Alaska Airlines Leverages Virgin America Acquisition to Compete Aggressively on Loyalty

Back in 2015 and 2016 when legacy U.S. air carriers moved to revenue-based loyalty programs, Alaska Airlines made much ado about keeping its traditional, distance-based program. Now, the airline is using that program as well as some aggressive marketing to lure in more loyalty program members.

The incentives started in early March when Alaska launched a promotion to boost elite status for passengers flying on select transcontinental routes. For passengers flying out of four Californian hubs and to a handful of East Coast destinations, the promotion offers low-level elite status in Alaska’s Mileage Plan loyalty program after only two round-trip flights. Mid-level Gold status can be earned after only four journeys.

Typically, low level elite status in Mileage Plan is earned after flying 20,000 miles while Gold status is earned after flying 40,000. A typical transcontinental flight in the United States earns around 5,000 miles, so through this promotion, Alaska is basically cutting the requirements for earning elite status in half.

The elite status promotion is slated to run through the end of May, 2019, but before its conclusion, Alaska has already launched an additional promotion offering double miles for all Mileage Plan members. That promotion runs from April 1 through the end of the year and is only good for award (not elite-qualifying) miles on select transcontinental routes.

Alaska also specifically calls out its distanced-based loyalty program in its new promotion, saying “since Mileage Plan members earn by distance, not by the dollar, this double miles offer gets you closer to sweet rewards, faster.” Additionally, both promotions appear to be stackable, or applicable at the same time.

Increased Pressure on Transcontinental players

Alaska’s aggressive marketing approach seems to be building off of momentum captured in its recent acquisition of San Francisco-based Virgin America. After a brief period of alignment between the two carriers, Alaska has been quick to start leveraging Virgin America’s old network and compete with other players on a host of transcontinental routes.

Early this year, Alaska unveiled the cabin design and branding of its new unified product, an upgrade that will faster align the brands and convert customers to the new experience. The carrier has also been quick to cozy up to potential passengers in California, a market once popular across the Virgin America network.

Among the aircraft updates, the stronger route network and the marketing, Alaska now appears to be better equipped to compete with American, Delta, United, and JetBlue on the handful of transcontinental routes that drive premium revenue for air carriers. And with a spate of new promotions behind Mileage Plan, frequent flyers have a strong incentive to get onboard.