Alaska is an airline on a tear right now. It’s posting record profits while expanding fairly quickly, not a combination that you often see. But what’s really interesting is that Alaska has effectively been pushed into this position by Delta’s attempt at a Seattle hub. And that nudge was apparently just what Alaska needed. Now, however, with Alaska’s growing long-haul operation, the time has come to update the product. We’ve seen several changes recently that show Alaska is working on it, and now the airline is branding the experience as Alaska Beyond.
Let’s think about the Alaska Airlines product as it has been for a long time. You have one fleet type with coach and First Class. All aircraft have wifi, but it doesn’t work on Hawai’i runs (which constitute 17 percent of the airline’s capacity). Inflight entertainment was provided by a bulky and expensive-to-rent DigEPlayer that had some pre-programmed content on it. And there were no power outlets for your own devices. For regional flying, the longer regional flights were operated with single class bare-bones CRJ-700s. Shorter flights were on the Q400s, which are nice airplanes. Of course, free microbrews can make anything nicer.
But the Alaska of old isn’t the Alaska of today. Many people still think of Alaska as a north-south kind of airline. It does a ton up and down the coast, but in the last 10 years, that has shrunk from 60 percent of the airline’s total capacity to only 42 percent. Next year, about 40 percent of the airline’s capacity will be mid- and long-haul flights.
The growth isn’t a surprise, but what is a bit surprising is where it’s coming from. Until the last couple of years, we saw a lot of growth outside the airline’s home market in the Pacific Northwest. There was a bunch of intra-California regional flying and then an attempt to build up San Diego with flights as far as Orlando. But then Delta decided to make Seattle a hub, and Alaska had to turn its focus inward and defend its home turf. The plan? Expand dramatically to make sure it could provide as much utility as it possibly could to its loyal customers. This worked wonders, and the growth continues. But much of the growth is long haul, because most of the short haul opportunities are already served.
To serve these new markets, Alaska needed a new fleet. The 737s are big, and the next step down is the CRJ-700 which is single cabin and not very comfortable. So at the airline’s investor day last week (I highly recommend thumbing through the presentation), Alaska announced that it would partner with SkyWest to operate 7 Embraer 175s. Unlike the CRJ-700s, these airplanes will feel like mainline aircraft. They will have First Class and coach onboard (though power is only in First Class). They will also have wifi, video streaming, and hot food available. With these aircraft, Alaska can push into longer markets with less demand. The first routes from Seattle are to Milwaukee and Oklahoma City. We’ll also see Portland to St Louis join the network.
Now, back to the onboard product. Alaska’s product just wasn’t great for long haul, so something had to change. That’s why we now have this Alaska Beyond program which is broken down into 3 categories.
Alaska Beyond Comfort
By the end of this month, every 737-800 and 737-900 in the fleet will have new slimline seats with power outlets. (The 737-700s and -400s do shorter flying and won’t be in the fleet for the long run.) The reviews I’ve heard of the new slimline seats are that, unlike nearly every other airline, they’re surprisingly very comfortable. If you’ve flown them, let’s hear about it.
Alaska Beyond Entertainment
The old DigEPlayers just didn’t make much sense anymore, especially with power outlets on the 737s making it easy for people to use their own devices. This new initiative is really just inflight streaming via Gogo. It’ll be on all the 737s by April, and it’ll be on the Embraer 175s as well. Like Delta, Alaska will keep some of this content free for everyone (even beyond the January intro period where absolutely everything is free). The only downside? There’s still no coverage on flights to Hawai’i, which is really frustrating. I’m told that Gogo has found a way to enable this over the water for Alaska, something that no other airline has done yet, so hooray for Hawai’i flights.
Alaska Beyond Delicious
You know the story here. It’s all about finding tasty, locally-sourced stuff (including microbrews).
With those three categories defined, Alaska has moved its product into something far better than it was, but there was still something missing: an extra legroom section.
The longer you fly, the more interested you become in having more legroom, so Alaska is addressing this conservatively. Instead of creating a new extra legroom section, it’s just going to sell the bulkhead and exit rows as Preferred seats. This is similar to the Virgin America strategy, except that Alaska isn’t charging an arm and a leg. It’s a simple upsell. On flights under 1,250 miles, it’ll cost $15. On flights from 1,251 miles to 2,000 miles, it’ll cost $30. And anything over 2,000 miles will cost $50.
In typical Alaska fashion, it’s adding some meat on the bones here. It’s not just more legroom. People in Preferred seating also get a free drink and priority boarding. (Doesn’t it sound a lot like Virgin America?) Elites will likely be unhappy about this since they are the only ones who can get these seats today. They’ll still have access, but the riff-raff now have a chance as well (Edit for clarification: this is only sold during the check-in window, otherwise only elites have access). On the 737s, there are 18 seats (3 rows) and on the Embraer 175s, there are 12 seats.
All of these little things add up to a much improved product over what Alaska had before. I’d say it’s mostly comparable to what Delta offers Seattleites, which is important for the airline, but with a better network. I’m not convinced that simply selling exits and bulkheads will be enough for the extra legroom option, especially when competing with Delta’s larger Comfort+ section. But other than that, it’s hard to argue with what they’re doing here.
