close to Gary’s heart, always.

  11. I am in process of getting an alaska visa credit card..
    For milage and companion
    Ticket. Now i think i won’t activate it when it comes. From all the comments..it sounds like alaska points won’t be worth much.

  12. I see the writing on the wall—this program is going to go revenue based, massive devaluation and a ton of low-value redemptions. NO THANK YOU.

    I switched to Alaska from Delta/UA as a 100K+ per year flyer…..there seems to be no hiding from the monster of the US airlines’ ‘race to the bottom’….why can’t someone just be different and embrace a unique identity/business model? (seems to work great for Southwest). Any advice on where to credit my flights moving forward is very appreciated.

  13. One of the major reasons I fly Alaska Airlines (I have been Gold for the last 10 years) is because of their mileage program. If they change it, I easily have other options.

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