Could Southwest’s pending devaluation hurt it more than us?

Southwest Rapid Rewards Program Updates

Historically,  Southwest has had more simple frequent flyer programs. Back under Rapid Rewards 1.0 they kept it so simple you only needed credits, which had no linkage to fare prices, segments, or distance flown. Rapid Rewards 2.0 and 2.1 still stuck with a simple approach of fixed earning values and fixed redemptions-just with 3 tiers/levels.

The part that seemed to work best for Rapid Rewards 2.0 was that the required points automatically increased as Southwest tweaked fares upward. So for Business Select redemption, you’d need 120 points per dollar, for an Anytime redemption, 100 points per dollar, and for a Wanna Get Away fare, you’d need 60 70 points per dollar of the fare. Here’s Southwest’s original example:



Looking toward Southwest’s Rapid Rewards 2.2

Its been reported that there will be further details that will be made available by Southwest on 19 February, so yes, this is pure speculation, but as you’ll see in a moment, I’m not speculating about particular city pairs, so much as potential impacts to the greater program.

I would offer that Southwest’s simple frequent flyer program concepts were not just easy for flyers but also saved on Southwest’s own overhead. By moving to dynamic pricing, could Southwest actually be shooting themselves in the foot? Could this move leave more loopholes for travel hackers to find, and open Southwest to mistake good deal fares redemptions like other airlines have endured with their more complex programs? I think so. In fact, I think Southwest would have been better to have just increased the required points per redemption, its simple, its easy, and it aligns to Southwest’s general messaging – you know what you’re going to get with Southwest. I would argue that with dynamic pricing, you won’t know what you’ll get.

So to summarize: This change, based on what we know now, is not good for consumers, and it may very well end up not being good for Southwest itself. The silver lining, could be for those of us that look for good deals, and some of folks who probably know the program better than Southwest themselves. In short: Simple is best for everyone, dynamic could backfire.

What do you think? Will this impending change open up a whole new can of worms for Southwest?

One thought on “Could Southwest’s pending devaluation hurt it more than us?

  1. I don’t think it’s a big deal. I have limited time to travel, and when I do, it’s usually peak times to travel. Mistake fares, etc… never work for me. Maybe I’m being naive, but it’s doubtful this change will negatively affect my travel. I think it’s another reason why we should earn and burn points. I don’t see how this is much different than what SW currently does. I can fly from my home to Florida for 6000 points certain days of the week, but then the price goes up to 20ooo plus other days. For the lucky people that have flexibility, they benefit. For those of us, that are locked in to limited vacation time and only certain weeks of the year when we can take a vacation, we pay a premium price. I don’t think that’s going to change.

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