Airlines

Why Alaska why?

EDIT: Alaska has published an FAQ about the devaluation. TL;DR version- the devaluation is because of evil travel hackers, they were unable to give prior notice for this devaluation “given the dynamics of this particular award” but the policy remains to give 30 days notice of significant program changes “when at all possible”. If you bought miles on or before 1 March you can get a refund.

I was very excited to find out about Alaska Airline’s MileagePlan because it offered the opportunity to get cheap Cathay Pacific and Emirates premium cabin awards.

In the comments on that article, Jeriel asked me whether I’d be comfortable buying the miles speculatively. I said yes. After all, this is a reputable American airline, with due process and consumer rights and manifest destiny blah blah. There’s no way they’d do anything sneaky.

So of course they did.

The day the Mileageplan 40% bonus miles sale ended, Alaska Airlines did an unannounced devaluation of its Emirates award chart.  Recall that the original redemption rates for flights between North America and Asia were as follows

emirates

Revised award chart

Class of Service Region One-Way
Award Level
Round-Trip
Award Level
Economy Between North America and Asia 52,500 105,000
Business Between North America and Asia 105,000 210,000
First Between North America and Asia 180,000 360,000

Let’s ignore business because no one wants to fly Emirates business anyway. Everyone knows the reason you buy MileagePlan miles is to try out Emirate’s First Class product. And the number of miles needed to buy a one-way First Class ticket just increased 80%.


Assuming you buy your miles at 2.11 US cents per mile, that means an additional US$1,688 to the cost of your Emirates first class award ticket! The total cost of a one-way first class ticket is now US$3,798. Still a bargain, but an 80% increase in the cost, overnight, without warning is unconscionable behavior.

I think what annoys me the most about this is the timing- the devaluation is large, unannounced and takes place immediately after a miles sale which explicitly encourages people to buy as many miles as they can.

Unfortunately, there is little recourse that consumers have here. Airline FFPs are not regulated, and even though your miles are akin to a currency, they are not governed by the rules of fiat currency. So even though it’s hard to see this as anything other than a bait and switch, the most we can do is shake our heads and vow never to be cheated again. In a way, I’m relieved that I only wrote about the MileagePlan sale when it was too late to participate in the current sale (account needs to be open for 14 days before you can buy mile) because I’d hate for anyone to, relying on my advice, buy the miles and end up in a loss position.

This behavior does make me concerned about holding MileagePlan miles speculatively, and I do wonder about the future of Cathay awards. I imagine Alaska will take some serious heat for this, and maybe they’ll back down and allow a window for some redemptions to be done at the old rates. Who knows. What I do know is that it’s always buyer beware when it comes to buying miles, so earn and burn, not hold, is the rule of the game.

If you were thinking of getting onboard with MileagePlan, I’d only encourage you to do it if you already have a definite redemption in mind

cover photo by insapphowetrust

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6 Comments on "Why Alaska why?"

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Looks like the sitting on the plan helped avoid a near disaster to my wallet at this for this time round. I was very tempted up to the last min due to the promotions they kept sending to my email.

Sorry I jinxed it!! Looks like the shower dream just went *poof*

Some ppl are blaming Sam Huang who publicizes his travel hacking widely. I think he makes money off the traffic of his site. I pray SQ doesn’t devalue on the back of it’s premium economy. Totally enjoyed my business overnight flight to Melbourne