Why the Alaska-Hawaiian merger could be a win-win for frequent flyers
In case you missed it, Alaska Airlines announced Sunday that it has reached an agreement to acquire Hawaiian Airlines for $1.9 billion.
The two carriers tout expanded access across the U.S. (and the globe) as one of the key synergies of the merger. The combined airline would be based in Seattle and would be better positioned to compete against the larger U.S. airlines, Alaska and Hawaiian said.
Assuming that the merger goes through — a big if, given the Department of Justice's current anti-consolidation stance — Alaska has plans to keep the Hawaiian brand separate but integrate the carrier's operations onto a single operating certificate and merge the Mileage Plan and HawaiianMiles loyalty programs into one.
It's that last point that's perhaps most interesting for frequent flyers — and here's why.
Hawaiian to join Oneworld alliance
As part of the merger, Alaska plans to bring Hawaiian into the Oneworld airline alliance.
Until now, Hawaiian has partnered with individual airlines on a one-off basis without formally joining any of the major airline alliances.
But if Hawaiian joins Oneworld, many more frequent flyers will have access to perks on Hawaiian, as well as the ability to earn and redeem miles with the carrier.
Oneworld membership means that travelers with elite status with any of the 13 Oneworld member airlines will enjoy a (limited) set of perks when flying with Hawaiian, such as priority check-in and security.
Elite members in the HawaiianMiles program will also be matched to an equivalent tier in the combined program. Not only will these members enjoy expanded perks across both carriers, but they'll also have access to benefits when flying across the Oneworld alliance.
"We're going to look at all the tier statuses and ... our statuses and we're going to match them," said Alaska CEO Ben Minicucci at a press conference Sunday.
As part of Hawaiian joining Oneworld, many more travelers will have access to award seats on Hawaiian using their respective miles. This should be particularly exciting for American Airlines flyers, who can already book select Hawaiian flights with AAdvantage miles. (The American-Hawaiian tie-up excludes award flights to the continental U.S.)
Assuming that the merger goes through, that restriction will likely be dropped. Of course, there's no telling how many award seats Alaska will release, but more options to book flights with miles are certainly better than fewer.
HawaiianMiles gets more valuable
HawaiianMiles is a niche frequent flyer program. Though HawiianMiles partners with American Express Membership Rewards, Bilt Rewards and Marriott Bonvoy for point transfers, most travelers will only find value in the program for a trip to Hawaii or perhaps an upgrade to a premium cabin.
But with the merger, HawaiianMiles members will have many more ways to redeem their miles (in addition to the expanded set of elite perks mentioned above).
"Hawaiian's member base includes significant loyalty amongst residents of Hawaii, all of whom will enjoy the increased attractiveness and utility of our combined network, as well as the entire suite of our airline partners, including access to seamless travel and redemption across Oneworld," said Alaska chief financial officer Shane Tackett on Sunday.
It isn't immediately clear how Alaska will integrate HawaiianMiles balances into the new, merged program, so I wouldn't speculatively transfer any points (just yet) to Hawaiian in the hopes of getting more value from the points in the future.
It also isn't clear if Hawaiian will maintain its partnerships with Amex, Bilt and Marriott if the merger goes through and a combined loyalty program prevails, but one can certainly hope.
That said, if there's one group of loyalists that might be disappointed with the news, it's those based in Hawaii who primarily fly and redeem miles with Hawaiian. Earning top-tier Hawaiian Pualani Platinum elite status requires just 40,000 miles a year — a far cry from the 100,000 required to hit Alaska's MVP Gold 100K status.
It remains to be seen how Alaska will map Pualani elite status to the new program, but I'd expect some perks, like upgrades, to be harder to come by. (After all, the pool of elite members will no doubt be larger under the combined program.)
Additionally, Pualani elite members and those with Hawaiian cobranded credit cards currently receive a discount on some mileage redemptions, so if the combined program drops this perk, these travelers might receive less value from their miles going forward.
MileagePlan expands global reach
Over the years, Alaska has tried to use its Mileage Plan loyalty program to woo travelers into the airline's ecosystem.
Despite being a primarily West Coast carrier, Mileage Plan currently has 29 partners worldwide, allowing you to earn and redeem miles (and enjoy perks) on a large group of airlines.
Joining Oneworld in 2021 helped Alaska expand its global reach, and the Hawaiian acquisition would only further grow the airline's appeal to loyalty members beyond those who frequently travel with Alaska.
Alaska hasn't said if the Mileage Plan program will remain after the merger or whether the carrier will instead change the name of the program to better reflect the combined airlines.
"We'll have a dual brand but the one platform that's going to be the same loyalty program. So think of something like Marriott Bonvoy. You're part of Marriott Bonvoy, but you could stay in different hotels under this house of brands. So that's how we're thinking about it, that the loyalty program will be that common platform," said Minicucci.
Regardless of which option Alaska chooses, Mileage Plan members will have access to more seats and benefits than before. Let's just hope the airline doesn't gut its award charts or change the value of its points as part of the acquisition.
Bottom line
The proposed Alaska-Hawaiian merger should bring a slew of benefits to loyalty members of both airlines.
Hawaiian flyers will enjoy the perks of Oneworld membership and a long list of new airline partners for earning and redeeming miles. Alaska travelers will gain access to mileage-earning and redemption opportunities on Hawaiian flights.
And, of course, Alaska Airlines will enjoy access to a new segment of travelers who might be interested in signing up for a cobranded credit card in the combined loyalty program. It's no surprise then that these synergies are being touted as one of the key upsides of the acquisition.
"The second significant synergy category is loyalty, where we expect to achieve $85 million in run-rate synergies," said Tackett on Sunday.
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