Many of you have heard by now that Alaska made an unannounced, overnight change to how they price first class award travel on Emirates. It’s an unusual move for them, and it affects an award that many “travel hackers” felt strongly about. Here are the old and new prices (one-way) for first class awards on Emirates when redeeming Alaska Airlines miles.
|Region||Old Price||New Price|
|North America to Europe||100,000||180,000|
|North America to Middle East/India||90,000||150,000|
|North America to Africa||100,000||200,000|
|North America to Asia||100,000||180,000|
These were expensive awards to begin with and are now prohibitive for most travelers. There have been smaller increases for award travel in business class and no increases for award travel in economy class. No prices for award travel on other airline partners have been changed.
UPDATE: Alaska Airlines published a statement on their corporate blog this afternoon with more information about the reasoning behind these sudden changes. It includes an offer to refund the purchase of miles made on or after March 1, 2016.
I’ve devoted a significant chunk of my annual travel to Alaska Airlines since I moved to Seattle about 8 or 9 years ago. I’m generally known as someone who writes a lot about the airline on my blog, and I’ve even been invited to write about their loyalty program on Alaska Airlines’ corporate blog. But beyond that I am not an airline industry insider with decades of experience. I don’t actually know what they’re thinking. Most of my questions about Emirates in the past have been deflected.
I waited for an hour after reading the news this morning and wondered if there was any way I could write about this without sounding like an Alaska Airlines apologist. I decided it was better to just own up to it and share my thoughts. You don’t have to agree with me. That’s why these are called opinions.
Is there truth to a statement from the @AlaskaAir Twitter team that Emirates is the one who decides how many miles Alaska needs to charge for an award ticket?
I think it’s less clear than that tweet made it look. 140 characters to explain company pricing decisions? There’s bound to be more to the story. I think it’s obvious that Emirates controls some factors like reimbursement rates and their willingness to continue being an Alaska Airlines partner. Those factors indirectly affect award prices. It’s wrong to say that Emirates actually picks a number, but Alaska probably doesn’t have a lot of flexibility in where the number ends up.
Should we be expecting devaluations for award travel on other Alaska partners?
I don’t think so. What would be the motivation? The relationship between Alaska and Emirates has been strained for a long time — when it comes to first class award travel. No more chauffeur service. Disappearing award space. Customers who take advantage of Alaska’s liberal routing rules. (They know about that crazy routing through Australia, and they weren’t happy about it.) Things like that.
But Alaska and Emirates’ partnership on revenue travel seems to be great given a recent codeshare agreement, and I haven’t heard any complaints about booking award travel in business or economy class. (Those of us who talk about first class aren’t their only customers.) In other words, a change to first class awards isn’t surprising. What’s surprising here are the magnitude and the lack of notice.
There have been no similar issues with booking award travel on other partners. People point to Cathay Pacific and say it’s next. Why? Cathay Pacific has been talking about releasing less award space to partners, but that’s not an issue specific to Alaska Airlines — and there’s no indication that cost is the issue, just exclusivity. American Airlines raised its prices, but it did so across the board and not because Cathay Pacific told them to. There’s no reason for Alaska to follow American’s move. If we do see a change it might be to increase Alaska’s award chart for American Airlines. American raised award prices on some of its own flights, and in cases where it has a direct relationship with Alaska I can see it arguing for parity.
Why did Alaska Airlines make this move without more notice?
I think the timing had something to do with updating the system to add awards for Hainan Airways. And it’s the end of the fiscal quarter. That just seems convenient. As for why it didn’t give more notice, I would assume it has to do with the immense effort required to accommodate last-minute bookings. Alaska can book Emirates awards online. A lot of people probably call in, too. And Alaska is a small airline that doesn’t have a large staff for ticketing partner awards. The number of people who actually want these tickets is likely small relative to the hassle it would create.
Isn’t it unfair to sell miles at a discount while raising award prices at the same time?
Yes, but go back to the earlier point about risk vs. reward. How many customers are interested in buying miles, and how many will be affected by this change — which affects only premium cabins on one carrier? We’re a vocal minority, but still a minority. I’m not sure it was a big enough reason to delay the promotion for selling miles, which was likely motivated by many other factors.
Isn’t Alaska worried about losing customers?
There are two camps of people here: those who bought or transferred miles, and those who have been saving up miles. I’ve read a lot of angry comments from the first group and a lot fewer from the second group. They’re both customers, but the first group may not have the same lifetime value. Customers who accumulate their miles over years of travel probably have other reasons for flying Alaska Airlines besides the hope of a first class award on Emirates. I know I do.
I’m reading comments on Twitter right now from angry people saying they’ll switch to Delta or United. Really?! How will that help you book an Emirates award ticket? Do they fly somewhere that you can no longer reach with Alaska’s partners? These don’t seem like logical responses.
I get it. People are justifiably upset.
Being upset doesn’t mean Alaska is going to undo this change, and it may not mean you change your behavior in the long run. There are still lots of good values in the award chart and the program as a whole. For some people who do change their behavior, maybe that’s best for both parties.
There’s a concept in business called “firing your customer.” I think Alaska, overall, has great customer service, but one of my favorite things about them is they don’t put up with shit. It amuses me to read about them closing accounts when people apply for multiple credit cards on the same day or booking tickets and canceling them just to buy miles at a discount. It’s not how the program is supposed to work, and they can take a hard line when they need to. If your sole reason for being “loyal” to Alaska was to buy miles and book Emirates first class awards, then that’s not a customer many companies would tolerate for very long.