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Alaska Airlines is getting a big boost from first class, Premium seats

Jan. 30, 2020
5 min read
Alaska Airlines is getting a big boost from first class, Premium seats
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Alaska Airlines wants to be the airline where travelers can still snag complimentary upgrades — or even afford first-class seats — all while keeping Wall Street happy.

The Seattle-based carrier saw revenues from its first-class and Premium Class economy seats rise by double-digits year-over-year in the fourth quarter, Alaska commercial chief Andrew Harrison said during a quarterly earnings call on Tuesday. Notably, premium revenues rose faster than the airline added premium seats to its fleet, an indicator of profitable growth.

“Our goal is to keep out premium cabins affordable, provide generous benefits to our loyalty members while competing effectively against our peers," Harrison said. He added that premium revenues are an "important contributor" to Alaska's earnings growth going forward.

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Alaska is far from alone in betting on premium dollars. Delta Air Lines, by far the leader in the segment, saw a nearly double-digit rise in premium- and loyalty-related revenues in 2019, and is seeing "increasing product affinity" from its business class and premium economy investments, according to executives.

United Airlines, for its part, is expanding domestic first class cabins on its Airbus A319s and A320s, and adding 50-seat Bombarder CRJ550s that have 10 first class seats to expand its premium offerings in smaller markets.

Alaska tries to differ its premium offerings from those of its competitors. For example, on lucrative transcontinental routes between New York and the West Coast, the airline paved its own trail eschewing the lie-flat first class seats offered by competitors for a new first-class recliner seat. However, it offers complimentary upgrades to its elite frequent fliers on the routes — something travel consultancy Atmosphere Research founder Henry Harteveldt has called a "prized" perk — that either are not offered or are hard to snag on competing nonstops by American, Delta, JetBlue Airways and United.

Related: Delta says passengers are spending big on its premium products

 

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Another way Alaska is boosting premium revenues is adding first-class seats to its jets. The airline had retrofitted roughly 60% of its 61 Airbus A319s and A320s with 12 first-class and 24 premium economy seats at the end of December. This represents four additional first class, and up to 12 additional premium economy seats on each aircraft.

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The first reconfigured A320 entered service in February.

Operating revenue at Alaska grew 6% year-over-year to $8.78 billion on a 65% increase to $1.06 billion in operating income in 2019. The airline achieved a pre-tax margin of 12%.

Featured image by An Alaska Airlines A320 at Washington Dulles International Airport. (Image by Edward Russell/TPG)

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Apply for American Express® Gold Card
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Best for the well-traveled foodie
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards Rate

4XEarn 4X Membership Rewards® Points at Restaurants, plus takeout and delivery in the U.S.
4XEarn 4X Membership Rewards® points at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X).
3XEarn 3X Membership Rewards® points on flights booked directly with airlines or on amextravel.com.
  • Intro Offer
    Earn 60,000 Membership Rewards® points after you spend $4,000 on eligible purchases with your new Card within the first 6 months of Card Membership.

    60,000 bonus points
  • Annual Fee

    $250
  • Recommended Credit
    Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

    670-850
    Excellent/Good

Why We Chose It

There's a lot to love about the Amex Gold card. It's been a fan favorite during the pandemic because of its fantastic rewards rate on restaurants (that includes takeout and delivery in the U.S.!) and U.S. supermarkets. If you're hitting the skies soon, you'll also earn bonus points on travel. Paired with up to $120 in Uber Cash (for U.S. Uber rides or Uber Eats orders) and up to $120 in annual dining statement credits at eligible partners, there's no reason that the foodie shouldn't add this card to their wallet. Enrollment required.

Pros

  • 4x on dining at restaurants and U.S. supermarkets (on the first $25,000 in purchases per calendar year; then 1x)
  • 3x on flights booked directly with the airline or with Amex Travel
  • Welcome bonus of 60,000 points after spending $4,000 in the first six months

Cons

  • Weak on travel outside of flights and everyday spending bonus categories
  • Not as useful for those living outside the U.S.
  • Some may have trouble using Uber/food credits
  • Few travel perks and protections
  • Earn 60,000 Membership Rewards® points after you spend $4,000 on eligible purchases with your new Card within the first 6 months of Card Membership.
  • Earn 4X Membership Rewards® Points at Restaurants, plus takeout and delivery in the U.S., and earn 4X Membership Rewards® points at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X).
  • Earn 3X Membership Rewards® points on flights booked directly with airlines or on amextravel.com.
  • $120 Uber Cash on Gold: Add your Gold Card to your Uber account and each month automatically get $10 in Uber Cash for Uber Eats orders or Uber rides in the U.S., totaling up to $120 per year.
  • $120 Dining Credit: Satisfy your cravings and earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, Milk Bar and select Shake Shack locations. Enrollment required.
  • Choose the color that suits your style. Gold or Rose Gold.
  • No Foreign Transaction Fees.
  • Annual Fee is $250.
  • Terms Apply.
  • See Rates & Fees