It’s official. Alaska Airlines is buying Virgin America. And, the question on my mind, of course, is how can we make the most of this?
Virgin America points are arguably worth roughly two times Alaska’s Mileage Plan miles. How do I get that number? Look at my Transfer Partner Master List. There you’ll see that the transferable points programs that transfer to Alaska Mileage Plan (SPG and Diner’s Club) do so 1 to 1, whereas the programs that transfer to Virgin America (Amex Membership Rewards and Citi ThankYou Rewards) do so at a 2 to 1 ratio (2 bank points become 1 Virgin America Elevate point). [UPDATE: SPG is now a 1 to 1 transfer partner with Virgin America, so this argument is weaker than before]
Even Virgin America and Alaska Airlines agree with this multiplier. Virgin America sells their points for 5.2 cents each whereas Alaska sells their miles for 2.75 cents each. That pegs Virgin Elevate points at 1.9 times Alaska miles. Pretty darn close to 2X.
Will Alaska preserve the 2 to 1 ratio?
At some point in the future, Alaska will most likely merge the two loyalty programs. At that point, if not sooner, we can expect that they’ll convert Virgin America Elevate points into Alaska MileagePlan miles. If/when that happens, we can hope that they’ll offer 2 Mileage Plan miles for every 1 Elevate point. I think they would be hard pressed not to offer that ratio without seriously pissing off previously loyal Virgin America fans. So, yes, I’m willing to bet that Alaska will convert every Virgin America Elevate point to two Mileage Plan Miles.
Transfer Amex Membership Rewards or Citi ThankYou Rewards to Alaska Mileage Plan 1 to 1
We now have a unique opportunity to convert Amex Membership Rewards and Citi ThankYou Rewards points to Alaska Mileage Plan miles 1 to 1. Normally, neither program supports transfers to Alaska, so this is likely a one time opportunity. It would work like this:
- Transfer from Membership Rewards or ThankYou Rewards to Virgin America Elevate 2 to 1. Every two transferable points become 1 Virgin America point.
- Wait for Alaska to convert Virgin Elevate points to Alaska Mileage Plan miles 1 to 2.
Should we wait for a transfer bonus?
Amex has been known to offer a transfer bonus to Virgin America. Recently, they offered a 50% bonus that was available until March 10th. If this were repeated, the above process would mean the ability to convert Membership Rewards to Alaska miles at a fantastic 2 to 3 ratio.
Citi has offered transfer bonuses several times to Virgin Atlantic, but not to Virgin America (as far as I can remember). Still, a transfer bonus to Virgin America is possible.
One danger in waiting is that we have no way of knowing how long these programs will support transfers to Virgin America. As the airline merger progresses, there will almost certainly come a time when both programs drop Virgin America as a transfer partner. Most likely they’ll offer some advanced notice, but there’s always a chance that the functionality will disappear overnight without notice.
Should we do it at all?
Just because it looks like there will be an opportunity to transfer points from Amex Membership Rewards and Citi ThankYou Rewards to Alaska Mileage Plan doesn’t mean that we should. Just last week Alaska took away one of their best redemption options overnight and without warning by nearly doubling award prices on Emirates Airlines. While they still offer some great values (Cathay Pacific awards, for example), we can’t be sure that those opportunities will remain. In fact, the steady devaluation of airline miles over time has taught us that those opportunities most likely will go away. Keeping points in transferable points programs until you’re ready to use them is generally the best way to protect yourself from these devaluations.
Wait it out. While it might be a great bet to transfer points to Virgin America in advance, it is also risky. Alaska miles may devalue to the point where it simply isn’t worth it.
If a transfer bonus comes along, then it may be worth the risk. If/when that happens I’ll publish a new analysis of that opportunity.
I think that chances are good that there will be a time where transfers from Citi and Amex are still possible and Alaska will allow conversion of Elevate points to Mileage Plan miles (or that we’ll have a known date or when that will happen automatically). At that point, if you have a definitive use for Alaska miles and a big stash of Membership Rewards or ThankYou points, then go for it.