As Alaska Air Group strives to compete with the nation’s largest carriers, it is turning its focus to premium travelers, or the passengers willing to pay more for exclusive lounge access, extra leg room and other airline perks.
On Tuesday, the company — which includes Alaska Airlines, Hawaiian Airlines, regional carrier Horizon Air and ground support company McGee Air Services — unveiled plans for a slate of new premium offerings, including a four-class cabin configuration and new passenger suites featuring lie-flat seats. It also introduced a new debit card, coming next year.
The new suites will roll out on Alaska Air Group’s widebody fleet, including Boeing 787s and Airbus A330s, and on some narrowbody 737 MAX 10 aircraft. The MAX 10, still pending certification, will be Boeing’s largest MAX variant with space for more seats or, as Alaska is envisioning, more room for select passengers.
Alaska Air Group’s announcement coincides with its investor day, an event where the company will update analysts and media on its expansion plans.
In December 2024, shortly after Alaska Air Group completed its acquisition of Hawaiian, the company introduced “Alaska Accelerate,” a three-year plan to grow into a global carrier with new long-haul international routes, new lounges and new customer credit cards. It set a goal to reach $10 earnings per share in 2027.
Seattle has been at the center of Alaska’s expansion plans, with the company setting a target to introduce 12 nonstop long-haul international routes from Seattle to destinations in Europe and Asia by 2030. Last week, Alaska’s Chief Operating Officer Jason Berry said the company increased that goal to 15 new destinations.
“Alaska Airlines is taking a step change in its size and scale,” Chief Commercial Officer Andrew Harrison said in an interview with The Seattle Times before Air Group’s investor day.
“We’re bringing all the products to bear,” Harrison continued, pointing to the new suites, premium reserving seating and debit card, “to move us to the next generation of growth.”
Project Gotham
Alaska is not unique in its efforts to tap into the premium market.
A June article from consulting firm McKinsey & Company found revenue from “premium cabins,” including first-class, business-class and premium-economy seats, account for an increasing percentage of total seats. A business-class cabin could contribute nearly as much revenue as an economy cabin, the consulting firm found.
Delta Air Lines, United Airlines and Alaska are all seeing premium revenue grow, with Delta’s Chief Commercial Officer Joe Esposito telling analysts this summer that premium has been a “big bright spot” for the airline.
For Alaska Air Group, premium revenue now makes up 35% of the company’s total revenue, Harrison told analysts in July. More than half of every revenue dollar the company generates comes from purchases outside the main cabin, he said.
Most in the industry consider the premium push a result of the “post-COVID era,” Harrison said, speaking to The Seattle Times. There was always demand for first-class and premium seats, particularly among corporate travelers, but that demand skyrocketed as people began to fly again.
At the same time, the industry started to raise prices across the board as it faced higher costs, Harrison continued. Labor costs went up, and airports spent heavily on modernization projects.
More recently, the rising cost of fuel amid the Iran war has contributed to another lasting bump in airfare.
“The fundamental cost structure of the airline industry has significantly changed, which means we need to increase our fares,” Harrison said. “People don’t want to pay more for the same thing, but they are willing to pay more” for premium products.
Alaska noticed it was missing out on the premium trend, Harrison said, when it realized it was underperforming the rest of the industry on its daily flights out of New York City. So, it set up a study to understand why, internally known as Project Gotham, a nod to Batman.
“It became very clear to us that the market demanded premium seats,” Harrison said. “There was an entire amount of premium, corporate traffic we weren’t getting because we didn’t offer that.”
Alaska also determined passengers were willing to pay for more luxury travel experiences if they were flying farther distances, Harrison said. That positioned the company well, he continued. Because of its homebase in the Seattle area, 70% of Alaska’s flights are more than 1,500 miles and one quarter of its flights are more than four hours.
“We feel very confident that we will have a natural advantage over any other carrier,” Harrison said.
As part of its three-year Alaska Accelerate plan, the company set a goal to reach $10 earnings per share in 2027. Because in part to the rising fuel costs, Alaska Air Group reported a loss of $0.68 per share in its most recent quarterly earnings.
Harrison encouraged travelers and analysts who are watching Alaska’s progress to focus on the company’s long-term growth goal, rather than short-term costs.
Historically, Alaska has had a singular focus on cost reduction, Harrison said. “But today, in the modern airline industry and our network and where we’re flying, we of course care about cost but … the real lever here is revenue.
“Accessing revenue — premium, international, corporate — that we haven’t accessed before, that requires investment.”
Harrison declined to share financial details of those investments.
Suites, dining and lounges
In a news release Tuesday, Alaska introduced a new “premium reserve” class that will be between first class and premium seating. The new class of seats and the lie-flat suites represent Alaska’s “most significant investment in premium travel,” the company wrote in its release.
“We believe premium is more than a seat. It’s how guests feel from the moment they book their trip to the moment they arrive at the airport to when they’re in the air with us,” CEO Ben Minicucci said in a statement.
Alaska’s new premium reserve seats will offer passengers 38 inches of pitch, a wider seat than traditional economy and a 16-inch entertainment seat. The new seats will be positioned after first class and followed by premium seating and then the main cabin.
There will be 35 premium reserve seats on Alaska’s 787s, 28 on Hawaiian’s A330s and 12 on the carrier’s 737 MAX 10s.
The seats will be available in 2028, but passengers can book a premium reserve seat starting next summer.
Separately, the new suites rolling out in 2028 will feature fully lie-flat seating, direct aisle access and a 19-inch entertainment screen. Some of the suites will include a privacy door.
Alaska’s 787s will have 34 suites, known as Aurora Suites, increasing the plane’s premium seating from 38% to 46% of the cabin. At least 25 MAX 10s flying transcontinental routes will have 12 Aurora Suites.
Hawaiian’s fleet of 24 A330 aircraft will have 22 suites, known as Leihōkū Suites. Hawaiian will also update the full interior of its A330 fleet, increasing premium seating from 30% to 40% of the cabin by the end of 2028.
For in-flight dining, Alaska has partnered with Seattle chef Renee Erickson for flights to London, Rome, Athens and Paris. James Beard Award-winning Chef Brady Ishiwata Williams will “expand his culinary program” to serve routes from Seattle to Asia, the news release said.
As part of its expanding premium offerings, Alaska is also opening new airport lounges, including a previously announced 41,000 square foot lounge at Seattle-Tacoma International Airport next year. The new lounge will span two floors in the airport’s recently renovated C concourse.
Alaska Air Group also plans to open a new 13,000 square foot lounge in Honolulu and a 14,000 square foot lounge in San Diego in 2028.
Also on Tuesday, Alaska announced new offerings for its Atmos Rewards loyalty program members, including a debit card coming in early 2027.
Alaska’s current Ascent Visa Signature Card has an annual fee of $95. Its premium credit card, called Summit Visa Infinite and introduced last year, has an annual fee of $395.
Starting on Oct. 1, Atmos rewards members will also be able to choose how they earn points for flights departing on or after Jan. 1, 2027. Rewards members can earn points by distance traveled, price paid or segments flown.
Current Atmos members who don’t make a choice will automatically earn based on distance traveled, while new members will default to earn points based on price paid, Alaska said. Members can change their earning preference once per calendar year.