American and Alaska are partners again. The previously-announced March 1 breakup isn’t happening. Alaska Airlines is joining oneworld. And American will fly from Seattle to Bangalore, India (and Seattle – London).
Alaska And American’s Relationship Is Back On
The American Airlines – Alaska Airlines partnership had gotten downright cold. Alaska seemed pretty unhappy when the relationship between the two airlines started scaling back January 1, 2018. And it was only just October that the ability to use miles on each others’ flights was announced as ending March 1.
At the time American was claiming it wasn’t much of a benefit to AAdvantage members, because American had a 97% route overlap with Alaska and Alaska members redeemed for American travel far more than American members redeemed for Alaska travel.
Now less than five months later there’s a total reversal. Mileage redemption between the carriers won’t end after all. And the two carriers will be getting much closer, as partners in the oneworld alliance and as codeshare partners as well.
Alaska Is Joining The oneworld Alliance
In the fall of 2018 Alaska Airlines talked publicly for the first time about joining oneworld though they talked about a more modest Connect member.
Alaska, though, is now working towards full membership and it has American’s support. Officially joining will happen “by summer 2021” – and indeed it generally takes 18 months to join the alliance – but it sounds like they’ll be working diligently and the actually joining date could come earlier in 2021 if all goes as planned.
That will provide for earning and redemption across the oneworld alliance for Alaska Airlines members. Already Alaska partners with British Airways, Cathay Pacific, Japan Airlines, Finnair and Qantas. It will also provide some reciprocal status recognition like priority check-in and boarding and extra baggage allowance, along with lounge access.
It will also provide American AAdvantage members, and other oneworld members, mileage-earning and redemption on Alaska. Alaska flights will once again count towards American Arlines elite status.
American Will Start International Flying From Seattle
American will launch two new international routes from Seattle:
- Seattle – Bangalore beginning October 2020 using Boeing 787-9 aircraft
- Seattle – London Heathrow in March 2021 using Boeing 777-200 aircraft
American views London Heathrow as a hub thanks to their revenue-sharing joint venture with British Airways which currently operates two London – Seattle flights. It’s not clear to me whether this will be a third flight as part of the joint venture, or whether American will be taking over one of the British Airways frequencies.
The big news of course is American Airlines India service, which we haven’t seen since the airline ceased Chicago – Delhi service March 1, 2012. India is a challenging destination: American doesn’t have a connecting partner in India, so they’re relying largely on U.S. traffic looking to go to the city they serve. It requires a lot of expensive aircraft time. And fares to India have been low.
However there’s no non-stop service from the U.S. to Bangalore, but there is software business travel, and from most U.S. cities Bangalore takes two connections. Today American sells Bangalore travel only through their British Airways joint venture with a connection at London Heathrow.
A year ago American’s CEO Doug Parker told employees that executives have been talking more about India and by September it was absolute that American would fly to India. However I expected a flight from Dallas to Southern India, and I didn’t think it would happen until 2023 then they have planned to take new Boeing 787-9 aircraft.
I spoke to American’s Senior Vice President of Network Planning, Vasu Raja who offered that American has loved the idea of India and settled on Seattle because “Seattle – Bangalore is the only U.S. market [they] can truly make work with a reasonable payload.”
What Drove The American-Alaska Rapprochement?
I asked Vasu Raja what brought about the Alaska codesharing relationship and the new international routes from Seattle. He suggested that as they were “winding down” the relationship with Alaska, executives on both sides “looked at it and said, …forget the historical way both companies have done business and let’s look at through the lens of both [companies’] customers.”
This move is clearly good for someone like me in Austin who flies American regularly, but also uses Alaska’s network occasionally to get to San Francisco and to Seattle (foregoing American through Dallas). My in-laws are from a town that’s only served by Alaska’s regional subsidiary Horizon Air. It’s nice to earn elite qualifying miles and have status recognition when I take those flights.
And it’s good for the airlines – Alaska has a great regional operation in the Pacific Northwest, and has very loyal customers, but doesn’t have long haul international flying. That’s why they’ve partnered with so many varied airlines. More international service to offer their customers helps keep Alaska customers from straying over to Delta which has built a large Seattle operation. Heavy flyers out of Seattle need a big route network in order to stay loyal
Raja explains that “If this is amazing for customers, we had to figure out how to make it amazing for shareholders. All sides had a true north approach of forget past, figure out how to deliver something amazing for customers.”
Since my understanding is that Alaska hadn’t been happy to lose the partnership, my theory is they offered something lucrative to American to expand it. Seattle – Bangalore is an interesting route to start with, but there are big tech companies in Seattle like Amazon and Microsoft that do a lot of business with Alaska and Bangalore offers American an in with Alaska’s big corporate customers.
Meanwhile American’s codesharing with Alaska will go beyond just Seattle. They plan to pair Alaska flights to Los Angeles with their international route network, and Vasu Raja specifically called out how the LAX partnership “will help with [American’s new flight to] Christchurch” and that they “could extend seasons of [seasonal] flights” and that while “Los Angeles – Europe works but connectivity from Alaska will help.”
What Does Seattle International Flying Mean For American’s Network Strategy
American is fixing some of the problems with their domestic first class and looking at a new international business class product. They’re building up their premium offerings, and seem to be getting much more aggressive with new routes.
American is launching Dallas – Auckland and Los Angeles – Christchurch. They’re trying non-hub routes from Austin and building up Boston. That’s on top of new flights to Tel Aviv and Casablanca (their first foray into Africa).
This seems to be a very different American Airlines from the one that shied away from competition and retrenched back only to its hubs and eschewed ultra long haul flying. I asked Vasu Raja what had changed.
Over last several months to year or two the airline business has changed so much. For years and years it was struggle to survive then to merge then to do integration. [We have] profitable organic growth opportunities in every hub. It’s greater in place like Charlotte than in other places but no less significant.
For a long time we’ve talked about..opportunities to go fly longer and longer haul. When we first talked about India people thought it was nuts because we were taking out [flying from Chicago to] China. But if true north is if our customers want it, the job of the airline is to figure out how to go and deliver at a quality that makes sense and a profitability that makes sense for shareholders.
…What you see is slow evolution rather than sudden change, starting with increasing long haul, started Prague, Dubrovnik, seasonally but they started working, we extended seasons more and …expanded Prague to Chicago. Tel Aviv was the most asked for market among top customers. We figured out a way to do it from Dallas Fort-Worth. From bookings coming in, we’re optimistic.
…That brings us to a deal with Alaska. We have an amazing network for customers outside of West Coast big 5 cities. Alaska has an amazing network within those big 5 cities on the West Coast. ..Alaska has as many flights in Seattle as American has in Miami but doesn’t have international and is not seamless with anybody. They can have elite reciprocity from oneworld, by adding American flights long haul they can sell to corporate and high value travelers the best way to get to India. For American and American customers there are 70 destinations we can connect to India via Seattle.
American is being more aggressive with routes and they’ve done a 180 on partnering with Alaska. Raja mentions corporate contracts, no doubt access to Alaska’s big hometown corporate customers is a part of this. Whatever the economics, this looks like a win for customers. If there’s a downside here, it’s that Alaska’s clubs in Seattle are about to get even more busy.
Wow, this is huge and what a change in attitude by both airlines.
Not sure how I feel about my existing miles with AS though..
My first question is whether Alaska will revise its award charts upon joining Oneworld. Would it try to have a uniform award chart for all alliance member airlines? If so, there could be some serious devaluation of AS miles.
Now it they could just get LATAM back….
Step One toward an eventual merger.
@ Gary — Any idea if reciprocal crediting of flights will be restarted shortly? They did it before, so it seems they should be able to do it quickly.
@ Tony — Of course. It will be a bloodbath.
@Gene – no specific date but it should happen within months not wait for oneworld
@Andrew R – if they were going to merge you’d think they’d try to do it quickly given the risk of turnover in the administration (if a democrat wins the white house they’d have a much harder time with anti-trust). further, it would be tough for aa to do a deal with its stock price so low, they’d have to give up too much of the company and have too much debt to do a deal with cash.
You now have 18 months to enjoy Alaska’s generous Mileage Plan before American and oneworld destroy it.
Of course there are lots of UNANSWERED questions…
@Gary —> Obviously not all the specific details have been released, or (possibly) even agreed to, but the biggest question I have is re: the airlines AS *currently* partners with which are NOT part of the oneworld alliance…Condor, El Al, Emirates, Fiji, Hainan, Icelandair, Korean, and Singapore. Some of these are, speaking strictly personally, “who cares?” but others…well, it’s potentially a different story. For instance, I’m flying EK later this year using AS miles. I know my tickets will be honored, but in the future, this option will be closed to me — Qatar can take up some of the slack, but Singapore? Korean? (And let’s not forget that great deal Alaska recently offered on Fiji.) Also, LATAM partners with AS independently from oneworld; if AS joins, and LATAM is out, that’s one more option lost to Alaska flyers.
@Tony —> All points get devalued — when was the last time points ever went UP? — so yes, I’d expect a devaluation as well. We can only hope that @Gene is wrong about it being a bloodbath. Fortunately, I just burned through a ton of AS miles, so hopefully it won’t “hurt” as much as it could have.
@Andrew In the FWIW Dept., I agree with Gary re: any outright AA/AS merger; have to do it while the current occupant of the Oval Office is sitting there.
Gary, I don’t understand the comment from you (and others who’ve written about this already), that if AA-AS were to merge they should do it while Democrats are out of the White House. The AA-US merger was approved under Obama (!) and an AA-AS merger is tiny in comparison. I think the real impediment is your second reason, that AA can’t afford it.
Big and on balance good news, I think. But I’m very curious as to what this will mean for whether Alaska will retain a mileage-based program and possible (or should I say almost certain?) devaluation.
So when does Vasu Raja become CEO?
As a WAS flyer this is interesting news. Does this mean I can earn AA EQMs on AS flights between WAS and SFO? If so, when? Once AS becomes past of oneworld or sooner?
Thanks!
@Nun – Obama isn’t the current front runner for the Democrat presidential candidate in 2020. Sanders is.
AA should use SEA as a hub for its West Coast India flights. They could fly from SEA to HYD, BOM, DEL etc and if they came up with a smooth way to change planes where necessary they could suck up a lot of SFO/LAX traffic into India.
@Et it will mean that, yes, in a s few months
@Nue – a Trump justice department and DOT will be friendlier to the merger. Remember that the Obama justice department opposed the AA-US merger and even went to court to stop it but eventually settled for a pittance because they had a weak case. And Obama’s Justice Department seems unlikely to be similar to what we’d get under a Sanders or Warren administration (say) given their emphasis on anti-trust enforcement.
@Jason – we don’t know whether Alaska will drop current partners, and there may be limits on partnering outside of oneworld, but there *are* oneworld airlines partnering with Star airlines (eg Malaysia/Singapore, Cathay/Air Canada). And American partners outside of oneworld (eg Etihad, Air Tahiti Nui).
As someone who moved from UA to AS after countless devaluations I have a sense this will be good short term and not good long term.
Ah, the war for Seattle between Alaska and Delta carries on. It seemed to me that Alaska had lost a battle with Delta when Alaska lost Flyingblue and then AA partners. Maybe the LATAM/Delta deal pushed AA back just enough for some payback. Besides, it’s a good fit overall.
Oh and 18 months. That might have been acceptable in 1990 but times move faster now. That is way too long I think.
Thanks, Gary. I had understood that AS offered AA codehsares only on certain routes (and WAS-SFO wasn’t included), but hoping that with this new expanded codeshare, it will be included and i can start flying that before they officially join OW.
Bad news for us long time AS flyers certainly award charts will be adjusted to meet OW’s , AA is terrible and will continue to be as long as Parker or his disciples are in power. AS elites will possibly suffer especially us MM flyers in the OW scheme.
Merger thats been rumored for a long long time and yes Gary if it were to happen now rather than with a democratic administration but as you pointed out stock price is down will continue to stay there here until there is new leadership is in play. AA service is dismal, planes are as well.
Something happened that we don’t know about (yet) to make this happen. I am not buying this “we looked at it and maybe disengagement is not such a great idea” just not.
For the record I would have preferred Sky Team
@Gary: Why don’t these allowances allow complete fungability of miles between programs?
Background: During the Obama Administration, the Wall Street Journal (WSJ) ran a series of articles about Obama’s Department of Justice (ODOJ). The ODOJ would sue banks for billions for misconduct during previous administrations. Some of the lawsuits were based on subsidiaries that the banks had been forced to purchase as part of the solution to the 2007-2008 financial crisis. Then the ODOJ would quietly go to the sued banks and tell them that they would reduce the fine amount by billions if the banks would donate to Obama affiliated charities (which by the way were active in liberal politics). Which of course the banks did saving their shareholders billions. [By the by, bank executives usually are required by internal policies to own significant amounts in their own bank stocks, to align their interests with the interests of the shareholders.] The banking system was like a gigantic piggy bank for the Obama Administration for left wing causes.
Segue to the AA-US merger, a leopard cannot change its spots. It would have been nice had the ODOJ made a principled stand against the merger. They could have delayed the merger for years, even if, as Gary asserts, the case was weak. However, I suspect the ODOJ was against it initially, until the coffers of affiliated charities were filled, then they stepped aside. To paraphrase the former Democratic Governor of Illinois Rod Blagojevich, mergers are not free.
Moreover, people tend to be naïve about government investigations in general. McCain, a Republican, was a typical example. He famously was a senior member of committees that investigated the defense contractors. They would open up investigations. After McCain’s associated groups coffers were filled up with donations from defense contractors, McCain made the investigations go away. Rinse and repeat. That is how you become a Saint in government now-a-days. It is bi-partisan corruption and disgusting.
Gary’s statement that “if a democrat wins the white house they’d have a much harder time with anti-trust” is naïve, in my opinion. To get a merger approved, you just have to pay off the right people.
Gary’s further statef: “And Obama’s Justice Department seems unlikely to be similar to what we’d get under a Sanders or Warren administration (say) given their emphasis on anti-trust enforcement.” This is a major stretch, since we have no idea who Sanders or Warren would appoint to senior positions of their administrations. Moreover, following the Democratic primary, Warren (to my surprise, since I thought she was going to be the Democratic candidate) is fading rapidly. Sanders is now the frontrunner; however, I am guessing the Democratic Party will steal the democratic nomination from Sanders again, as they did for Hillary in 2016.
AA and Alaska strengthening their Partnership (originating over 40 years ago as One of the First Airline Interchanges as they were Called) and Alaska Joining ONEWORLD completely makes sense. I do NOT know enough about the India Market from SEA and what the demand May be but IF they feel it could succeed, Bring It On.Alaska will certainly broaden AA’s presence in the Pacific Northwest and Alaska, AA will help Alaska on Transcon flying where more than likely Widebody aircraft could be added, which would be Good for Consumers. For people stating This Move by AA is retaliation against Delta over stealing LATAM…get Over Yourselves. LATAM is garbage and went panhandling for a Bailout to not Only AA, but BA,IAG and ONEWORLD after they found their JV would not get approved. LATAM basically prostituted themselves to Delta and They (Delta) decided giving Them Funding, Taking Surplus Aircraft and Paying their Exit Fee to Leave ONEWORLD was worth it……funny thing Is….NONE of the ONEWORLD Carriers felt LATAM was worth Saving. FACT.
Love me some Vasu Raja! That dude has marbles. Really hope they let him continue to “explore the space.” I’d love to see him in contention for CEO one day.
Gary, any word on whether or not Vasu is on the golden path, or his he always going to be a supporting player?
Why would this necessarily result in harmonization of award charts? There are different award charts and earnings rules across OneWorld. Nobody can direct AS to change their award charts; that would be illegal collusion.
Does this mean I can now use the Boardroom Lounge with any BP (since I am lifetime with AA)
Currently Alaska MP partner awards are only possible on routes which start, end, or transit the US. If they are serious about joining OW this outdated restriction will have to go. I imagine it will involve some upheaval of their IT platforms, but this is well overdue anyway.
Would be welcome too if OW insisted they rein in their blizzard of fake and deceptive mixed cabin Business and F awards which currently pad out their award inventory to bursting point.
If Alaska is serious about being an enthusiastic OW member a big mindset change is needed which is probably outside the comfort zone of most of the current management.
This is good news. AA management is feeling the heat, finally, or maybe the road block is now gone. An AA AS merger is a very long shot under any administration that follows the rules of anti-trust law. The U.S. airline industry is an oligopoly as is. Merging AA and AS increases industry concentration significantly. And airlines can no longer argue that mergers are necessary to allow airlines to earn profits.
I couldn’t be more excited to share with you that we are partnering with American Airlines to create a West Coast International Alliance—connecting our network to the rest of the world in a remarkable way. Our Global Partners have always provided guests with the opportunity to go global, but today, we are proud to strengthen our relationship with American Airlines, and in Summer 2021, plan to join the oneworld® alliance. This means traveling on Alaska, American or a oneworld partner will feel like one connected travel experience—no matter who or where you fly.
So what does this mean for you?
Effective immediately:
• Redeem Alaska Mileage Plan™ miles on all American Airlines flights.
• Access any of American’s 50 Admirals Club locations worldwide with an Alaska Lounge membership.
• Continue to earn and redeem Alaska Mileage Plan miles on our current portfolio of 16 Global Partners.
Starting Spring 2020:
• Earn Alaska Mileage Plan miles on any American Airlines flights, domestically and internationally.
Starting Summer 2021:
• Earn and redeem Alaska Mileage Plan miles on all oneworld airlines.
• Alaska elites will enjoy privileges, including priority boarding, premium seating, baggage benefits and more when you fly on American Airlines or any oneworld airline.
• Access 650 lounges within the oneworld network as an MVP Gold or Gold 75K member.
We will share more details with you as these benefits become available.
We are honored that you trust us with your travel needs. On behalf of Alaska and our 23,000 employees who work tirelessly to deliver their best to you every day, thanks for flying with us.
Andrew Harrison
Chief Commercial Officer
This is an Alaska mileage plan email I just sent.
Retaliation at Delta for taking LATAM. DL is entering AA’s MIA backyard, so it looks like AA is entering DL’s back yard in SEA. Competition is nice! Dare I say this is a win for everyone? Could it be?
To be clear, AS miles could always be used on AA flights *leaving* the country, or coming back. In December, we flew AS from SFO-LAX, then AA LAX-MIA-GCM; GCM-CTL-SFO return, all on AA using AS miles on a single reservation. What you could NOT do — as I understood it — is fly AA domestically…
More questions…as I’m sure there will be from now (to Infinity and Beyond…)
For one thing, according to the email which @Michael Queens reprinted above…
“Effective immediately:
• Access any of American’s 50 Admirals Club locations worldwide with an Alaska Lounge membership.” (Although we STILL cannot access the AA lounge @ SFO!)
But then, there is this:
“Starting Summer 2021:
• Access 650 lounges within the oneworld network as an MVP Gold or Gold 75K member.”
Does this mean that I no longer have to pay for a Lounge membership as long as I’m MVP Gold or higher? And does my membership allow me to bring a guest’s it does on AS, or is AA going to make my wife wait outside? (AA might, but I wouldn’t…)
/\/\/\/\/\
“Starting Spring 2020:
• Earn Alaska Mileage Plan miles on any American Airlines flights, domestically and internationally.
Starting Summer 2021:
• Earn and redeem Alaska Mileage Plan miles on all oneworld airlines.”
Do we earn Alaska miles based upon miles flown? according to some convoluted formula involving how much we paid for the ticket? and what of bonus miles for having elite status?
And so on and so on and so on….
GREAT NEWS!
ONE WORLD GET EVEN BETTER!
THANK YOU AA AND ALASKA AIRLINES!
I see this as nothing less than AS admitting that the Virgin America merger was a failure, and this is how they save face. Effectively, I see AS just becoming a regional AA partner… There is no way AA allows a new true competitor to come into OW unless they come out as winners.
@joelfreak: What are their load factors to/from DAL?
I have flown over 2 million miles on American and they treat me like an nasty fungal infection that they can’t get rid of. So much for Customer & Brand loyalty .
Thomas Theodore Patton
Tampa , Fl. 34606
@Thomas Pattern: If that 2m miles is over 40 years then you have been Platinum each year. So you are one of their most loyal customers. Likely in the top 1%. What do their customer service people say and what do they do when you complain about specific incidents? And do they see their performance as a failing grade?