Alaska Mileage Plan Will Go Revenue Based (Read Post For Update)

Update: The article has been updated to indicate that this was a misprint, and that Alaska isn’t changing their frequent flyer program. Only time will tell for how long that lasts.

The “big three” US carriers now all have revenue based frequent flyer programs (American’s will kick in as of August 1, 2016), which is to say that they award redeemable miles based on how much you spend with the airline, rather than how much you fly with them (though you still earn elite qualifying miles based on distance flown rather than how much you spend).

Alaska’s Mileage Plan program has always been extremely lucrative, and the airline’s management has even gone so far as to say that they like having a traditional system, and view it as a point of differentiation.

Alaska-Rebrand
Alaska 737 in the airline’s new livery

Per Brian Sumers, in the past few months Alaska’s CFO and CEO have both spoken in support of the current system of their frequent flyer program:

“We like where we’re at,” CFO Brandon Pedersen said at the JPMorgan Aviation, Transportation & Industrials Conference. “We’re sticking with the traditional model. It gives us an opportunity to look at how we perform versus how others perform. And we wouldn’t say that we would never go to that, certainly.”

CEO Brad Tilden suggested Alaska may try to advertise its program as a competitive advantage, similar to what Southwest Airlines has done with checked bags. You’ve probably seen Southwest’s “bags fly free” campaign.

“It is a lot like Southwest with bag fees,” Tilden said. “We could argue about its merits five years ago. Today, it’s very differentiated from what the other guys offer. So I think its value actually has gone up.”

As most of you probably know, Alaska is taking over Virgin America, which leaves a lot of unanswered questions about the future of their frequent flyer program.

Alaska-Virgin-America-Merger

On one this isn’t a merger, but rather a takeover. That’s to say that the Virgin America brand is being almost entirely folded into the Alaska brand, so very little of Virgin America will remain.

At the same time, Virgin America has a revenue based frequent flyer program, while Alaska has a traditional frequent flyer program, with the former definitely quickly becoming the industry standard.

While it has long been said that Mileage Plan won’t go revenue based, it looks like they’ve had a change of heart. The JuneauEmpire reports on a meeting that Alaska Senior Vice President, Joe Sprague, had with the Juneau Chamber of Commerce, where he says that Alaska Mileage Plan will go revenue based. Here’s the relevant quote:

Sprague also announced Thursday that Alaska Airlines will transition from a miles-based rewards program to a points-based alternative, in which points are awarded based on the cost of plane tickets rather than the distance of the trip.

While we don’t have any details beyond that yet, it seems inevitable that Mileage Plan will soon go revenue based. I have two major thoughts about this:

  • This might not be bad news for those who frequently fly Alaska. Revenue based frequent flyer programs are worst for people flying long distances, since the cent per flown mile cost is typically much lower. However, Alaska operates a lot of shorthaul flights, where people could come out way ahead under the new program, since the cent per flown mile cost is significantly higher.
  • A lot of Alaska Mileage Plan miles are earned through partner airlines. This will get extremely complicated, since Alaska doesn’t have the ability to track revenue on partner airlines. This means miles accrued on partner airlines will likely continue to be issued as a percentage of the distance flown, which might not be terrible news for those mostly earning Mileage Plan miles through that method.

British-Airways-Lounge-Chicago-22
Cathay Pacific, an Alaska Mileage Plan partner airline

Are you surprised to hear Alaska Mileage Plan will eventually go revenue based?

Comments

  1. No, time won’t “tell” anything. It was a misprint on the online edition. The print edition did not have this misprint.

  2. So confused. Who discovered this Juneau quotation first? Lucky or Single Flyer? Somebody didn’t properly attribute their source…

  3. @ Mark — Really, time won’t tell? So there’s no chance of Mileage Plan ever going revenue based?

  4. Lucky, did you hear about the police shooting at Dallas Love Field? Airport just reopened. 3-4 hour TSA lines :0

  5. @ lucky, no time won’t tell if its a misprint. You make it sound like we don’t know what the problem was. We do – there was a misprint on the online edition only.

  6. Maybe I’m wrong here, and granted Alaska is much larger than it looks on most maps, but I would think that a lot of intra-Alaska flights are pricey but not necessarily long-distance, so they would actually earn fewer miles under the current system.

  7. Ben, so you’re standing by your post via your comment, “Really, time won’t tell? So there’s no chance of Mileage Plan ever going revenue based?” Really? Even Gary amends his fire drill post with an update, but you’re going to hunker down and not take additional, new info.

  8. As a AS flyer high miles traveled each year I am in total favor, sooner the better!

  9. Okay, I see you updated the text but not the title. Good on you for that, but the title is still way wrong and the update doesn’t show until you click the post. Just thought you’d want to know in case you were going for transparency. 🙂

  10. @Ghostrider5408 surely you can do simple multiplication to see that you’ll earn less miles still overall via revenue based unless all you buy in full fare tickets. You must be the sucker that laps up the Delta emails when they describe the new “enhancements”

  11. Dude, I usually don’t agree with a lot of the conspiracy-ish comments about you, change the friggin title. The text of the article says the exact opposite. It’s one thing to keep the title vague, but at this point it’s downright misleading.

  12. Misprint? How can an entire paragraph be misprinted? Maybe they took out out of the print version because they were asked to and forgot about the online version.

  13. My initial reaction was NOOO…..OOOOOO.

    Now that I have calmed down a bit, here are my thoughts:

    In reality, I primarily collect AS miles by flying its partner airlines and by churning its branded visa, and not really by flying AS. As long as distance-based miles are still being used for partner flights then I’m still good.

    And since I don’t really care about elite status anyway because I don’t fly nearly enough, this change shouldn’t be a big deal.

    The big question would be, how would its award charts change as a result, if at all?

  14. I agree. The current title is misleading given the update. Based on Ben’s comments here, it sounds like he’s not convinced of the misprint story. In either case, an updated headline is in order (include ‘rumored’, ‘per unconfirmed reports’, etc.). The longer this stays, the stronger the credibility hit, IMO.

  15. Other than the top line where it says the article was updated, I’m not seeing the update.

    The title is still incorrect, and the misquote is still there,

  16. INCORRECT.
    Alaska confirmed this as a journalist mistake. Why don’t you stop spreading rumors so you can get more clicks?

  17. Pathetic reportage … how are you justifying keeping this up with the current headline and unchanged text? Your disclaimer at the top of the article doesn’t change the fact that your title is a lie…

  18. Please update the headline, just even adding “UPDATED: Alaska Mileage Plan Will Go Revenue Based” would go a long way in making it less like click bait.

  19. Why delete my comment? Here’s the actual text from the article that you failed to read before posting this.

    “Sprague also announced Thursday that Alaska Airlines WILL NOT be transitioning from a miles-based rewards program to a points-based alternative, in which points are awarded based on the cost of plane tickets rather than the distance of the trip.”

    So why keep up the current title?

  20. Ben is quickly losing all credibility as a blogger between these click bait false rumor spreading posts and his complete lack of transparency around being banned from United.

  21. Losing all credibility? Dude, he is looking at his credibility in the rear view mirror it’s so behind him.
    It also shows he doesn’t fact check anything that he got from somewhere else before he posts it.

  22. I”m with you, Lucky. Where there is smoke, there’s fire. Remember that chart AA published a while back….forgot which one it was…..they took it down, denied any changes, and what happened? A month later, that chart reappeared.

    I’m in the camp that AS WILL GO REVENUE BASED.

  23. So you’re not going to update this title versus rather have people click and read your updates that you were incorrect? Maybe ford can print a retraction for more useless stories.

  24. I agree that the title is misleading. Add the “NOT” to correct it just like the what was done with the newspaper article.

  25. @JR / Lucky / anyone who thinks keeping up this article is ethical in any form – you guys have no idea what journalistic integrity is. You can’t keep an article like this one up without saying it’s speculation in the title – it’s deliberately misleading, and I am now done with this blog. I’ve unfollowed all of your accounts on social media, and will no longer read articles / give you any clicks. You have gone from someone who I respected a lot, Lucky, to someone who just cares about clicks and credit card referrals – it’s really a pity.

  26. Obviously, it’s ALL about the $$$. Has time to tweet about B6 Mint but not the time to fix a glaringly erroneous click-bait title. Or pull the post entirely.

    #PUMPPUMPPUMP — it’s all about conversions…

  27. Irresponsibility like this is precisely why i never use links from this website to sign up for credit cards.
    I’d rather them keep the referral bonus than to encourage more of this clickbait BS

  28. Hey Ben — I’ve always defended you before, but I honestly don’t understand why this post remains up with its current title. Why wouldn’t you change the title or remove it altogether? Yeah, as a huge AS loyalist, I freaked when I saw it and immediately clicked through… And as a huge OMAAT/Ben loyalist, I was pretty upset after solving my initial confusion when I read the article and realized the title was completely inaccurate at best and misleading if I were being cynical.

    Please fix this. I want to continue to defend you and believe in you.

  29. I have accumulated over 100K miles on Alaska Air with the idea that I would fly Emirates First Class sometime in the future. Why not, Alaska Air was advertising in its buy miles promotion that its miles could be used for Emirates First Class.

    Based on this history, I agree with Tony, the reporter probably announced the plans to go revenue based before Alaska Air wanted to announce it. In my opinion, the cat is out of the bag.

    The only thing that would convince me otherwise is a strong definitive statement by the head of Alaska Air that there are no plans to go revenue based in the foreseeable future.

    Fool me once, shame on you. Fool me twice, shame on me. Fool me many times, I will see the consummate loser Charlie Brown in the mirror for sure.

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