Things are looking good for the Membership Rewards-Hawaiian Airlines-Alaska Airlines play

Last month I wrote about one possible use of the world’s most-hoarded, least-useful loyalty currency, American Express Membership Rewards: transferring them to Hawaiian Airlines HawaiianMiles in anticipation of a successful merger with Alaska Airlines and the ability to eventually transfer them to that much more valuable airline currency.

That “eventually” turned out to be sooner than expected, as Alaska announced the details of the loyalty plan connectivity last week, and it’s supposedly already operational through a Points.com backend. I’m currently testing it for myself, since it takes a few days to complete the cycle of moving Membership Rewards points to HawaiianMiles and then moving them to Mileage Plan.

I’ll post an update when the cycle is completed and I’ve confirmed it works as advertised.

Why it matters

The main attraction of this play is that Alaska Airlines miles are extremely valuable for domestic Alaska and American Airlines flights and internationally for flights on the oneworld alliance, but relatively difficult to earn compared to the direct transfer partners of Chase Ultimate Rewards and American Express Membership Rewards.

For the time being, this indirect transfer channel makes them as easy to earn as any direct Membership Rewards transfer partner.

Long-term risks

As is often the case, the two primary risks in this play are moving too fast and moving too slow.

By moving too fast, I mean speculatively transferring millions of Membership Rewards points to Mileage Plan, and then seeing that program devalued over the years it takes you to spend down those miles. I often get 5-6 cents per mile redeeming Mileage Plan miles on short-haul domestic tickets or business class tickets to Europe, but if those redemptions became revenue-based I’d feel silly for sitting on a million miles suddenly worth just a cent each.

By moving too slow, I mean waiting for another transfer bonus to HawaiianMiles in order to stretch your Membership Rewards points even further, while in the meantime the airline’s contract with American Express expires on its own or is broken early, leaving you with a stack of miserable Membership Rewards points instead of a bounty of precious Mileage Plan miles.

How I’m playing it

Like most things in this game, I’m planning to split the difference: I’ll move a couple tens of thousands of Membership Rewards points over every month, waiting to see if another transfer bonus comes along. If it does, I’ll empty out my account immediately, and if it doesn’t, I’ll end up moving over most of balance over the course of the next year anyway. And, of course, I can always speed up or slow down the transfers depending on other transfer opportunities.

Speaking of other transfer opportunities

I did not mention in my early Membership Rewards post transfers to Hilton Honors, which reader Bryan helpfully mentioned in the comments. Especially given the current transfer ratio of 1-to-2.6, if you value Hilton Honors points at 0.5 cents each this is a solid way to get rid of Membership Rewards points. It turns the 4 points per dollar earned on dining spend on a card like the American Express Gold card into a 10.4-point-per-dollar Hilton Honors earning rate.

I get a lot of value from Hilton Honors and spend my points almost as fast as I earn them, so I happily topped up my account during the current transfer bonus. However, unlike Mileage Plan miles, I can easily earn Hilton Honors points through manufactured spend on my American Express Surpass card, so I didn’t feel any urgency to empty out my Membership Rewards account, even though I know I’d eventually get decent value from the resulting Hilton Honors points.