Alaska Airlines and Hawaiian Airlines just announced that the Department of Justice (DOJ) approved their proposed merger without challenging it on antitrust grounds, with no concessions needed. While it still needs to be approved by the Department of Transportation (DOT), which has a history of challenging these types of proposals, this is another positive step towards the merger becoming a reality in the near future.

This announcement creates an interesting opportunity as American Express has a 20% transfer bonus to the Hawaiian Airlines HawaiianMiles. Currently, there are no confirmed details on the integration of the two loyalty programs or if points will be transferrable across the two programs. However, this is one of those rare opportunities where a speculative transfer may be worth the risk.

Integration Of Alaska Airlines MileagePlan And Hawaiian Airlines HawaiianMiles

Credit. Travel Weekly. The Alaska-Hawaiian Merger Passes Another Hurdle.

At this time, almost all information by anyone outside Alaska Airlines and Hawaiian Airlines is pure speculation. With that said, the fact remains, at some point in the future, Alaska will have to integrate the two separate loyalty programs into a single loyalty program. Now, as both Alaska Mileage Plan miles and Hawaiian Airlines HawaiianMiles miles are notorious difficult to earn – both programs only have a single transfer partner – I have limited experience with either. I choose to focus my time on “easier” programs with multiple transfer partners and ample redemption opportunities, despite the known redemption value in the Alaska Airlines Mileage Plan loyalty program.

I will say this though: if I were a betting man, I would bet a large quantity of points that Alaska will do a simple 1:1 conversion of HawaiianMiles to Mileage Plan miles. This option accomplishes two key objectives:

1. Rewards loyal Hawaiian Airlines members, creating goodwill; and
2. Keeps things simple

The “kiss” aspect of this option (i.e. keep it simple, stupid), holds incredible value, especially given all the other, complicated aspects of merging two airlines.

Transferring American Express Membership Rewards To HawaiianMiles

Credit. Upgraded Points. American Express Transfer Bonus To HawaiianMiles.

Historically, the points and miles world tends to “do well” during major airline or hotel mergers. As a personal example, when Marriott merged the Starwood Preferred Guest (SPG) loyalty program into what eventually became Marriott Bonvoy, my 160,000 SPG points became 480,000 Marriott Bonvoy points. This was thanks to the generous, but appropriate, 1:3 conversion ratio.

This, in turn, got me thinking about the best arbitrage opportunity for turning HawaiianMiles miles into Mileage Plan miles. As previously stated, I have very limited experience with the HawaiianMiles program. I rarely go to Hawaii or Japan and I am not able to access the HawaiianMiles credit cards from Barclays – a story for another time. However, I do know that American Express Membership Rewards transfer to HawaiianMiles at a 1:1 ratio and, as I sit here and write this, there is a 20% transfer bonus. The 20% transfer bonus means that for every 1,000 American Express Membership Rewards points I transfer, I receive 1,200 Hawaiian Airlines HawaiianMiles miles.

Continuing with this thought experiment, assuming Alaska merges the HawaiianMiles loyalty program into Mileage Plan at a 1:1 ratio, this essentially becomes an American Express to Alaska transfer opportunity. However, given the lack of confirmed details, this is also a potentially huge risk.

Why You May Want To Make A Speculative Transfer

Credit. The Points Guy. Sometimes Speculative Transfers Make Sense.

While not a “slam-dunk,” I think there are several reasons why you should consider a speculative transfer:

• Alaska Mileage Plan Offers Incredible Value. The Alaska Airlines Mileage Plan award chart offers some amazing redemption opportunities. For example, I am able to book a one-way flight in Economy between Washington, D.C. and Nashville (where the family of my wife lives) on American Airlines for only 4,500 Mileage Plan miles. In addition, you can fly one-way Business Class between the East Coast and Europe for only 45,000 Mileage Plan miles.
• Alaska Airlines Has Incredible Airline Partners. As Alaska Airlines is part of the Oneworld Alliance, you are able to book flights on carriers such as American Airlines, British Airways, Cathay Pacific, Japan Airlines, Qatar Airways, and more. However, what makes the Alaska Airlines program truly special is the list of non-Oneworld partner airlines. This list includes Aer Lingus, Condor, Korean Air, LATAM, and fan-favorite Starlux. In fact, Alaska Airlines has the only award program where you can book Starlux flights with points and miles.
• The Alaska Airlines User Interface (UI) Is One Of The Best. The ease at which you can find award space on the Alaska Airlines website, which still has an award calendar, has incredible value.

What Are The Main Risks

The decision to speculatively transfer points to HawaiianMiles is not one that should be taken lightly. While the value is clear, there are still some significant risks:

• The Deal Falls Through. Despite the DOJ approval, and pending DOT approval, the deal is not finalized. If the deal does not receive full approval, but you made the speculative transfer, you now have your valuable points stuck in the Hawaiian Airlines HawaiianMiles program. Without a clear liquidation strategy, you may be forced to make some “bad” redemptions or in the absolute worst case, abandon the points altogether.
• The Potential For A Devaluation. There is always a chance, that even if the deal receives approval from both the DOJ and DOT, Alaska devalues the Mileage Plan award chart due to the new influx of points.
• Time Lag Between Transfer And Redemption. Are you okay with your points sitting in a HawaiianMiles account for 3 months? 6 months? 9 months? 12 months? This is a classic “time value of money” scenario. Would you exchange 1.0 American Express Membership Rewards points today, for 1.2 Alaska Airlines Milage Plan miles in 12 months? Given the two risks mentioned above, this additional risk may be too much for most people.

The risk is potentially relative depending on your stash of American Express Membership Rewards. If you only have 100,000 Membership Rewards points, a 50,000 point speculative transfer is 50% of your total point stash. On the other hand, if you have 500,000 Membership rewards points, a 50,000 point speculative transfer is only 10% of your total point stash. If you find yourself in the second scenario, you may be more likely to take the risk, given the reduced downside impact, but massive upside potential.

What Is My Plan

Credit. Hawaiian Airlines. Hawaiian Airlines Offers Reasonable Redemption Rates On Flights To Hawaii.

First of all, I am extremely fortunate to find myself in the American Express Membership Rewards “point rich” category. At this time, I have over 500,000 points with American Express. I have points to play with. If I turn these points into HawaiianMiles miles, I will not miss out on other redemption opportunities. With that being said, I still like to have an “exit strategy” for any points I transfer. Thankfully, HawaiianMiles miles do not expire.

Here are my two exist strategies:

1. Use The Points For An Award Flight. I could redeem 100,000 HawaiianMiles miles for any of the following: round-trip Business Class to Hawaii, one-way Business Class to Japan or New Zealand, round-trip Economy Class to Japan or New Zealand, island-hop ten times in Hawaii, etc.
2. Use The Points To Upgrade An Economy Class Fare. Step 1: find an incredibly cheap Economy Class deal on Hawaiian Airlines to Hawaii. Step 2: Use the 100,000 HawaiianMiles miles to purchase two upgrade certificates. I would then use any “spare” HawaiianMiles miles for an Economy Class ticket for the non overnight leg.

Note: In complete transparency, I still need some time to think about this decision. However, I am feeling lucky, and therefore, leaning towards transferring the points (i.e. 84,000 Membership Rewards points converting to 100,000 HawaiianMiles miles). 

Final Thoughts

Transferring your American Express Membership Rewards points to Hawaiian Airlines HawaiianMiles miles following the approval by the DOJ of the Alaska Airlines and Hawaiian Airlines merger comes with both potential benefits and risks. If those HawaiianMiles miles eventually turn into Mileage Plan miles, there is a huge upside as Alaska Airlines has a wide variety of redemption sweet spots. However, the merger is still in its early stages, and how it will ultimately impact award charts, availability, and pricing remains uncertain. Speculative transfers carry inherent risks, including possible devaluation of points and limited flexibility if better opportunities arise elsewhere. At the end of the day, this decision comes down to your own personal risk tolerance, but if you are like me, and can manage the risk… Go For It!