Alaska Airlines unveils massive premium cabin overhaul in high-end travel race

Alaska Airlines is overhauling cabins across Alaska and Hawaiian Airlines to add hundreds of high-end seats and building new airport lounges, banking on customers' continued willingness to pay a premium for travel luxuries to grow its profits into the next decade.

The changes were announced ahead of Alaska's investor day in Seattle on Tuesday, when the carrier's executives will face questions on the new offerings and how the airline is coping with the profit-eating surge in jet fuel this year. They are also likely to tie the new products to the company's prospects to grow its co-branded credit card and loyalty program, which have generated billions for airlines.

Tune in at 10:20 ET as Alaska Airlines CEO Ben Minicucci joins CNBC TV. Watch in real time on CNBC+ or the CNBC Pro stream.

Even with the cabin changes, Alaska, which completed its merger with Hawaiian Airlines in September 2024, will continue to operate the two airlines as separate brands.

U.S. airlines have been spending the past few years revamping their cabins to add more premium seats, often at the expense of coach seats, since first-class fares can go for many times more than an economy-class ticket, and customers keep paying to sit closer to the front.

Alaska is far from the first carrier to remodel its cabins, but that might work to its benefit when the fresh product hits the market.

"There is an advantage to being the last mover in that you've seen what your competitors have and if you want to you can try to one-up them," said Henry Harteveldt, founder of Atmosphere Research Group, a travel consulting firm.

The Hawaiian Airlines Airbus A330s, used for flights to Hawaii, Asia and Oceania, have "aging interiors," said Shane Jones, Alaska's head of fleet.

The new options will bring the total count down to 254 seats from 278 on those planes. Jones said the new options will give Alaska a range of premium choices, from the honeymoon splurge to repeat Hawaii visitors looking for a step-up from coach.

He told CNBC that the airline spent months looking at fabric samples at the company's headquarters in Seattle under different types of lighting to pick the right one.

Some shades were too bright pink, while others were too drab. He said that the airline wanted to evoke the colors and mood of tropical escapes to Hawaii with a wave pattern sewn into the seat, and that the carrier evaluated how many waves were enough because too many could be dizzying.

Meanwhile, Alaska has been expanding its international flying from Seattle, including to London, Iceland and Italy, with more destinations slated to begin this fall. International travel demand has held up despite surging fuel prices, airline executives have said.

Alaska is also planning to launch early next year a rewards debit card for its Atmos loyalty program, expanding the carrier's co-branded cards it offers with Bank of America . Airlines, including Southwest Airlines and United Airlines , have started offering similar rewards cards through their partner, JPMorgan Chase.

Alaska said the new debit card is aimed at younger and new arrivals in the U.S. and said it "expands the program's reach beyond traditional credit products."

Also, starting on Thursday, Atmos frequent flyer program members will have to choose between earning miles by distance traveled, price of the ticket or segments flown. Airlines have largely moved away from distance-based earnings, instead prioritizing how much travelers spend on the airline or on rewards credit cards.