The move by Delta and United to revenue-based loyalty programs beginning in 2015 has raised the specter, unsettling to many, that that approach would inevitably become the industry standard.
But American, now the country’s largest carrier, has elected to retain its traditional mileage-based program when AAdvantage and Dividend Miles are merged sometime in the second quarter of 2015. If the airline is contemplating a wholesale program redesign along the lines of Delta and United’s, it isn’t saying so. And in any case, given the demands of consolidating the two existing programs, it’s difficult to see the company rolling out a completely redesigned program until 2016, at the earliest.
At least for the time being, Alaska Airlines is also doubling down on its current mileage-based scheme.
According to an Alaska representative, “As other airlines move to revenue-based programs that have the potential of diluting the rewards earned for the average passenger, we are continuing to offer our same great mileage-based plan while increasing bonuses for customers who purchase our more flexible fares. Our customers tell us ours is the best loyalty program in the business and we plan to keep it that way.”
Those increased bonuses? The following class-of-service bonuses take effect from January 1, 2015:
- First class (F, P) mileage bonus increases from 50% to 75%
- Refundable coach (Y) increases from 25% to 50%
- Discounted coach (S) increases from 0% to 50%
- Discounted coach (B, M) increases from 0% to 25%
In addition to the class bonuses, Gold members of Alaska’s Mileage Plan program will see their elite bonus increase from 100 percent to 125 percent.
In essence, what Alaska has done is increase the mileage payout for those buying higher-priced tickets without penalizing the majority of flyers who fly discounted coach. In other words, they’ve better aligned rewards and revenue, as do the revenue-based schemes, while maintaining the solid value proposition represented by mileage-based programs.
With their new programs already in the pipeline, it’s too late for Delta and United to follow in Alaska’s footsteps. But American would do well to carefully consider Alaska’s move. It’s a lot easier to implement than a top-to-bottom program redesign, and it neatly threads the needle, rewarding high-value customers without disenfranchising the other 99 percent.
Reader Reality Check
Maybe this should be the new industry standard?
This article originally appeared on FrequentFlier.com.
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