Alaska Airlines and Horizon Air 2013 Annual Report Download - page 96

membership. The Mileage Plan elite-level
programs include bonus flight miles,
complimentary upgrades, priority check-in
and boarding, preferred seats, discounted
airport lounge membership, fee waivers and
access to exclusive events.
In addition to domestic or foreign airlines that we
compete with on most of our routes, we also
compete with ground transportation in our short-
haul markets in the regional operations. Both
carriers, to some extent, also compete with
technology such as video conferencing and
internet-based meeting tools that have changed
the need for, or frequency of face-to-face
business meetings.
AGREEMENTS WITH OTHER AIRLINES
Our agreements fall into three different
categories: Frequent Flyer, Codeshare, and
Interline agreements. Frequent Flyer Agreements
offer reciprocal frequent flyer mileage credit and
redemption privileges for our customers. Alaska
offers one of the most comprehensive frequent
flyer programs for our Mileage Plan members
through our frequent flyer partnerships with a
number of domestic and international carriers.
Codeshare agreements allow one or more
marketing carriers to sell seats on a single
operating carrier that services passengers under
multiple flight numbers. The sale of codeshare
seats can vary depending on the sale
arrangement. For example, in a free-sale
arrangement, the marketing carrier sells the
operating carrier's inventory without any
restriction; whereas in a block space
arrangement, fixed amount of seats are sold to
the marketing carrier by the operating carrier.
The interchangeability of the flight code between
carriers provides a greater selection of flights for
customers, along with increased flexibility for
mileage accrual and redemption.
Interline agreements allow airlines to jointly offer
a competitive, single-fare itinerary to customers
traveling via multiple carriers to a final
destination. An interline itinerary offered by one
airline may not necessarily be offered by the
other, and the fare collected from passengers
are prorated and distributed to interline partners
according to preexisting agreements between the
carriers. Frequent Flyer, Codeshare, and Interline
agreements help increase our traffic and revenue
by providing more route choices to customers.
We have marketing alliances with a number of
airlines that provide frequent flyer and
codesharing opportunities. Alliances are an
important part of our strategy and enhance our
revenues by:
• offering our customers more travel
destinations and better mileage credit/
redemption opportunities, including elite
qualifying miles on all of our major U.S. and
international airline partners;
• giving our Mileage Plan program a
competitive advantage because of our
partnership with carriers from two of the
three major global alliances (Oneworld and
Skyteam);
• giving us access to more connecting traffic
from other airlines; and
• providing members of our alliance partners’
frequent flyer programs an opportunity to
travel on Alaska and its regional affiliates
while earning mileage credit in our partners’
programs.
Most of our codeshare relationships are free-sale
codeshares, where the marketing carrier sells
seats on the operating carrier’s flights from the
operating carrier’s inventory, but takes no
inventory risk. Our marketing agreements have
various termination dates, and at any time, one
or more may be in the process of renegotiation.
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