Partnering With Icelandair Will Enhance Alaska Air’s Customer Satisfaction

Alaska Air Group (NYSE:ALK), which had discontinued its association with Icelandair due to the feud over its frequent flier promotions, has reinstated a code sharing agreement and frequent flier partnership with the Iceland-based airline ^[1]. We see this partnership as a strategic step on the part of Alaska Air to further solidify its customer service and maintain its industry leading position on this front.  While the code sharing agreement will allow Alaska Air to add more flights and destinations to its existing network, it will facilitate seamless reservations and travel for passengers flying from the West Coast to Iceland and a number of European cities. On the other hand, the mileage partnership will enable the passengers to earn miles/points on the reciprocal airlines, and enjoy the benefits of the reciprocal club lounges. This will strengthen Alaska Air’s mileage program and enhance its customer satisfaction, which will translate into more business for the airline.

Source: Bank of America Merrill Lynch 2015 Transportation Conference

Here are the benefits that the partnership will entail for the other parties:

Icelandair

• Alaska Air’s mileage partnership with Delta and American will enable passengers to redeem their miles/points under the program and increase the traffic on Icelandair’s 16 North American gateways.
• This is likely to lower the airfare and facilitate direct flights to Iceland, which are currently scarce.

Passengers

• Passengers will be able to seamlessly travel between US and Iceland by redeeming their miles under their frequent flier program of the two airlines.
• The code sharing partnership will offer a strong network of flights to more than 20 destinations in Europe, with an option to take a stop-over at Reykjavik for up to seven nights without an additional airfare charge.
• Members of Alaska Airlines Mileage Plan can earn double miles between 1st October and 15th December 2015, which will be considered while determining the elite status in Alaska’s Mileage Plan.
• With effect from 1st October 2015, the elite members of Alaska Airlines’ Mileage Plan will receive complimentary access to Icelandair’s Saga Lounge at Keflavik International Airport in Reykjavik. In turn, Icelandair’s elite Saga members will enjoy complimentary access to Alaska Board Room lounges in Seattle, Portland, Anchorage, and Los Angeles.

We view this renewed partnership as Alaska Air’s way of strengthening its customer service by offering seamless travel to Iceland and European cities and by providing better facilities to its passengers. This is likely to go a long in building passenger loyalty and will result in higher revenues for the airline.

Source: Google Finance

See Our Complete Analysis For Alaska Air Here

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1. Alaska Air And Icelandair Partnership, 23rd September 2015, www.alaskaair.com [↩]