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Hawaiian Airlines' merger with Alaska Airlines was unprecedented. Not unprecedented because it was allowed to happen, but because it couldn't have happened without both carriers signing on to a U.S. Department of Transportation (DOT) mandated list of demands.
Couched in this agreement/list of demands are several points explaining how the combined airline is to serve the people of Hawaii and provide an adequate level of customer service. But among the demands is one more thing that's the most pertinent to AwardWallet readers: The joint loyalty program is to build on the benefits of HawaiianMiles and Alaska Mileage Plan — and “provide even greater value to consumers.”
For the merger to become “Facebook official,” both airlines signed on the agreement's dotted line. Literally.
Four short days after signing the agreement, the DOT let the Alaska-Hawaiian merger close. A mere 28 days after that, Mileage Plan shared a list of changes that it's already in the process of rolling out. But all that glitters isn't gold. There are a lot of negative changes coming to Mileage Plan, which made us (and several readers) ask: How is this even allowed?
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What’s Changing With Alaska Airlines Mileage Plan?
To be clear, there are a lot of good things coming to Alaska Airlines Mileage Plan between now and next year. Starting January 1, 2025, Alaska will offer elite status credits on award travel, let you collect milestone rewards, and more. The airline is also reordering the upgrade waitlist — for better or worse.
A lot of these changes are things we're excited about, but allow us to be the Debbie Downer for a minute. Take a look at the negative changes coming to Alaska Mileage Plan:
- Alaska is dropping elite status bonus by up to half of current rates (e.g., 25% bonus miles for MVP elites vs. the current 50% elite bonus)
- Mileage Plan is eliminating the 50K mileage bonus for MVP Gold 75K elites.
- No more Alaska Lounge passes tied to MVP Gold 75K.
- Fewer free checked bags for MVP and Oneworld Ruby elites.
- The Alaska Lounge discount is going away.
And there's one more thing. Alaska will “simplify” how you earn miles with its partner airlines. But like everything, the devil is in the details. Alaska is making some fare classes more rewarding if you book through its website, but drastically cutting the miles you'll earn if you book through a partner website — by up to 75%.
The Alaska-Hawaiian Merger Is Supposed To Protect the Traveling Public’s Best Interests
We'll admit some of this sounds nit-picky, but try this on for size. On September 17, 2024, the U.S. DOT shared a press release touting the agreement it made both Alaska and Hawaiian sign. Contained in there was a line we found particularly interesting: “Our top priority is protecting the traveling public’s interest in this merger.”
Arguably, throwing a sizable list of negative changes at Mileage Plan members less than a month after agreeing to protect the program's value is a bit rich. At best, Alaska Airlines knows the changes will only impact a few Mileage Plan members. At worst, shareholders, loyalty program members, and regulatory agencies were misled to think Alaska wouldn't institute cost-saving measures after spending $1.9 billion on Hawaiian Airlines. Stripping elite benefits is an easy way to accomplish that.
Do negative changes protect the traveling public's interest? Surely they don't. And we know this to be true because the DOT is in the process of investigating negative changes to other frequent flyer programs. But here's the fundamental question: do these negative changes actually violate the merger agreement?
Do the Negative Mileage Plan Changes Violate the DOT’s Merger Agreement?
The Alaska-Hawaiian-DOT agreement is a public document — although a few lines and values are redacted. This agreement is to remain in effect for six years from the close of the merger, which officially happened on September 18, 2024.
Miles
The primary focus of the loyalty program-related content of the agreement is that Alaska Airlines needs to protect the value of HawaiianMiles. These miles aren't allowed to expire or be devalued.
The combined miles must also hold a specific level of value when redeemed on flights operated by the combined carrier. Unfortunately, we don't know what this value is because that part is redacted.
The agreement continues by saying that Alaska must convert HawaiianMiles to Mileage Plan miles 1:1 and continue to award them “at the same or greater value.”
That last part is a little tricky. Alaska will award them at the same or greater value if you book direct, but only in certain fare classes. If you book elsewhere (like through American Airlines), you'll earn up to 75% less. This is a rather unfortunate gray area that the DOT didn't directly require when it crafted the original agreement.
Elite benefits
Regarding elite benefits, Alaska must match HawaiianMiles members' statuses into an equivalent Mileage Plan elite tier and offer the same (or greater) benefits.
But here's the kicker. This requirement stretches until the end of the program year, which coincidentally ends on December 31, 2024. To refresh your memory, most of the negative changes to Mileage Plan's elite benefits are rolling out a day later. That's when elite bonuses are getting devalued, perks and discounts are going away. Although Alaska is waiting until 2026 to halve Oneworld Ruby-equivalent checked bag allowance.
By keeping things mostly as-is through the end of the year, Alaska Airlines appears to be holding up its end of the deal. But is this a shady way to do it? Absolutely.
DOT Confirms That It's Reviewing Negative Mileage Plan Changes
If one thing is clear, Alaska Airlines' announcement of Mileage Plan changes came at an awkward time. Not even a month prior, the U.S. Department of Transportation had just issued a press release championing how this merger would protect the traveling public's best interest.
Are substantial cuts to elite benefits and earnings in the public's best interest? We don't think so. But before we even began speculating about whether these negative changes violated the merger agreement, we reached out to the U.S. Department of Transportation to ask three simple questions:
- Will the DOT investigate these negative changes?
- Was the DOT aware of these intended negative changes before the merger was approved?
- If the DOT was unaware of these negative changes, will it prevent them from rolling out on January 1, 2025?
On Friday afternoon, the U.S. Department of Transportation responded with a confirmation that it's reviewing Alaska's announced program changes:
DOT is closely reviewing all changes to Alaska’s rewards program to assess compliance with the terms under the merger agreement.
Our Take
Alaska trumpeted the positives when rolling out its Mileage Plan changes, remaining quiet or even spinning negative changes (e.g., “simplifying” partner earning rates). Most other publications happily parroted these talking points. It took us digging into Alaska's website to find any reference to slashed elite status bonuses and elite perks.
While travelers are likely numb to airline program devaluations, these negative changes come as a slap in the face right following the DOT announcement of customer protections when approving the Alaska-Hawaiian merger.
Our hope is that the U.S. Department of Transportation will challenge the negative aspects of the Alaska Mileage Plan program changes. Otherwise, the press release championing customer protections when approving the merger comes across as just smoke and mirrors.
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