So, Alaska Airlines changed its award charts yesterday. And the change is, without a doubt, shitty for consumers. No warning and a significant increase in the points required for some awards. Except the changes are isolated to Emirates metal and represent a very small portion of the total points redeemed annually. And thus the debate begins anew:
If it really is such a small number of points/redemptions why change it at all?
Mostly because they can. And to not do so would be foolish from the company’s perspective.
The rate paid for partner awards comes up for negotiation on a regular basis. It is part of the bilateral agreements between various airlines and it can be the source of many issues when the numbers become imbalanced. If Emirates decides that partner awards cost more for Alaska to buy then Alaska can either eat that cost or pass it on to consumers. And eating it is simply not going to happen. And so, with the updated agreement signed, the numbers change. It does not happen because Alaska hates its MileagePlan members; it is simply business.
It is also not the first time a bilateral agreement has forced changes to the way awards are redeemed. Remember when United pulled redemption for Singapore Airlines flights offline? Similar reasoning, though in that case United met the challenge in a different way, keeping the old costs while no longer auto-pricing the awards online. For Alaska and Emirates that may have not been an option or the two decided that it was better for business to make the change. Either way, those truly loyal to the program and the airline are almost certainly not the ones affected by this change.
The awards were a “bargain” for what they were. But they were certainly not cheap. And the people redeeming them were not the ones flying the airline on a regular basis nearly as much as they were the ones churning credit cards or buying points on dips for the redemption. Yes, those actions were relatively profitable to the company and within the rules of the program. But playing by the rules doesn’t always make one a good customer. In fact, playing exactly by the rules and working the system to maximize personal benefit makes one a pretty bad customer in most cases. So, why change the rules? To get rid of the bad customers.
It is a shitty change for those lured in to the “travel hacking” world, convinced that they can churn credit cards ad infinitum to get cheap flights all the time. But I’m not shedding a tear for them. If for no other reason than that such changes have been happening more and more recently and anyone playing that game who isn’t redeeming immediately is playing poorly. If you bought points earlier this month (which the company will refund, though it was not obligated to) and didn’t redeem them immediately that, too was playing badly. And those encouraging any other form of behavior are providing bad advice.
Points don’t accrue interest sitting in the account; they do not increase in value (with very, very limited exceptions). Hoarding is a great way to get played rather than to play.
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Love your common sense analysis of the Alaska Mileage Plan abrupt change. All the whining about Alaska Airlines screwing over their frequent flyers from credit card churners was laughable.
You forgot the people that aren’t hardcore churners or manufactured spenders…they have been working on a plan to accrue enough miles for a first class Emirates flight for months, if not years. These are the people that have been most screwed by the abrupt change since they have allocated their spending/flying/earning on Delta/American to Alaska Airlines for a long time and now find that they need a lot more miles. I see your point though and it doesn’t personally affect me much but can understand the outcry.
If the goal was to fly on EK via points then it is still possible and the DL/AA thing was never going to get them there otherwise. Moreover, someone who believes that saving for years to get to an award level has been following bad advice for all those years.
Approaching points programs as long-term investments/savings plans has been a bad idea for a long, long time. Far longer than AS and EK have been partners.
Disagree. If you aren’t doing CC churning and manufactured spending…I imagine it would take close to a year to earn 100k miles. Unless you are a big spender. In which case, I don’t think that points are really a big part of your travel plans.
It would take FAR longer than that for most people not playing with CCs.
yep, even if they were to give say, 90 days notice, i doubt that would have significantly changed the number of non-churners who would have reached an award.
Considering Alaska gave a mulligan to folks who bought points and not the guys who fly the airline, I’m not sure which of the customers they do consider “bad” in the case, or at least for whom do they show care.
The people accruing via flight were much, much, much less likely to end up on an EK F/J award anyways. Plus they got the transportation portion of the deal.
If it’s much, much, much less likely then it also should be much, much much less cost to throw them a bone extending the window to book at old rates for example.
If they’re not interested – no harm, no foul, no cost. If they are interested – they’re essentially being left out to dry why any “hacker” buying miles get’s a mulligan.
What’s the “do over” for someone who has already flown? What do you refund? For how far back?
It is impractical and unnecessary.
Extended the old rates for an unspecified amount of time and unspecified target customer. Shouldn’t be that difficult to crunch the numbers and see who might had the balance or prospects (those weren’t cheap awards to begin with, so even a MVP had to save >two years to fly RT with +1).
Not saying it’s practical or necessary (or cheap, since they’d have to eat the extra cost Emirates is probably pushing on them), just pointing out that it’s a clear divider of the type of customer they care about (like in the Lifemiles case, when they rather sell miles and award them for flying the airline).
TL;DR – they have it all backwards, blaming the customer they actually like more.
I think the issue isn’t the change, its the no notice. I totally get “because they can” and “its business” — but it certainly doesn’t instill trust or confidence, especially given the frequency of their sales, it seems that actually want to sell miles. I’d love to see the numbers of sales over the past few, and the next couple (with the one that just ended on 31 March including refunds). That would really show if there’s a business impact, more so than the complaints (myself included) on twitter and blog posts.
No notice sucks. I agree with that. But saying it makes them untrustworthy is a stretch. Trusted by whom? They care far more about the much larger population to whom this can be sold as cutting out the greedy folks to make sure the rest of you still get value. It could help the brand out in the real world.
Beyond that, you cannot look only at the dollar value of points sold to evaluate the impact. You also must consider redemption costs from those sales. They can and do track such things. Maybe they sell a lot fewer EK premium redemptions through the points sales they run. But when the alternative is losing money on each transaction I’d say a smaller profit is going to be better than taking a loss.
I highly doubt they lost money on the redemptions, or else the award chart would have been gutted a long time ago. It’s not like this was a new loophole that suddenly got over-exploited.
What about people who started SPG/MR point transfers with hopes of booking these awards? Is Alaska going to reverse their transfers? They should compensate those folks as well, or at least allow them to book at old rates if they can prove they did the transfer in the past 1-2 weeks.
I’ll be very skeptical now of using my SPG/MR points in Alaska transfers, so I definitely lost trust in them. Maybe they don’t care but it’s bad business and publicity, because eventually their core customer base will get around to reading blogs and will start doubting them too.
…I meant to say SPG transfer, doh.
They weren’t losing money before. And then the cost changed so they changed to rules. Keeping the old rate for any duration or group would have led to losses. They’d have to be idiots to do that.
As to your loss of faith in the company, as someone who seems keen to transfer in and then maximize redemption you’re probably the type of person they’re looking to dump as a customer. Oops.
LOL, I can’t believe you’re defending them. We’ll see what tune you’re singing when you’re on the receiving end of a raping when another random devaluation strikes.
When I transfer miles or buy them, I at least act in good faith. They’re just being scumbags. But I hear rumors they’re actually honoring old rates for anyone who made non-reversible transfers/mergers to book these awards.
Refunding the money for miles purchased also leads to actual losses (not just would be losses). Yet they do that. Because the want they don’t want to antagonize the client they are antagonizing in their blog post. Coherent message much?
Also, as per other blog reports, they seem to not only offer the old rates but also add a couple extra points for people waiting for transfers to complete and other. Idiots then?
They do want to sell miles, and they do want you to keep buying them.
Just in this scenario, the cost of service for them (perhaps suddenly) rose significantly – but they still want your “travel hacker” business (as longs as they profit as well).
Yup, and they’ll continue to get it as there are still awards AS offers which are a pretty good deal – assuming you can find the inventory – for a wide variety of destinations and cabins.
They won’t all have showers and faux-gold trim everywhere but that doesn’t mean they aren’t still good value.
Thanks Seth – You are the only voice of reason out there. Really appalls me that so many bloggers say they are outraged and how dare the company blame them? Just own up to the idea that they hawk little known deals and eventually kill that deal. Get over it and on to the next “hack” although they are getting harder to find.
The writing has been on the wall for a long time. Miles and Points are rapidly transitioning to points earned solely by spend, and it won’t be too much longer before the majority of programs transition to dynamic (price-tethered) redemptions. Once the earnings and redemption rates are fixed at some %, the opportunity for significant arbitrage will evaporate, as these companies are not going to set rates anywhere near as favorably as what can be done with mileage or region-based redemption options. Cash-back cards will likely be superior in most instances, as cash is fungible, and points aren’t (not to the same extent).
Moreover, credit card issuers are actively cracking down on the manufactured spend crowd. Premium-cabin fares are more regularly pricing at what are historically-low rates, driving up demand for paid premium-cabin travel and reducing award inventory.
All of this is occurring against a backdrop of steady, decades-long devaluation since the inception of just about every major mileage currency. I’ll enjoy what diminishing returns are left in the mileage space (far fewer golden geese than there were just five years ago), but a strategy for maximizing your cash-on-hand, rather than points-on-hand, is likely to outperform for those seeking to maximize their potential travel in the future. As the returns keep diminishing, chasing the miles/points becomes a fool’s errand. No harm in earning them as an incidental perk whenever possible, but expending considerable effort trying to earn points likely won’t be worth the payoff.
No problemo, as long as I can get 5 Alaska Airlines in one day!
it’s those that actually earn their miles by flying AS that get hosed. I don’t fee sorry for anyone who feel they were screwed.
Thank you for being probably the single voice of honesty about this devaluation. Your peers constantly pimped the Bank Of America Alaska Airlines card. Other bloggers were actually saying to apply for as many as you needed. With the miles sales and credit card churning, why did anyone think that this could continue? For me, it really wasn’t on my radar as I think travelling thru the ME takes too long. But, it would have been nice to try one time. Thanks to the greedy, it was ruined for all!
I believe only bloggers make up the “travel hacking” world. The rest of us are merely artistic people who are very creative in how they travel. Shame on Alaska Airlines for libeling the arts community, but I guess haters are gonna be haters.
Wham. Bam. Thank you man. (Apologies to David Bowie) At last a voice of reason. I’m as guilty as many in this “game” and have always believed the dread apocalypse would arrive. I hardly thing that this was it but, judging by so many of the blogs and responses, maybe it’s time for me to reread Revalations.
I’ve been saving Alaska Air miles for two years for an upcoming trip from Seattle to Delhi for my family of 4 on Emirates. I had enough miles for all of us to fly RT in Business or a mix of First and Business. I did my last look at redemption charts the day BEFORE the devaluation and signed on to pull the trigger the VERY MORNING of the devaluation. My timing remains as flawed as always. First class is out of the equation. I now only have enough for the 4 of us to fly Business one way and Economy returning. What a major disappointment. I, for one, would certainly benefited with a little heads up.
Have you tried calling Alaskan and pleading your case? There are positive reports of Alaskan making exceptions.
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