Alaska Airlines sort-of Apologizes for Saver Fares

Basic Economy, Saver Fare, Spirit Airlines… no matter how you want to call it, the airlines are moving towards a lower, more a la carte piecemeal approach to tickets. Alaska Airlines rolled out their Saver Fares late last year, much to the anger of their loyal fan base.

Saver Fares (or Basic Economy fares) are the airline’s way to try and capture the passenger that doesn’t care about the benefits that normal airline travelers care about. All they want is a seat on a plane that will get them from A to B. They don’t care about upgrades, bag fees, overhead bin space, cancellations, or anything. Basically, they want Spirit Airlines without the … well … Spirit Airlines.

Spirit Airlines Plane, from the Consumerist

Today 75k members (and I suppose most of the other mileage plan members) got an email from Andrew Harrison, the Executive Vice President of Alaska Airlines. In short, he apologized for the rollout and how it was handled. The full email is below:

I am writing today to talk with you about Saver fares, which is a new product Alaska Airlines recently launched. Many of you have written or called us asking for a better understanding of the rationale behind this decision, and I’d like to provide some context for why we launched a new fare class with fewer benefits than other Alaska Airlines products.
 
Saver fares are designed for a specific type of traveler – one who prioritizes price above all else, and not the elite Mileage Plan™ benefits you’ve come to know and love.
 
Saver fares offer cost-conscious guests the absolute lowest fare possible. The trade-off is that these tickets are not refundable, not changeable, and not eligible for front-of-cabin seat selections or complimentary upgrades – even as an elite member.
 
We resisted launching Saver fares, but in recent years the offering of Basic Economy fares by other airlines have become popular among cost-conscious flyers and we started to lose business to the competition. In order for Alaska to be considered by shoppers, we had to reduce our Main Cabin fares to match the lowest published prices of our competitors’ Basic Economy fares, while still offering full Main Cabin benefits.
 
As you can imagine, this became impossible to sustain. This industry shift to Basic Economy has cost Alaska hundreds of millions of dollars over the past few years. It was simply a financial imperative that we launch our own version to protect Alaska Airlines over the long term. We recognize, in some situations, you will pay more for Main Cabin fares that provide the full suite of the elite benefits you’re accustomed to. Our goal continues to be what it has always been, to fulfill our commitment to maintaining low fares, great service and generous Mileage Plan rewards.
 
The airline industry is constantly changing and often forces us to make difficult decisions, but we remain focused on setting ourselves apart from other airlines. Our Saver fares needed to be more generous than run-of-the-mill Basic Economy fares, and they are. Alaska passengers who purchase Saver fares earn full miles for their trip, are allowed to bring a carry-on bag and in many cases can still be assigned a seat at the time of booking – albeit in the rear of the aircraft. Additionally, elite Mileage Plan members who purchase Saver fares will still enjoy priority boarding.
 
We did a poor job at providing you with enough information well in advance about how Saver fares might impact your elite experience, and for that I apologize. Going forward, we will err on the side of providing our most loyal customers like you with more proactive and transparent communication about product changes of this magnitude — for better or worse.
 
Thank you for your loyalty and understanding. It means the world to us, and we don’t take it for granted.

Credit where credit is due… Alaska’s Saver Fares are better than basic economy on most of the other airlines. Just as it says in the letter, anyone flying those fares will earn full mileage, get a carry on, and if there are seats available in the back of the plane you can preassign to sit together. If you’re an elite member, you can still get Priority Boarding as well and get that coveted overhead bin space.

Alaska's overhead bin space

Alaska’s overhead bin space, from Alaska Airlines

On the other hand, it was rolled out quickly and elite members especially are frustrated. The fare sales that we used to know and love have been devalued. All the routes that used to have fare sales are now replaced with “saver fare sales” and the regular fares aren’t as sexy. We wrote about those here and here, for example.

Here’s the thing…

Alaska is doing what it needs to do to get the bottom line (read share holder happiness and stock prices) up. They’ve been losing a lot of money to the other carriers who are introducing this product and have to compete.

Me? I’m not going to miss out on first class upgrades or any of the other elite benefits simply to save a few bucks on a ticket. But a lot of people are. No matter how much people say they want their benefits, if they can save $400 on a family trip to Boston, they probably will. 

In the end, that means less people competing for those first class seats up front, and I’m truly OK with that! And as long as they don’t go revenue based for earning on tickets, they’ll have my loyalty… you hear that Alaska?

What are your thoughts? Did Alaska need to do this to stay competitive?

Author: Jon Nickel-D'Andrea

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9 Comments

  1. I got the email as a Gold MVP. I’m not an expert on airline business models, but I’ve always enjoyed the experience and customer service of flying Alaska. It seems like if the margins are lower per seat, the customer service is likely to suffer in the long run. But, I hope I’m wrong.

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  2. I’ve been 75k with Alaska. Switched to Southwest because I often cancel my $69 fare to rebook last minute for $341. Southwest lets me cancel their “saver” fare and rebook using the credit and I don’t even have to be elite to do so. Won’t be long before my wife is flying next to me for free on Southwest Companion Pass. Buh bye Alaska.

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    • Comparing Southwest to Alaska is like comparing a bag of rocks to a space shuttle.

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  3. First class upgrades are mostly a thing of past as Alaska sell first class seats for cash at gate even when 75ks are waitlisted.

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    • I’ve never seen that… have you? Because plenty of times I’ve been at gates and never seen anyone offer $ for upgrades. JetBlue does I know

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    • Yeah, I’ve noticed that too. It’s hard to make 75K on Alaska with few international routes. Rewarding loyalty is going aside. If that stays the course, Alaska will be bought…probably by Delta.

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      • I doubt Alaska will be bought. We went down that road a long time ago.

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  4. Are they on the verge of financial collapse or were they just not making as much profit as the others? How much is enough versus lets not mess up a good thing and end up as lame as most of the other airlines?

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