Alaska Airlines Made a Costly Loyalty Mistake by Offering Too Many Free Seats
Photo Credit: Alaska Airlines was unusually generous with its loyalty program in the second quarter, and the move was costly to the carrier. Alaska Airlines
Skift Take
There's no doubt U.S. airlines are spooked by higher oil prices. By historical levels, they're not that bad. But perhaps they're catching carriers by surprise.
As frequent flyers know, U.S. airlines usually make available few free seats for loyalty program members during the busy summer season. And when do, they often jack up prices, so a flight that might ordinarily cost 12,500 miles could go for 30,000.
But Alaska Airlines customers this spring got an unusual benefit. After merging the Alaska and Virgin America reservations system in April, the combined airline mistakenly opened its award inventory, offering 40 percent more availability at the lowest levels than a year ago. And customers, including American Airlines' loyalists, who have access to free seats on Alaska, pounced on them.
It was enough to affect the carrier's second quarter earnings, executives admitted Thursday on Alaska's second quarter earnings call.
"We were way too open," said Andrew Harrison, the company's chief commericia
