Why free upgrades are getting tougher on Alaska Airlines

 Alaska Airlines is selling more first class seats than ever before. Photo: Alaska Airlines 

Alaska Airlines is selling more first class seats than ever before. Photo: Alaska Airlines 

If you're used to getting free upgrades on Alaska Airlines, I have bad news. Alaska says it is selling more seats than ever up front, making fewer free ones available for frequent travelers. 

In April, I noted Alaska was selling about a third of its first class seats, a major improvement from a few years earlier when Alaska admitted it was selling only one first class seat per flight. Unsold seats usually go to frequent fliers, at no charge. 

Now, Alaska says it is doing even better. In the second quarter, Alaska sold 35.7% of first class seats, an improvement of 1.6 percentage points compared to earlier this year. 

How is Alaska doing it? Two ways. First, it is selling more discounted first class seats in advance. You can now fly first class between Los Angeles and Seattle for about $500. Second, Alaska is selling more upgrades at the gate. 

"We've been very pleased with our first class revenue performance," Chief Revenue Officer Andrew Harrison told investment analysts. "Upgrade sales at the gate increased 17%."

Harrison predicted Alaska will improve further later this year. "I still believe there's big opportunity to continue to invest in our product in the first class and increase that," he said. 

Alaska announced a second quarter profit of about $230 million on Thursday. Here's some of what executives said on the conference call to announce results:

  • Alaska now operates more than 1,000 flights per day, a threshold it only crossed on July 2. 
  • Seattle's airport is so crowded Alaska can't add more flights during peak times of the day. But the airline is getting more efficient with the space it has. The operations team in Seattle recently devised a system that allows Alaska to taxi side-by-side in opposite directions. 
  • In the second quarter, Alaska canceled just 0.5% of its flights, while 88.2% of flights arrived on time.
  • Alaska has roughly 140 737s. Of those, it owns 80 of them free-and-clear, which is a high ratio for a big airline. 
  • About 59% of customers book through Alaskaair.com 
  • Alaska has about 51% market share in Seattle, the same as it had in late 2012. Why is that important? Because since 2012, Delta has been growing massively in Seattle, and it has tried to steal some of Alaska's share. Delta has grown in Seattle, but at the expense of other airlines, not Alaska. 
  • Alaska is taking delivery of 11 737-900ERs this year and 19 next year. It is retiring smaller Boeing 737-400s.  The 737-400s carry 25% fewer passengers but burn roughly as much fuel as the 737-900s.