The news: Alaska Airlines opened up the waitlist for a premium co-brand credit card that will launch next summer.

Loyalty members who sign up for the waitlist before the end of the year will earn 500 Alaska Mileage Plan miles and then another 5,000 bonus miles once approved—in addition to the standard welcome bonus.

What this new card will offer: The card will include a hefty annual fee of $395. Alaska Airlines only disclosed a few of the benefits cardholders will receive.

• Cardholders will earn 3 miles per dollar on eligible foreign and dining purchases.
• The premium card will offer an enhanced version of its companion fare program, Global Companion Award Certificate.
• Cardholders will also get Alaska Lounge passes, WiFi vouchers, and waived award ticket fees.

The bigger picture: After completing its acquisition of Hawaiian Airlines in September, Alaska Airlines is revamping its strategy to boost profit.

Growing its loyalty program and associated co-brand cards will be a large part of this effort.

• In its Investor Day presentation this week, it set a goal of $1 billion in incremental profit by 2027 as part of its Alaska Accelerate strategy.
• And revenues from co-brand programs can be a huge chunk of airlines’ overall revenues and profit: In Q3 2024, 13% of Southwest’s total revenues came from its loyalty program—a large majority of which can be attributed to its co-brand cards.

The competition: Adding a premium card to its portfolio can help Alaska Airlines align with consumers’ expectations. Delta, Southwest, and United, for example, all have premium tiers in their co-brand portfolios. Alaska Airlines currently only offers one consumer card, the Alaska Airlines Visa Signature card, and a business card—both through Bank of America.

Premium cards are vital to the airlines’ card offerings because they attract more affluent travelers and can often bring in more volume than the lower-tiered cards. The high annual fees can also help offset generous rewards and bring in more revenues.

Our take: While the $395 annual fee may scare off some travelers, more affluent consumers have shown that they are willing to pay the price for a strong rewards proposition. And thanks to the card’s unique waitlist promo, the card has the chance to roll out with an already sizable cardholder base.

If the card’s full rewards offering is strong enough, the premium card could be a game changer for Alaska Airlines’ journey to boost its profitability as part of its Alaska Accelerate strategy.

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