Alaska Airlines use rewards program to combat Delta, United, American

Alaska Airlines Boeing 737 cabin.Alaska Airlines

• Alaska Airlines is only major US carriers to have a frequent flyer program which still offers mile-for-mile redeemable miles without spending component.
• The airline sees its frequent flyer program as a valuable weapon against rivals such as American, Delta, and United.
• Alaska hopes to use the program’s generous reward offers as a way to convert prospective customers into loyal repeat customers. 

In recent years, airlines across the industry have worked to optimize their frequent flyer programs to balance rewards for those who fly the most and those who spend the most money.

In most cases, tweaks to the system have added mechanisms to account for dollars spent with the airline in addition to the total mileage flown. 

For most passengers, the changes have resulted in less generous frequent flyer programs. 

The only major US airline to buck this trend is Alaska Airlines which has not factored spending into ints frequent flyer mileage formula. Instead, you earn however many miles you fly on Alaska. 

“The fact that we do mile-for-mile and we have our companion fare (the program is) so generous,” Alaska Airlines managing director of marketing and advertising, Natalie Bowman told Business Insider.

(Alaska’s companion fare allows holders of the airline’s credit cards to purchase one round-trip ticket every year to anywhere in its route network for $121.)

This year, both US News and noted travel blog The Points Guy named Alaska’s program the best in the US. 

As a result, the frequent flier program has become a valuable weapon against larger full-service carriers such as American, United, and Delta.

“Alaska Airlines has to go above and beyond its rivals because it doesn’t have the network diversity of rivals,” Raymond James & Associates senior vice president of equity research, Savi Syth, told Business Insider.

An Alaska Airlines Boeing painted in its Virgin America “More to Love” merger livery.AlaskaIn addition, Syth noted that Alaska’s decision to not feature a revenue component is due to the fact that it caters to a slightly different clientele than its rivals which are focused on high-spending business traveling “road warriors.” 

With the acquisition of Virgin America, Alaska Airlines has firmly cemented its intention to become the carrier of choice for the West Coast of the United States. 

However, Alaska’s larger rivals won’t back down so easily.

Delta invaded Alaska Air’s home turf in 2014 when it added Seattle-Tacoma International Airport to its network of hubs. 

Alaska secondary hubs in Los Angeles and San Francisco are just as competitive. United is a major player at SFO while all three major legacy carriers have hubs at LAX.

APFor that reason, the airline’s mileage program has become a key part of Alaska’s business strategy in California.

“The travel mindset in California is that you take weekend trips on a regular basis,” Bowman said. “It’s not such a big deal to fly from LA to San Francisco a couple of times a quarter.”

“So what we’ve tried to do is show just how a few of those trips can earn you free travel on Alaska must faster than with any other airline,” Bowman added. 

Alaska’s goal is to use the generous rewards program to turn prospective customers into loyal repeat customers.