Loyalty Programs ARE NOT Loyal & We Received Proof Today with 67-100% Increases from Alaska Airlines

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Alaska Airlines Devaluation Emirates Awards

Alaska Airlines Devaluation Emirates Awards

Alaska Airlines absolutely gutted their award chart on partner Emirates with absolutely no notice. When I say gutted, I am not exaggerating. Let’s take a look at the old and new award chart side by side for travel to the Middle East, Africa and Asia.

Alaska Airlines Devaluation Emirates Awards

As you can, see first class awards were hit the hardest. First class from North America to Africa DOUBLED in price and awards to Asia and the MIddle East are significantly higher as well. As of now the award chart for flights to Europe looks exactly the same with first class costing 100K miles each way, however it seems that has been devalued too and the award chart is an error.

Alaska Airlines Devaluation Emirates Awards
This is what the award chart says for flights to Europe via Dubai on Emirates.
Alaska Airlines Devaluation Emirates Awards
This is how an award is pricing.

Despite what the award chart says, it appears that business class to Europe has increased from 75K to 105K and first class has increased from 100K to 180K as well. Another huge increase.

Loyalty Programs Are Not Loyal

This now brings me to the main point of this article. We really need to stop loving loyalty programs. Alaska Mileage Plan has had one of the best reputations around and people always talk about what a great “value” their miles are. (And they do still have value.) I would even classify many people as beings fans of the program. It is one thing to like a company, but don’t think they are loyal to you.

What Alaska did today is flat out disloyal and wrong. It certainly isn’t illegal and they have a right to do it, but they showed a complete disrespect for the “loyalty” of their customers who have been earning and saving miles for redemptions. They made a fiduciary decision and decided it made sense to devalue their Emirates redemptions overnight instead of giving customers notice. I am sure it saved them a lot of money, but did it lose them “loyal” customers? I suspect they don’t believe it will make a difference or they wouldn’t have done it. Only time will tell.

How to Win In Loyalty

I spend a lot of time writing about how to maximize returns from loyalty programs. Most people don’t really pay much attention to the value they receive, which leaves openings for you and me to study the program’s rules. This is great and it is the only way to win at loyalty. It is you vs. the loyalty program. You vs. the company. Inefficiencies are part of life and we owe it to ourselves to find them and utilize them within the rules of the program.

Do you know why so many companies have loyalty programs now? It is because they make a lot of money. It is as simple as that. If the companies could strengthen their brand and make more money without the programs then they wouldn’t exist. Since their goal is to make money, then they will cut out routes/options that are inefficient when they discover them. We win by discovering them first. Remember, Alaska Airlines is as loyal as every other company which is to say they aren’t.

Emirates First Alternatives

I had planned to book an Emirates first flight for this fall very soon and thus I am obviously not happy with this development. While I do still have enough miles to book such an award, I’m not sure if it is worth spending at such a premium just to take a shower on board an airplane. Thankfully there are some alternative programs that also allow you to book Emirates awards. View from the Wing has a good rundown on which options are best.

Conclusion

To say I am disappointed in Alaska Airlines is an understatement. I don’t have an issue with the increases themselves (although they are drastic), but the lack of notice shows a complete disrespect for their customers and shows you that they are just like every other company. They are loyal when it suits them and only when it suits them. This is of course no surprise and so we move on.

What are your thoughts on loyalty and today’s huge increases for Alaska awards on Emirates? Let us know in the comments.


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16 COMMENTS

  1. Their Twitter account seemed to indicate that the mileage amounts are set by Emirates, not Alaska. If that’s the case, this could be seen as Emirates closing a “loophole”

  2. I too have no issue with the increases l, though they are almost obscene. I also don’t have as big a problem as somecwithbtheir being no notice, though I don’t spot oater that aspect either. Where I have a problem is with running the mikes sake promotion and then doing this specific devaluation in the final day of it. That just flat out disgusts me. My wife and I just last night decided to pull the trigger this morning and both max out the purchase. Thankfully the only thing that saved our asses and a boatload of cash, was Bens post. Without that we would have been in deep sh*t.
    Never thought that Alaska would prove itself to be as callous as uncaring as the Big 3

  3. ‘Loyalty programs are not loyal.’ – oh how shocking! They’ve ALWAYS been transactional marketing tools.

    OTOH, program members who game the program to get outsized rewards aren’t being ‘loyal’ in any meaningful sense either (‘mercenary’ seems a better description), so it ultimately seems pretty fair.

    • Yes a select few find inefficiencies for outsized rewards, but the vast majority don’t and thus the company receives almost all of the benefit. I thus wouldn’t call it fair, but then again I wouldn’t call it unfair.

      • ‘Loyalty’ implies a persistent affiliation, regardless of moment-to-moment self-interest. Family, country, employer, and favorite sports teams engender loyalty. Seeking to maximize benefits due to inefficiencies, though, is the antithesis of loyalty.

        Expecting a for-profit company to be loyal to anyone other than its stakeholders is irrational. Companies are disloyal to their owners when they allow inefficiencies to reduce long-term profitability. Programs that allow some members to benefit far more than others may be perfectly acceptable if overall profitability is maximized, but that has absolutely nothing to do with ‘loyalty’.

  4. It sucks but it’s expected.

    I’d say that while it’s technically “you vs loyalty program,” it almost comes to you vs the other customers. The “loopholes” (or outsized values) only persist because utilization remains low. As more and more people find and exploit the value, the loyalty program can’t or won’t afford to keep offering the deal.

    Gets back to a notion of killing deals through press.

  5. This is why I don’t have a moral problem manufacturing spend. It is our only way to hedge against these companies devaluing their awards. You just have to be one step ahead of them.

  6. It sucks but it’s kind of predictable.

    I’d add that while the game may seem to be “you vs. the loyalty” program, in many ways, it’s “you vs. other players.” The source of value to you is these “loopholes” (or sweet spots, or outsized values). The reason the other party is still leaving those loopholes open is that they aren’t attracting that much attention and costing them too much. As that loophole becomes more widely known and exploited, the loyalty program will identify and close the loophole.

    I think it goes back to the broader point of exposure killing deals. If only a few are taking advantage of the sweet spot, it may fly under the radar or remain an acceptable expense to the program.

  7. I’d like to think that the reason the points hacking community exists is BECAUSE loyalty programs aren’t loyal. It emerged out of the need to actually pull some value out of a system that is designed to retain customers and expand marketing.

    The points community is the fight against the low values that they give us. If you think about it, it is pretty ridiculous that we have to “game” a system just to get our bags on a flight without paying them extra.

    That is why companies like Southwest continue to thrive; they are pretty transparent and to my knowledge haven’t done any of this type of bait and switch. The younger generation does not accept that kind of treatment and it will slowly become apparent.

  8. “While I do still have enough miles to book such an award, I’m not sure if it is worth spending at such a premium just to take a shower on board an airplane.”

    Lol. This is how I know I’m not anywhere near the same world of flying as many/most of these blogs and the quantity of miles their accounts have: I can only dream of having so many miles that I wouldn’t be “sure” if it wasn’t worth a couple hundred thousand of ’em just so I can tell everyone I’ve taken a shower at 35,000 feet. Looking at my miles balances, I am COMPLETELY sure on that one.
    I guess one bright side of not having millions of miles is, you don’t have to go through all this angst and anger when your elite cabin prices rocket up.
    (P.S., Now I’m only speculating here, but I imagine taking a shower at 35,000 feet is a lot like taking a shower at home, only in a much more uncomfortably tiny cubicle. Fortunately, so far, I haven’t lost any sleep over missing out on what, by most miles bloggers’ accounts, is apparently well-worth the thousands of dollars worth of miles it costs.) (Like I said, yes, we’re talking different worlds.)

  9. Luckily my girlfriend and I flew Emirates First Class to Thailand in February!! Thank you BofA!! But, I have been churning BofA Alaska cards for the past two years and have 130000 miles currently that are a lot less valuable. I guess we’ll be sitting in business class with the rest of the plebes on our next big trip. Haha. Joking. Emirates business is pretty nice!!!

  10. Well, I always fly Economy as I would rather fly MORE rather than just be at the front of the plane, so this doesn’t affect me at all! Economy didn’t change a BIT!

    Yay for more travel, not fancier!

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