The Air Show: "Alaska's Shifting Priorities"

Host: Shayr Media
Guests: Jon Ostrower (Editor-in-Chief, The Air Current), Brian Sumers (The Airline Observer), Brett Snyder (Author, Cranky Flyer)
Date: November 6, 2025
Topic: Alaska Airlines’ post-Hawaiian merger strategy, network shifts, loyalty overhaul, and ongoing transformation in West Coast aviation.

Episode Overview

This episode explores Alaska Airlines’ ambitious and rapidly evolving business strategy in the wake of its acquisition of Hawaiian Airlines. The hosts analyze Alaska’s shifting network priorities, competitive approach in key markets (San Diego, Portland, LA, San Francisco), and the launch of its rebranded loyalty program, Atmos. The discussion blends big-picture industry insight with detailed operational and customer-focused analysis, marked by the hosts’ trademark banter and deep expertise.

Main Discussion Points

1. Defining the “New Alaska” – Poems, Pragmatism, and Post-merger Mindset

[00:06–01:23]

• Each host humorously attempts to summarize Alaska’s new direction in 10 words—or as a haiku.
• Jon Ostrower (Haiku, 00:46):
  “Single AOC
  Oops, something broke at it.
  Next stop, sand.”
• Brian Sumers: “Focused on its strengths in the western USA and Hawaii.”
• Jokes about engaging listeners and planning a mailbag episode set the tone for a collaborative, insightful conversation.

2. Alaska’s Network Overhaul: Key Moves and Implications

[02:10–19:19]

Key Areas of Change (Brett, [03:07])

• Transition of 787s from Honolulu to Seattle (emphasizing long-haul Seattle flights)
• Expansion in San Diego (leveraging new terminal capacity)
• Restoration and build-up in Portland after a period of neglect
• Capacity drawdown in San Francisco to focus on core markets and the Pacific Northwest
• Refocusing LAX service towards leisure and pulling back service overall

Drawdowns in LA and SFO

• Brian ([04:12, 05:09]):

  • Acknowledges Alaska’s strategic retreat from LA and SFO; competitors like United and Delta poised to fill the void.
  • Praises Alaska for honesty and rational decision-making, not chasing sunk costs from the Virgin America purchase.
  • “The bad move here would have been for Alaska to say we have this sunk cost because nine years ago we overpaid for Virgin America and we can’t cut in San Francisco and LA… well-run companies like this, they know where the opportunity is.”

• Brett:

  • Agrees on focusing forward, not lamenting the Virgin America acquisition.
  • Sees value in consistently making mostly smart moves, even if some are questionable: “If you just keep making enough moves that work and you’re smart about it and you keep turning in solid results, then you don’t really mind the missteps…”

San Diego: Growth Market

• Jon ([08:29]):

  • Points to San Diego as a deliberate, long-term focus; now 49 destinations served from San Diego, up dramatically in two years.
  • “Alaska’s ambition in San Diego… has been apparent for a while… It was the first clear sign that they had a strategy at the corners.”

• Alaska’s competitive landscape with Southwest in San Diego is noted as more favorable compared to fighting “the legacies and their frequent flyer plans” (Brett, [07:34]).

Portland: Building a Moat & Connecting Hub

• Brett ([16:55, 17:51]): Notes significant bulk-up—over 50% of seats filed for 2026 as of now, aiming to connect traffic and relieve Seattle.
• Brian: “You go to war with the army that you’ve got… Portland was the best opportunity they had.”
• CEO Ben Minicucci clip ([18:32]): “So we see Portland becoming a huge connecting complex for us in the next few years. And… a lot of flow instead coming over Seattle is going to come over Portland.”
• Jon ([18:56]): Now utilizing five banked scheduling structures to facilitate Hawaii and other connections.

SFO and the Future of Fleet

• Jon ([14:51, 15:15]): Suggests the MAX 10 could be a tool for regaining ground in SFO, noting it's well-suited for constrained airports and could allow for more competitive transcontinental capacity—but this remains speculative.

3. Loyalty and Atmos: Strategic Expansion and Customer Tensions

[20:49–29:38]

Launching Atmos: Program Philosophy and Goals

• Brian ([21:07]):

  • Atmos is Alaska's rebranded loyalty program, unifying old Mileage Plan and HawaiianMiles under one system.
  • “What Atmos is trying to do… is help Alaska Air Group punch above its weight and then earn customers who might not necessarily fly it all the time.”
  • Sees this as a play for “big money in the credit card and loyalty business”—targeting people even outside Alaska’s core West Coast markets.
  • Quotes VP of Loyalty, Brett Catlin: Atmos serves as a “third front door” to the company.

• Notable move: International award ticket promotions designed to spark excitement in new markets, not just fill empty seats ([23:10]).

Challenges: Complexity vs Simplicity

• Brett ([24:25, 25:43]):

  • Voicing skepticism about the strategy’s alignment—cutting presence in populous LA/SFO yet hoping to build national loyalty and credit card base.
  • Critiques upcoming rules forcing flyers to choose how to earn points (“earn by points, revenue, segments”)—worries this complexity could “defeat the purpose” for new/casual customers.

• Brian ([26:13]):

  • Argues “Some people just like the feeling that they’re in control. They like to think that they have choice… even if they make irrational choices.”
  • Defends giving customers perceived flexibility.

Road Warrior Perspective: IT Woes and Wait-and-See

• Jon ([27:51, 29:10]):
  • As a high-tier status member, says not much has changed yet, but IT has been “extremely rickety.”
  • Shares an anecdote of a first-class passenger directly complaining to CEO Ben Minicucci about the loyalty IT’s messiness ([28:01]).
  • Major changes (earning rules, international routes, new Alaska Lounge) will all land in 2026—“the big test is going to be 2026 when all the earning levels formally change… and the international routes hit the schedule.”

Notable Quotes & Memorable Moments

• Jon’s haiku ([00:46]):

  "Single AOC
  Oops, something broke at it.
  Next stop, sand."

• Brian on Alaska’s calculated retreat ([05:09]):

  “I think the airline made the right move. The bad move here would have been… [not cutting LA/SFO] because [Alaska] overpaid for Virgin America and we can’t cut... well-run companies like this, they know where the opportunity is.”

• Brett on strategic missteps ([06:01]):

  “If you just keep making enough moves that work and you’re smart about it and you keep turning in solid results, then you don’t really mind the missteps…”

• Jon on San Diego strategy ([08:29]):

  “It was the first clear sign that they had a strategy at the corners.”

• CEO Ben Minicucci ([18:32]):

  “We see Portland becoming a huge connecting complex for us… a lot of flow instead coming over Seattle is going to come over Portland over the next few years.”

• Brian (on loyalty program evolution) ([21:07]):

  “What Atmos is trying to do… is help Alaska Air Group punch above its weight and then earn customers who might not… fly it all the time.”

• Brett on rewards program complexity ([25:43]):

  “I just think they’ve given people too much choice here… it just bugs me. It makes it too complicated…”

• Jon (road warrior + IT gripes, [28:01]):

  “IT has been extremely rickety… a first class passenger actually stopped [CEO Ben Minicucci] in the aisle… his main complaint… was that the customer-facing IT had become really messy from a loyalty perspective.”

Key Timestamps for Major Segments

• 00:06: Each host summarizes Alaska’s new priorities (poetic and practical).
• 02:10: Introduction of Alaska’s network shift—expansion, restoration, and retrenchment.
• 04:12: In-depth analysis of LA and San Francisco drawdowns.
• 08:29: San Diego as a centerpiece for Alaska’s west coast growth.
• 16:55: Portland’s transformation into a major connecting hub.
• 18:32: Clip from CEO Minicucci on Portland’s strategic role.
• 20:49: Atmos loyalty program—strategy, mechanics, ambitions.
• 24:25: Critique of program complexity and alignment with network strategy.
• 27:51: Inside perspective on loyalty program IT and road warrior experience.
• 29:10: Coming changes in 2026—wait-and-see sentiment.

Tone and Language

The hosts maintain a friendly, sometimes sardonic, but consistently insightful tone, liberally employing wit and personal anecdotes. Their approach is approachable yet deeply informative, balancing data-driven industry analysis with traveler and customer perspectives.

Summary

This episode distills the tension and opportunity in Alaska Airlines’ current strategy. Instead of clinging to costly positions in crowded big-city markets, Alaska is deliberately pivoting to markets where it can dominate—Portland and San Diego—while leveraging its new partnership with Hawaiian to boost trans-Pacific business and international relevance. The rebranding and relaunch of the loyalty program, Atmos, illustrates the airline’s aspiration to extend its reach far beyond the West Coast, via credit card and partnership ecosystems.

But the hosts also warn: execution risks abound, both in technology (rickety IT, increased complexity) and in future competitive response (particularly United’s SFO advantage). As Alaska’s leadership and culture are lauded for adaptation, listeners are left with the sense that the airline is in a state of smart, necessary, but still risky evolution.

Listen to This Episode For:

• Insider’s perspective on ongoing network maneuvers post Hawaiian-merger
• Expert analysis of loyalty program economics, rebranding, and pitfalls
• Balanced debate about complexity vs flexibility for flyers
• Amusing and thought-provoking banter from three well-known airline industry commentators

For further questions or to participate in their upcoming mailbag episode, visit theairshowpodcast.com.