Upcoming Devaluations

Alaska Air

Who needs their own suite, anyway?

Who needs their own suite, anyway?

Alaska Air recently made a change to its mileage program that will affect only a few of you but, for those who are impacted, it’s gonna hurt. The airline, whose Mileage Plan program is one of my favorites due to its versatility, but that versatility is now going to come with an increased cost.

A couple of weeks ago, Alaska significantly increased the cost of premium class awards on Emirates, its Middle East partner, by anwhere from 50-100%. That’s a big “ouch.” The airline has blamed “travel hackers,” although One Mile At A Time was told by the company that it was because people were selling award tickets to others (which is not allowed under any program).

Here’s my view: I don’t like when any company devalues its mileage program. I get particularly peeved when they do it without notice, as Alaska did. Not only are they telling you that your miles are worth a lot less than you thought they would but they also don’t give you a chance to adjust. To blame “travel hackers” is disingenuous. No one forced them to offer miles at such a cheap price.

But I’m going to defend them, and there are few airlines that I would defend under this scenario. I don’t like the way that they effected the change, but I understand why they did it that way.

The bottom line is that these awards were priced way too low. Previously, for example, a first class flight from North America to Asia would have cost 200,000 miles roundtrip. Given Alaska’s frequent mileage sales, you could buy the miles at about $.02 each and then immediately book a flight on Emirates. That’s a $4,000 flight halfway around the world. It’s not exactly cheap but, for a product with the quality of Emirates, it’s a bargain. With Emirates getting reimbursed only a small percentage of face value, I can understand their push for change. And if Alaska had given notice, customers would have used miles immediately to book future travel.

Alaska has built up a lot of goodwill over the years and just used up a significant chunk of it (although they regained a bit by allowing people who bought miles in the most recent sale to get a refund). But I view this mileage debacle as a communications error, not malice.

Starbucks – It starts tomorrow

Fewer of these in your future?

Fewer of these in your future?

Here’s the one that will hurt the most people, although the effect will be more moderate. Starbucks recently announced a change to their loyalty program, which will award you “stars” based on how much you spend, rather than how many transactions you make. Instead of getting one star per visit, with twelve stars delivering a free drink, you now earn two stars per dollar spent. 125 stars gets you a freebie. For those who buy just a Tall coffee, this change could almost triple the price of rewards. But for people who buy multiple items, the new program may actually benefit you.

You can see more details here.

 

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2 comments

  1. Thanks for the note Gaurav. I agree that they made mistakes at almost every step along the way in this one. I’m simply more likely to give Alaska the benefit of the doubt than I would be a network carrier because, for the most part, they’ve been very customer-friendly.

    • Gaurav on April 11, 2016 at 7:42 pm
    • Reply

    Got to disagree on this one. Sure since people would have booked out with notice but AS redemptions aren’t as amenable to speculation as AA bookings so people would likely only have booked what they needed. In addition there is nothing that would stop Emirates from tightening partner availability through the notice period. The whole debacle and loss of goodwill would have been easily avoided.

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