Alaska Airlines Program numberProgram Number Alaska Airlines
Shortly after completing the Virgin America deal, Alaska Airlines took travellers - and some loyality professionals - by surprise with a straightforward statement about its FFP program: Each passenger continues to make one kilometer for every kilometer flown. Recently this was common for all US airlines.
Travellers on most airlines who travelled only one leg from Seattle to Chicago earn about 1,720 points on the airline's fidelity program, regardless of whether they purchased a low-cost or an expense ticket. However, the airline's fidelity program was not designed to provide a high level of service to travellers. Over the past two years, American, Delta and United Southwest, JetBlue and Virgin America have teamed up to introduce a revenue-based system in which mileage is awarded not for distances travelled but for cash used.
This is good for those traveling on our five-digit rates - on United, a high-ranking élite airline with a $6,000 dollar Classic fare from Frankfurt to Newark will earn 66,000 air miles, around three and a half the amount of the old fashioned travelcard - but it's not helping everyone else.
Nevertheless, airlines believe it makes good business to reward profitable clients over those who travel long routes at significantly reduced rates. The only way out had been Alaska, which rewarded travellers on the basis of how far they flew. However, when it took over Virgin America, no one was sure how the carrier would deal with its combination programme.
Because Virgin America gives points by keeping track of customers' spend, Alaska would have had an excuse for following other airlines. However, on December 19, she took a different approach, not only to maintain the old system, but also to reduce the number of mileage that many travellers need to cash in free tickets. Airline companies are listed companies with investments, and they seldom make choices for reasons of mere aluminium.
Alaska' s commitment to the current situation is that its program can be a differentiating feature that keeps clients faithful. It is a similar policy as in the Southwest, which still allows all travellers to cheque two free pockets up to the "Bags Flying Free" brand. "Every other carrier will charge for hold baggage.
Clinging to its system allows Alaska to give away more points than its rivals, and the carrier has to keep them as a debt in its accounts. "Think it might be more costly for us to have a kilometer-based program than an income-based program, but the revenues we' ve been losing from the alienation of our faithful clients are more than we wanted," Butz said.
Undoubtedly, Alaska's clients will appreciate the choice, as most will accumulate enough free travel mileage much earlier than on Delta, United or American. If they' re more loyal towards Alaska is less clear. Rare travellers like lavish fidelity programmes, but they often favour even more rebates and could overflow to Delta or even Spirit to make savings of $5 or $10 per pass.
Virgin America's clients must also win Alaska's confidence. Virgin America does not have the most profitable airline program, but it has built a loyal following by other means, such as maintaining an entertaining, welcoming atmosphere in its airplane. Whilst Virgin America will continue to be a stand-alone company for the time being, Alaska wants to concentrate on the long-term retention of these clients, and a large airline program is part of the company's overall business plan.
A recent article by Gary Leff, an aviation logger and points programme specialist, praised Alaska for its choice and called it a major step in building customer loyalty by bringing two airlines together. Alaska could always change course.