Alaska Airlines launches $395 credit card in premium travel race, combines loyalty program with Hawaiian

In this articleALK your favorite stocksCREATE FREE ACCOUNTAn Alaska Airlines Boeing 737 MAX 9 departs Los Angeles International Airport en route to Puerto Vallarta on Sept. 19, 2024.Kevin Carter | Getty ImagesAlaska Airlines is getting into the industry's race for high-end credit cards and creating a combined frequent flyer gram, called Atmos Rewards, with Hawaiian Airlines, which it acquired last year.The $395-a-year Atmos Rewards Summit Visa Infinite card, co-branded with Bank of America, is the carrier's first premium credit card and includes perks airport lounge passes, instant $50 vouchers for delays and discounted global companion fares.Under the new Atmos gram, travelers will have a choice in how they earn points:By distance: Customers will earn one point for each mile they fly, which Alaska said is better for travelers who often fly internationally or cross-country.By price: Travelers will earn five points for every $1 they spend on a flight, which the carrier said is geared toward those who often fly in premium cabins first class.By flights: Customers will earn 500 points for each segment they fly, which is aimed at flyers who take a lot of short-haul trips, those within Hawaii or California.Elite frequent flyer tiers are also changing, and Alaska will require travelers to earn more points to reach top levels

Alaska's chief commercial officer, Andrew Harrison, told CNBC that miles aren't being devalued for flight redemptions, however

There are also silver and gold tiers in the Atmos gram, with all levels including upgrades, when available, to free premium-class seats on Alaska and one of the carrier's partners, American Airlines.Although the frequent flyer gram will be combined, Alaska plans to keep its brand operating separately from Hawaiian

It is, however, planning to launch a host of international routes on wide-body aircraft from its base in Seattle.Alaska and its competitors have invested heavily in chasing higher-spending customers and creating sticky with loyalty hurdles customers have to to get to perks on the other side

Even budget airlines Spirit Airlines and Frontier Airlines have turned to more upmarket strategies to try to return to fitability.Read more CNBC airline newsSpirit Airlines warns it might not be able to survive a year without more cashWhy Delta and United are pulling away from the airline packHow much are Southwest's new assigned seats? It depends'He's showing up.' Things are getting better at Boeing under CEO Ortberg

Can he keep it going?Airlines "with the premium cabins, with premium experiences, there is good solid demand there that has not materially changed and is actually getting better," Harrison told CNBC.The worst thing you can do to them is invite them into lounges and have lines out front saying you can't get in and have to wait."Andrew HarrisonAlaska Airlines Chief Commercial OfficerAlaska is also trying to keep benefits and lounges feeling exclusive to avoid an industry blem with overcrowding.The Atmos Rewards Summit Visa Infinite card comes with eight lounge passes a year, valid for the whole travel day."These are your most loyal and frequent travelers

The worst thing you can do to them is invite them into lounges and have lines out front saying you can't get in and have to wait," Harrison said.Alaska is building a new lounge at its base at Seattle-Tacoma International Airport dedicated to international long-haul flyers and planning on one at San Diego International Airport.JetBlue Airways launched a premium credit card with Barclays US Consumer Bank earlier this year, with an annual fee of $499

Other airlines have also raised fees and added perks and points bonuses to attract more sign-ups and cardholders."Our new premium credit card is on track to double full-year jections for acquisitions, highlighting the tremendous amount of demand by customers for our premium ducts," JetBlue CEO Joanna Geraghty said on an earnings call last month.Alaska also said it plans to offer Starlink Wi-Fi throughout its fleet, a service that will be complimentary for loyalty gram members