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Southwest Devaluation 2015 – Probably Bad News
Southwest is a company that either brings out great love or great hatred in people. Admittedly I am not a huge fan of the airline. There is something about the cattle call that they call a “boarding process” which rubs me the wrong way.
Of course, their companion pass is quite generous and they are the largest airline at LAS, so I do fly with Southwest from time to time. Unfortunately flying with them with points may soon be more expensive. Yesterday, the company made an announcement that was so vague in its details that it can only mean one thing. This is going to be bad.
What They Said
We created Rapid Rewards® because we think you deserve to actually feel rewarded. And, from time to time we must make some updates to our program. 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.
What That Means
Um…Isn’t this how the system currently works? Right now the number of points needed is based on the cost of the fare. Isn’t the fare based on the “destination, time, day of travel, demand, fare class, and other factors”? Why, yes it is.
Looking at this objectively, there are only two reasons I can think of as to why Southwest would make this announcement without all of the details. Lets take a look:
- They haven’t decided exactly what the changes are – This could possibly be the case. Even if it is true, they have decided that a new pricing scheme is going to be implemented which is bad.
- The changes are so drastic that they don’t feel we can handle the news all at once – I firmly believe this is the case. After seeing the backlash Delta has received, I think they are going to roll out the details slowly.
On The Plus Side?
Their announcement also tries to spin a positive message by emphasizing the pluses of the program including: unlimited award seats, no blackout dates, no change fees, etc. This is another sign the changes will be bad. When they go out of their way to emphasize the good, the bad must be really bad.
Plus with dynamic pricing, while there may be unlimited award seats and no blackouts, they can make a flight so expensive that it wouldn’t make sense to purchase the ticket with points. So those “benefits” may not truly be benefits.
Southwest is already a fully revenue based system. Theoretically since points earned and points spent are based on airfare costs, they should never have to change their pricing. Of course last year they lowered the value of Rapid Rewards points by about 15% and now who knows what is going to happen.
I certainly hope I am wrong, but the way this announcement was made, I am bracing for the worst. Between this move and Delta’s many changes, it could be that airline loyalty is quickly becoming a thing of the past.
What do you think? Let me know in the comments.
Miles to Memories has partnered with CardRatings for our coverage of credit card products. Miles to Memories and CardRatings may receive a commission from card issuers.