Another Southwest Devaluation …Sort of …Probably

Southwest Airlines isn’t my favorite carrier, but I definitely think they have their uses. I’ve flown them many times, particularly on short flights from my home in Southern California to Northern California, Las Vegas, or Phoenix, and can’t really complain much about the value. Some of my one-way flights were for just 2.5K points, which I usually transferred from Ultimate Rewards. You simply can’t beat that value.

Southwest Devaluation
This is most likely a devaluation

Almost one year ago, Southwest devalued their Rapid Rewards program to make redemptions less valuable by about 15%. Any devaluation is a bummer, but this one was relatively mild and good values could still be had.

Today, Southwest released some updates to their Rapid Rewards program that basically state that prices will now essentially be dynamic. Here’s the important text:

Beginning April 17, 2015, the number of Rapid Rewards Points needed to redeem for certain flights will vary based on destination, time, day of travel, demand, fare class, and other factors. However, there are still many flights which will stay at the current redemption rate. And don’t forget that when fares go on sale, so do the points needed for redeeming for a reward flight on those fares.

So there will be changes to a lot of tickets, but not to others. You can bet that more popular markets and flights will have increased prices on most occasions, but it’s hard to say exactly how this will affect the majority of the flights. It would be an interesting analysis to note several airfares the day before the change and review them again after the changes take place.

This is a Southwest devalution in my mind. While some prices may get cheaper, you can bet they’re making this change to increase a majority of prices. I find this interesting because, in theory, this is what a revenue-based redemption model already does to a large extent.

More popular routes, days, and times, are generally more expensive anyway. And since the amount of points required for a redemption is based on the actual price of the ticket, it sort of already works the way Southwest describes the new program will.

I will be curious to see how this works out.

HT: FlyerTalk

9 thoughts on “Another Southwest Devaluation …Sort of …Probably

  1. Hard to tell what their intent is here, but I’ll take a guess:

    Since points and Cash fares are connected at WN why increase cost in points but hold fares steady? I’m guessing that they’re going to use this leeway to limit the number of seats booked per flight with points. Should a certain threshold be met of seats booked with points on each flight they’ll steadily ratchet up the cost per seat to try to deter point bookings and earn cash.

    Cash is king, and no one wants to be paid with points when they could get cash instead. I’d also wager that a higher % of WN flyers cancel their flights when booked with points than with cash. Limiting seats booked with points could help limit last minute cancellations.

    Really scratching my head as to the lack of details. As @Saianel on twitter put it, “How very Delta of them…” If this gets really bad we could try some kind of DDoS Attack where we all book seats on a specific Southwest flight, and then 15 minutes before it takes off we all cancel them.

  2. Wow. So they just choose whatever award amount they want at any given time? I am very uncomfortable with the lack of transparency and set amount for awards. At least if they devalued to a ridiculously low amount, we would know what the future held. The unknown is too scary for me. Guess I will you my points now. Too bad to because I just got use to flying SW since the Wright amendment finally expired here in dallas.

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