Alaska Airlines Investor Day Insights

Alaska is a LCC? I've never perceived them as such. Do they refer to themselves as a LCC?

Given that the majority of Americans only travel domestic, it makes sense that less than 5% of award redemptions are on partner airlines.

It also shows why they can afford to be quite generous with some of their CX/EK redemptions. If more people were redeeming for international travel, I can see those International Partner redeptions being devalued!

Hm. I wonder what a similar pie chart would look like for United. If only 3.5% of Mileage Plus miles are redeemed for elite cabin awards on partners, why the massive increase in miles cost for these awards? Is there any reason to think the fraction is significantly greater over at Mileage Plus?

Is it just me or their first class seats look/are super old and uncomfortable? (I've never been on an Alaska plane.)

@Terry -- AS has the worst domestic F seats. Period. They have zero padding.

Any Mileage Plan member who does not have the Alaska CC is a bit foolish as its companion fare is probably the best deal of any CC.

Lucky, when you say "But the truly shocking part is that only 3.5% of miles are redeemed on all other carriers, including Cathay Pacific and Emirates."

Is that chart showing percentages of *redemptions* per carrier or percentages of *miles*? I'd assume redemptions just from looking at the picture, but I didn't look at the actual webcast. And since international partner redemptions are the most expensive ones, that could mean a higher percentage of miles are used on partners even though the number of bookings are fewer.

What chance of a future AA/US and AS tie up? The route networks seem to line up really well

@ TravelinWilly -- Sorry, I didn't phrase that well. I took out the word other from "other low cost carriers." They're benchmarking their costs compared to low cost carriers and legacies, so I shouldn't have had the word "other" in there.

@ Craig -- I wondered the same thing. If the latter I think we account for about half of the cards. 😀

@ snic -- That would be interesting indeed. My guess is that the percentage of partner redemptions on United is MUCH higher for many reasons:
-- United allows you to mix partners while Alaska doesn't. It really is a challenge to book an Alaska international partner award, whereby it can be incredibly rewarding if you know how to, but if you don't, it's a challenge.
-- Alaska only recently began allowing most partner redemptions on their website, and only recently began allowing one-ways on partners, both of which should increase the number of partner redemptions.
-- I would guess United's customer base is much more global/international. Alaska only flies domestically, so proportionally they probably attract more passengers that travel almost exclusively domestically vs. internationally.

So I would imagine at United the percentage of passengers redeeming on partner airlines is much, much, *much* higher.

@ Terry -- Not just you, it's among the most uncomfortable first class products out there, in my opinion.

@ Matt -- Interestingly it's as a percentage of flown segments by carrier. In other words, a roundtrip on Alaska from San Francisco to Seattle counts the same as a Cathay Pacific roundtrip from San Francisco to Hong Kong.

Interesting... I don't really think of Alaska miles as anything else but an easy way to Emirates F... I guess most people who redeem do not care about aspirational products.

@ Vik -- I think for Alaska there are two plausible long term scenarios:
-- They merge with Delta
-- They cut ties with Delta and increase their partnership with American

Both could work, but I don't think the current abusive relationship with Delta will last much longer.

What do you consider long term? as in the next couple years perhaps?

and knowing what we do now about partner redemptions do think the possibility of partner awards increasing substantially is unlikely since their not often redeemed for in the first place?

@ William -- I'd say long term is probably 2-5 years. My guess is that American and US Airways first want to get their merger figured out, and I wouldn't be surprised if after that they form a much closer partnership with Alaska (if Delta hasn't taken them over by then).

The low percentage of partner redemptions really took me by surprise. The fact that they did release award chart increases and they were only on their own metal suggests to me that maybe those are all the devaluations we'll see from them for now.

I'm not at all surprised by a million Alaska credit cards out there. Everyone in Seattle has one! Seriously, I used to work retail and saw that card more than any other by an order of magnitude (Hawaiian Airlines was the next most common...). I imagine Portland and all of Alaska are similar.

On the redemption front, I'm also not surprised at the low number of non-Delta/AA partner awards. Given that Alaska is not part of a branded alliance, I'd venture that the casual Alaska flier isn't even aware that you can use miles on KLM, Cathay Pacific, Emirates, etc. Alaska doesn't really advertise the option, at least that I've seen, so unless you're poking around the website looking for alternative ways to use your miles, you might not come across it. The partnerships with Delta and AA are much more visible.

I've perused their entire presentation. Like others, I was surprised at the low level of int'l redemptions. I've never used AS miles domestically and given all the talk amongst FT members, I really thought it would be higher.

@Lucky: Of the 2 scenarios you presented in #17 above, I think #2 is most plausible. Don't think the DOJ would allow a DL/AS tie up. And, nor would I, if I were King of the World. ;^)

Currently in Hawaii via nonstop flights for two (exit row seats) for $630 RT nonstop daytime flights with companion fare. CX is aspirational but this is doable and reasonable for average working folks with AS CC.

I wonder if it's b/c there are households like us who have 4 or just because they whore out their card on every flight?