Alaska Airlines Changes Its Upgrade Policy as It Inches Towards a Revenue-Based Loyalty Program

Alaska Airlines, which operates one of the last mileage-based loyalty programs in the country, bowed to competitive pressure this week and took steps to include revenue-based components into MileagePlan.

The updates center around how elite members are upgraded on the airline. Traditionally, airline loyalty programs have upgraded frequent flyers based primarily on elite status; when space is available, highest level elite are upgraded first and then lower elites are upgraded as the cabin fills up. If two elite members have similar status, the person who booked the flight earliest has priority.

On flights booked starting on December 5, Alaska is changing that formula to also include the fare class into which the ticket was originally booked. Higher fare classes, for example a last-second ultra-expensive booking, will get higher priority than deeply-discounted tickets.

In this way, Alaska will start rewarding higher spenders with a better probability for upgrades, while budget travelers will be moved to the back of the line.

Tempering the announcement, Alaska also announced that it would start allowing upgrades on some award tickets, in near lock step with competitors like Delta.

Alaska's changes come on the heels of a spate of passenger-unfriendly, revenue-based augmentations to loyalty programs over the last three years. Just this August, American joined Delta and United by adding a revenue based component to its AAdvantage loyalty program, tying elite status and earned-frequent flyer miles to the cost of the ticket.

For its part, Alaska earned widespread respect for not following that path and for sticking to a distance-based program, landing at the top of many top loyalty program rankings.

These changes to Mileage Plan, however, may foreshadow a darker future for the program. Like American, which held off on large-scale loyalty program changes until its merger with US Airways was complete, Alaska may be waiting to fully integrate Virgin America before overhauling Mileage Plan. And if this trajectory continues, the last distance-based loyalty program in the country may be in jeopardy.