Alaska Airlines Blames ‘Travel-Hackers’ for Overnight Price Increase
Joe Cortez April 04, 2016
Computer Keyboard with Blue Airplane Button Illustration
Managers claim they were “unable to communicate” large increases in award redemption prices.
Alaska Airlines is opening up on the reasons behind the price increase on Emirates first class award tickets, claiming they were “unable to communicate” the changes prior to their posting. In a question-and-answer post to their website, the airline sought to answer many of the concerns raised by frequent flyers hoping to use Mileage Plan miles for premium awards aboard the Middle East carrier.
“It is a priority to ensure Alaska Airlines Mileage Plan members retain access to first and business class on Emirates,” Ryan Butz, Alaska’s managing director of loyalty marketing, said in a statement on the website. “We apologize to the customers who may have been surprised by [the] update, which we were unable to communicate in advance.”
Alaska Airlines made the changes on Thursday, March 31 with no formal announcement. The increases varied between 50 and 100 percent of their original award pricing. Alaska claimed the new award prices were the result of increased award redemption due to low prices. Without naming Emirates, the airline cited “dynamics of this particular award” as the reason changes could not be announced ahead of time.
“With the rise of ‘travel-hacking,’ intended to exploit Mileage Plan’s award routing rules, coupled with below-market award levels, our previous award levels were unsustainable,” a statement reads on the website. “The new award levels enable Alaska to continue to offer Emirates Business Class and First Class as a redemption option.”
Although these awards were changed overnight without announcement, the airline announced future changes would be communicated with at least 30 days’ notice. Those who purchased Mileage Plan miles after March 1, 2016 with the intention of flying in Emirates premium cabins can request a refund by contacting the airlines’ Customer Care department.
The change is the latest loyalty program shift to affect flyers in 2016. In November 2015, American announced shifts to their loyalty program taking place later this year, moving to a revenue-based rewards model for flyers aboard their aircraft.
[Photo: Getty]
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To me, the key point is that Alaska was offering "below-market award levels". I interpret this as they were losing money on these awards. Since Alaska is in business to make a profit, they needed to change the rates. Perhaps the redemptions were so few that Alaska was willing to accept the loss, but now that the value of the award is better publicized, Alaska is not longer willing to accept the larger losses.
I presume Travel Hacking is referring to people who don't fly the airline regularly but just join the program for redemptions when the redemption value is better there than somewhere else. Alaska originally envisioned its program to be mostly used by people who regularly fly Alaska, but the blogging/etc community explained how people who never flew Alaska could get Alaska miles and redeem them for Emirates premium class. That created a much greater number of bookings than had only regular Alaska fliers been doing bookings. I presume the term comes from the fact that these people "hack" together a plan to earn the miles (not from flying Alaska) and redeem the miles, just because they saw that the award chart is unusally good there. So Alaska had two choices: Restrict such Emirates bookings only to people who regularly fly Alaska (which would presumably have been a major IT change that might have taken a long time), or redo the Emirates premium cabins award chart (while not putting any new restrictions on who can redeem for those).
Such a disloyal company
Alaska Air...Hackers?!?! Please explain. You mean those of us who know how to read award charts?