Airlines all happen to be in a huge boom right now, record profits in part due to high travel volume and low fuel costs. In turn, many airlines have started to change their loyalty programs, in many cases making them far less appealing. American just introduced a new award chart with many higher cost tickets. One thing you must give credit to American for is the fact that they made their changes very transparently, something Alaska Airlines is learning the hard way.
A few days ago, Alaska Airlines decided to change their award prices for Emirates first class. This is an award ticket I actually took advantage of not too long ago. Award prices doubled overnight… but Alaska never gave any warning to customers. One day you went to bed with a 90,000 mile trip from the US to Dubai in Emirates first, the next morning it was 100% more expensive. Now we do have to make it clear that this is Alaska Airlines’ program and they do in fact have the right to change the program whenever and wherever they want. I don’t know anyone arguing that they don’t have this right, the question is why they did it without warning customers.
Let me pose a scenario that shows why this is a terrible idea, and why customers reacted so harshly to this. Out of these changes came many stories like the following. People had been saving for a vacation, gaining points here and there to take Emirates first class. The night before the change, these tickets were very close to some people’s grasp and they went to purchase points. After spend $1000 or more getting the last of the points they needed, they went to bed, planning to call or book the next morning. When they woke up, the price had doubled, all the work they had done and the $1000 they just spent was all for nothing, they were now only halfway to the goal that was just available to them the night before.
Transparency is very important to customer loyalty. Alaska Airline shad a sweet spot where many people wanted to fly Emirates. I even flew with them to Hawaii over American Airlines because of a credit card companion pass that I received gaining points for my own Emirates flight. Alaska impressed me, and really is a good company… but this makes me think twice about their loyalty program. It’s no longer really useful to me, and I likely will not choose Alaska for any of my flights in the future… just no reason to.
This is the danger in changing your loyalty program like this, you might just lose the ground you gained in your loyalty program. This will likely upset many people who will then leave the Alaska loyalty program. While Alaska has now back peddled a bit and after blaming travel hackers for the change, has now started to offer refunds on purchased points since March 1st. Worse though is the people that transferred points from programs like SPG. This takes a number of days and is not reversable… so now that person is out SPG points, and doesn’t have enough Alaska points to purchase a ticket… what do they do??
These are all really good examples of why transparency is very important. Secondarily, companies need to review their loyalty programs and avoid knee jerk reactions. Emirates seems to be the driving force behind this change, but Alaska Airlines has basically undermined a big reason for their recent increase in loyalty point profits. There needs to be a balance struck between eroding your business, and making Emirates happy, Alaska missed that mark and I now suspect they will lose a lot of the profits they were making.
Alaska has the right to make these changes, and we have the right to go elsewhere. Alaska Airlines Huge Award Blunder