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?