Alaska Airlines' loyalty boss talks about a joint frequent flyer program with Hawaiian Airlines

This week, Alaska Airlines announced sweeping changes to its Alaska Airlines Mileage Plan program. The overhaul will make it easier for customers to earn elite status and loyalty benefits in 2025. Additionally, the airline announced that customers will soon be able to book international itineraries onboard multiple Alaska partners through its website.

Still, leaders make it clear that these steps are just the beginning

In the coming months, Alaska expects to announce a wide range of additional frequent flyer changes as it plans a joint loyalty program with newly acquired Hawaiian Airlines.

At this point, it is too early to speculate what a blended Alaska-Hawaiian loyalty program might ultimately look like. Because whether it will even be called a “Mileage Plan” remains in limbo.

“That’s something we’re struggling with,” said Brett Catlin, vice president of loyalty, sales and alliances at Alaska Airlines.

However, Catlin offers some clues about how Alaska thinks about its future frequent flyer program. When he spoke with TPG this week, he touched on the possibility of a new Alaska lounge in Honolulu, the long-term future of the airline's oft-touted mile redemption reward charts and its stance on allowing customers to transfer credit card rewards to the airline.

Building a shared loyalty program

Since announcing plans to acquire Hawaiian Airlines last December, Alaska Airlines executives have remained steadfast: The two airlines will operate as separate brands, with the loyalty program serving as a self-described “connective tissue” between Alaska and Hawaiian.

Building such a program is an unusual task for a US airline. It is far more common in Europe, where the ongoing consolidation of the airline industry often results in a parent company (such as Lufthansa Group) controlling a number of airlines that retain their unique regional brands (such as Swiss, Brussels Airlines and Austrian Airlines).

Could a program like Flying Blue, the joint loyalty program between sister brands Air France and KLM, be a model for Alaska's plans?

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“I think you could apply that to what we want to do,” Catlin replied.

“To be honest, I think there are others that are maybe even better and that are outside of the airlines,” he replied, pointing instead to a highly publicized hotel merger in the late 2010s.

“When you think about (Starwood Preferred Guest) and Marriott, what they've done with Bonvoy,” Catlin continued, “…the construction of bringing them together and having this 'House of Brands' is really interesting.”

Award charts future

One of the biggest questions Mileage Plan supporters will undoubtedly ask as the program evolves concerns the future of Alaska's award charts.

Today, Alaska Airlines adheres to fixed, predictable redemptions for Alaska-operated award flights and also sets benchmarks for partner awards based on region of the world. Remarkably, Alaska left that structure intact when it announced its mileage plan overhaul this week, largely preserving the appeal of perhaps the U.S. airline industry's most valuable loyalty currency.

The move also left Alaska as something of an anomaly among U.S. airlines, most of which have moved to dynamic award pricing — a system that makes points prices far more flexible because they are tied to supply, demand and other algorithmic forces.

But with major changes still afoot for Alaska's loyalty program, the question arises: Will Alaska's rewards charts hold up in the long term?

“I think what we've always valued is the idea of ​​a fair and transparent program,” Catlin said. “We believe we have a redemption program that is broadly applicable – of interest to many consumers – and we like what we have.”

But he also hasn't completely closed the door on future changes and may focus more on some dynamic pricing features for his program. For example, Catlin pointed out that the airline already offers higher-priced partner awards when standard award seats are full.

“I think there's merit in that… because I know there are people who are willing to spend more to fly the day they want,” Catlin explained. “I think what you'll see is that we're leaning more towards… looking at opportunities where the flight might start with a lot of seats available, but the fare is very high – I'd like to make those seats available under, really compelling prices for our guests on a redemption basis.”

It's worth noting that Alaska made concessions to the Biden administration on consumer protections, including on its loyalty program, when it received approval from the U.S. Department of Transportation to take over Hawaii. This could ultimately help protect members from a significant increase in mileage redemption if Alaska's loyalty model undergoes changes in the future.

“We are the fifth largest airline in the United States. We have to compete differently. One way we compete is through loyalty,” Catlin said. “The idea is essentially to not go… and ultimately make the currency less interesting.”

No desire for credit card transfers

Today, there are several ways to transfer flexible credit card rewards to Alaska Airlines.

Bilt Rewards points transfer to the Alaska Airlines Mileage Plan at a 1:1 ratio. Recently, the Hawaiian acquisition opened a new way for American Express cardholders to transfer American Express Membership Rewards points to HawaiianMiles and then seamlessly transfer those miles to the Alaska Airlines Mileage Plan.

In the long term, however, the airline isn't exactly keen on adding flexible credit card rewards transfers to its program – and instead hopes to entice customers to use its line of co-branded credit cards.

“To be completely honest, our intention is not to have a transferable currency that guests can use to make money with competing cards,” Catlin said. “And if we get the opportunity to close that door, we will.”

Value check: Are airline credit cards still worth it?

Is a premium credit card on the horizon?

With that in mind, could Alaska add a premium credit card to the mix?

Currently, the airline's top consumer credit card is the Alaska Airlines Visa Signature® Credit Cardwhich charges an annual fee of $95. However, each of the three largest U.S. airlines offers high-end cards with higher annual fees and more premium benefits, such as lounge access.

In recent weeks, Southwest Airlines and JetBlue have each announced plans to add their own higher-tier co-branded cards; In JetBlue's case, this card will unlock access to the first-ever airport lounges.

What are Alaska leaders saying?

“From our perspective, there’s a lot of value in this,” Catlin told TPG. “There is nothing to announce today, but the idea of ​​segmenting (the card portfolio) makes a lot of sense from our perspective.”

Alaska's future lounge plans

Alaska currently operates nine dedicated airport lounges, primarily focused on its West Coast hubs. This includes a new, state-of-the-art facility recently unveiled at San Francisco International Airport (SFO).

It seems like a good bet that more could be on the way following the Hawaiian acquisition, particularly with Alaska Air Group establishing a new hub at Honolulu's Daniel K. Inouye International Airport (HNL) – although Hawaiian already has one It operates its own hub outpost there.

“There is clearly an opportunity for us to create an experience that better reflects what the Alaska Lounge portfolio looks like today,” Catlin said. “I know our lounge team is actively looking into this. There is space in Honolulu, and that's good news. It’s just a matter of how quickly you can do it and how it meets the standards that Alaska guests are used to.”

Conclusion

It's a time of significant change at both Alaska Airlines and Hawaiian Airlines, from operations to loyalty, as a round of mileage plan changes on the books shows. More are expected to be added over the next year as the company sets up a joint loyalty program for both brands.

However, the changes unveiled last week are likely to prove a foundation for the future program, Catlin said.

“We don't want to introduce something that excites guests and then completely change it in six months,” he explained, noting that the company expects a number of loyalty changes in the coming months but is hopeful for the new ones Program fully established within 18 months.

“We don’t want this to be an endless cycle of change,” Catlin said. “We want to stabilize.”

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