How Alaska Airlines Mileage Plan just destroyed their own successful miles buying franchise – overnight!

Posted on April 1, 2016 by in Alaska Mileage Plan

MightyTravels 2016-04-01 at 5.05.32 PM

Alaska Airlines Mileage Plan has been one of the most aggressive in selling miles on a discount with the frequent sales. They have a boutique set of partners and offered redemptions that were very reasonable on most partners.

Several airline loyalty programs have discovered that selling miles can be a profitable business. Although nobody knows how much an airline pays another for an award redemption that assumption is that those are priced at 90% or more off the fares we are able to book. Since each loyalty program makes up pricing for an award themselves the disparities can be enormous.

Emirates Skywards has been devaluing quickly over the years and had/ has much more expensive redemptions than Alaska Airlines. This isn’t new and Alaska Airlines drove a successful franchise on it.

Alaska Mileage Plan is usually a joy to work with – the agents are knowledgeable and friendly and so far the program has played by the rules. It had built trust and without a doubt a wonderful cash flow from selling miles.

This all came to an end yesterday. The abrupt changes in an award chart are almost unprecedented. Something crazy must have happened at Alaska. Alaska Airlines posted a short Q&A on their own blog yesterday.

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.

This is the first time I hear an airline use the word ‘travel hacking’ on their website. Travel hacking isn’t exactly new and Emirates awards were truly some of the best out there but that has been true since they were introduced by Alaska years ago.

Why didn’t Mileage Plan give advance notice? How can I expect other awards to not change suddenly?

Given the dynamics of this particular award, we were unable to announce changes in advance. This approach doesn’t represent a new normal. Our policy is to communicate significant program changes with at least 30 days’ notice when at all possible.

To my surprise Alaska is staying the course – this seems ridiculous given how profitable the airline has been recently. They must realize that they have just killed their mile buying franchise for no reason. Nobody will trust Alaska to keep award level as they are between buying miles and a redemption a few days later.

I’m actually planning to use Cathay Pacific instead of Emirates (not a big deal for my plans) but would I ever recommend buying miles again – I really don’t know!

Alaska knows it is looking into law suits for customers who have bought miles recently – they do offer a refund.

What if I purchased miles intending to book Emirates Business or First Class before I had a chance to book at the previous award level?

If you purchased miles on or after March 1, 2016, you can contact our Customer Care team for a refund.

If you bought miles this year I would not hesitate to contact Alaska Airlines and request a refund even it was before the March 1st deadline.

About the author: Torsten is a serial entrepreneur who started almost a dozen ventures on four continents. Torsten's love for travel has brought him to 130+ countries and travel with most of the world's airlines. You can reach Torsten at [email protected]

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