As Hawaiian Airlines still faces its potential merger with Alaska Airlines, both companies await word from the U.S. Justice Department. Customers, including us, holding HawaiianMiles, are understandably concerned about the future of their hard-earned travel benefits.
We’ll explore the current situation, together with historical precedents regarding loyalty programs during airline mergers as well as bankruptcies, and try to offer suggestions for mileage holders.
The current landscape at Hawaiian Airlines.
The Hawaii bellwether is still facing scrutiny in the planned acquisition by Alaska. This deal, if consummated, will reshape Hawaii travel dynamics in a profound way. DOJ is investigating the merger, with its conclusions expected to be published in the weeks ahead. These developments leave a cloud of uncertainty lingering around the future use of HawaiianMiles.
If the deal doesn’t go through, with huge Hawaiian Air losses incurred and continuing, it isn’t clear whether the airline will be able to move forward without the fear of another bankruptcy.
Learning from the past regarding mileage programs during transitions.
Historically, it it is normal for airline mergers to result in the consolidation of frequent flyer programs. When American Airlines and US Airways combined, the frequent flyer miles from US Airways were integrated into American’s AAdvantage program, for example. The affirming statements by Alaska and Hawaiian executives, and other precedents affirm that HawaiianMiles will be absorbed into Alaska Airlines’ Mileage Plan, should the merger be allowed to proceed.
A different situation in terms of Hawaiian Miles could unfold if the merger does not proceed and Hawaiian Airlines is pushed towards another bankruptcy. In prior airline bankruptcies, loyalty programs have largely remained intact, with miles retaining their value. However, every situation is different, and the outcome would be based on the situation and decisions made at Hawaiian.
Several strategies for holders of HawaiianMiles to consider.
1. Should you redeem HawaiianMiles sooner rather than later? If you have been saving those miles for a dream vacation to Hawaii, the mainland, Tahiti, or Australia, you might consider booking sooner to avoid any potential change in your ability to redeem HawaiianMiles.
Beat of Hawaii editors just used HawaiianMiles to obtain free travel between Hawaii and French Polynesia. That was done at cost of 49,500 miles per person, round-trip. That comes to a cost of $500 per person, based on our estimation of HawaiianMiles value at one cent per mile. That flight normally sells on a cash basis for no less than double that. So it was a great deal. We also paid $66 in taxes per person.
By comparison, the cheapest roundtrip we could find using the Alaska Mileage Plan for August between LAX-PPT (Papeete) on partner Air Tahiti Nui was 90,000.
2. When looking to find the best possible mileage redemptions, we suggest checking Google Flights first to find the lowest fare and then check those dates first for mile redemption possibilities. This is because for some time there has been no low fare calculator available on Hawaiian Airlines and, as such, no way to scan dates easily for cost.
How much could HawaiianMiles be worth if converted to Alaska Mileage Plan miles.
When considering how the value of HawaiianMiles might change, it is not only about the ratio of points to points converted between programs, but also other factors.
If points transfer at a 1:1 ratio, what else needs to be considered?
Because these are very different programs, even with Alaska confirming a 1:1 points conversion, HawaiianMiles will still work differently when converted to Mileage Plan.. Other considerations include how much upgrades and award tickets cost, their availability, and other things. We’ll have more to report on that soon.
Alaska will, in any event, aim to properly and fairly equalize the overall value between multiple aspects of highly disparate loyalty systems. How that is going to work will be revealed as part of the proposed merger, if it is allowed to proceed.
BOH editors have been participants in both airlines mileage plans for many years. We have successfully used each for free travel, including much international travel using Alaska, as well as many Hawaiian Air trips and upgrades using HawaiianMiles.
Alaska’s Mileage Plan is far more robust and evolved.
It is known for beneficial redemption options, including for international travel through a wide array of global partners. That was true before Mileage Plan became part of OneWorld and is even more so now with nearly thirty airline partners.
HawaiianMiles, on the other hand, has always had limited options outside of Hawaiian Air flights and upgrades. If HawaiianMiles are integrated into Alaska’s system, members from the Hawaiian side would suddenly have access to a greater range of airlines, free flights, and upgrades.
Other changes HawaiianMiles members can expect.
Achieving elite status and other perks will be different. For those with elite (“Pualani”) status in the HawaiianMiles program, the transfer of such benefits to Alaska’s Mileage Plan will be an aspect of likely changes, as the value of elite status would be significantly elevated by the partnership. Alaska and Hawaiian also each have different thresholds for elite status levels. In addition, other perks such as lounge access privileges are very different at the two airlines.
Earning miles when flying with the carriers’ partner airlines. That is another differentiation between the two airline programs, and those will need to get integrated in some way.
Sharing miles on Hawaiian AIrlines. As commenters have pointed out, and with which we concur, that’s a feature that is very helpful. It requires that one member have a Hawaiian branded credit card. Alaska Airlines does not currently offer that feature.
Change in redemption rates. Each airline has its own charts of redemption rates for free flights and upgrades, and those too will need to achieve a commonality in value.
Alaska’s Mileage Plan is far easier both to understand and to use. For example, an upgrade on Hawaiian Airlines still requires a sometimes lengthy phone call with their off-shore call center, both to find what cost of upgrade is available for various dates, and then to purchase the upgrade with miles. That is still not available as an online service.
What’s your plan for your HawaiianMiles?
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What about Hawaiian Air gift cards?
Do you think we should get an Alaskan credit card for earning miles since Barcley will lose its purpose?
I have reservations for June 18-July 11. I am extremely allergic to Vog. Thanks for your updates. Please continue keep us informed about colcano activity on Kauai! Good job!
With the continued devaluation of FF miles across all airlines, I try to use them as soon as I have enough for an award that adds value to my travels. While Alaska or Hawaiian is unlikely to penalize their loyal travelers by discontinuing their program, all airlines have a huge liability on their balance sheets for the unredeemed miles.
Hi Dean.
We concur with your methodology. Thanks.
Aloha.
Regarding your June 2, 2024 article “What Should You Do With HawaiianMiles Amidst Merger Plans Or Possible Bankruptcy?”
I think you are making a headline out of nothing. Alaska Airlines is not stupid. I suspect they will never alienate any current or future customers if and when the merger occurs. I can see no downside of the merger
Using Hawaiian’s miles is too difficult. So we hope they will be getting the modern technology that Alaska has that does work much better.
“In prior airline bankruptcies, loyalty programs have largely remained intact, with miles retaining their value.”
Not so. Generously, we might call it a fungible commodity among the many considerations in the deal between the two airline companies. Passengers, even the most elite-level passengers, are at the bottom of the pile of liabilities.
If Hawaiian Airlines goes bankrupt. There’s always spirit airlines or JetBlue that can take over the Hawaii market or united airlines. And breeze airways
Thanks for your information and experience. We have a lot of miles accumulated, and I have been worried about the possibility of losing them. This was helpful in making my decision to use them on an upcoming trip.
Hi Lee.
Thanks! We searched for a while to find the best price and then changed our desired dates by a month. But it was worth it.
We appreciate all of your comments over the past 7 years.
Aloha.
Lee, use them now!
Among the many variables in a merger, the liabilities of “points” for loyalty programs are near or at bottom of the pile.
I lost hundreds of thousands of “miles” when United and Pan Am “merged” and this is not the only example.
Aloha,
Bud
I don’t know what you mean. United and Pan Am never came close to merging.
United bought Pan Am’s Pacific divsion, consiting of route authorities, aircraft and other tangible assets in 1985.
Then, in early 1991, UA bought Pan Am’s London operations.
Ultimately, Pan Am ceased operations in December of 1991 as the run up to the Gulf War took a toll on international travel.
Any Pan Am miles you may have lost had nothing to do with its asset sales to United.
That is mostly untrue. Pan Am’s flights except freight immediately became United flights. Pan Am freight continued for some years. Some of those freight flights had passengers, typically upstairs in 747s. Airline miles from Pan Am were converted by a ratio formula to United miles.
Lee,
Airline points (and any similar benefit from any loyalty program) have a time value, that is, a discount rate based on the time value of money. You bought an original item such as an airline ticket at a certain price and received a benefit (for example Hawaiian Airline miles) based on the ticket value at that time, The value of those airline miles is declining at the general rate of inflation, which is the discount rate.
I love my Hawaiian Airlines miles!! I always use my Barclays card to pay for everything and think “getting me closer to Kauai”😁✈️🌴
One of the features we have loved over the years with Hawaiian is the ability to pool miles for free if you are a credit card holder. I really hope that is kept and added if Alaska takes over.
Hi Diana.
Good point. Thanks for mentioning that.
Aloha.
Absolutely agree on that. We travel as a family and pool miles. That function has been one of the reasons we fly Hawaiian.
It seems another advantage of having SW as a competitor may have been the reason Hawaiian has reduced the number miles needed to fly inter island.
As far as value of miles, getting 2 cents per mile with Hawaiian is a job well done. Usually if your dates are set it’s hard to get 1 cent. I just booked a one way first/business class Lihue to London in August on AA for 62,000 miles, one stop in LAX and flat seat to LHR. Over 8 cents per mile. Sometimes you get lucky. With Hawaiian miles you need a Lot of luck.
Interested in solutions!
I have a Southwest card that I use sparingly all my other cards are cash back I use them like a checking account paying the balance off when payment comes due.
Thanks for bringing this up together with your ideas and experience. I don’t have a ton of miles, but they weren’t easy to earn and I want to get the most out of them that I can.