Southwest Rolls Out New, Straightforward Rapid Rewards Program

I never thought this day would come. Southwest has been talking about rolling out a new Rapid Rewards program since, I believe, the airline first took flight in the 70’s. And today, the airline is finally doing it, effective March 1. It’s a dollar-based program that is very straightforward. That part I like . . . a lot. It also, however, has a lot more tiers than I would expect for an airline that likes to say it’s an airline for everyone. And there’s also little thing about the Southwest credit card that really bugs me. But overall, it’s a good move.

Let’s start with the basics:

Southwest New Rapid Rewards Structure

Southwest is leveraging its three different fare categories by assigning different earn rates depending upon the category. That’s perfect. Without this, someone who spends $300 on a 500 mile flight will get the same number of points as on a 2,000 mile flight. But now, that $300 fare will be in a higher category for the short haul so it will earn more points. It also gives more reason for people to buy up to the higher fare categories, depending upon the difference in fare.

But where this is really differentiated is in the redemption. We’ve seen Virgin America and JetBlue put out similar programs but they’ve never been so clear on how they calculate redemption points. In this case, it’s 10 times the earn rate in each category. Makes sense. Let’s do some math.

Let’s say I was thinking about buying a $99 Wanna Get Away fare from LA to Denver. If I pay for it, I’ll earn six times that amount, or 594 points, when I fly. Let’s, however, now say that I want to redeem points instead. It will cost sixty times that, or 5,940 points. So far so good. If I decided to buy an Anytime fare for $251, it would earn me 10 times the points. You get more when you buy a higher fare. But the same thing goes for redemption. It would cost 100 times for that.

Why would you redeem for an Anytime fare? Well, when you redeem points, it’s treated like a fare in that category. Let’s say two weeks later you need to change your flight. If it’s more expensive, you’ll have to pay the “fare” difference in points. If only Anytime fares are available, that means the flight is probably pretty full or it’s last minute, so it makes sense to charge a point premium for that as well.

What if you don’t have enough points? While you can’t pay with cash plus points, you can buy points for $50 for 2,000 points and then $25 for each additional 1,000. So you can use your award whenever you want on any fare, as long as you’re willing to buy those additional points (which admittedly, cost more than the value you’ll receive but are good for top-ups).

So what don’t I like about this? This is an airline that has long been proud of its egalitarian model. But it has moved away from that significantly over the last few years, and this continues that trend. Southwest has long had its companion pass for its most frequent fliers and that will stay. A couple years ago it introduced the A-List and now there’s another tier, A-List Preferred. Here’s what you get:

Rapid Rewards Elite Status

I’m not really sure why the A-List Preferred matters here. Yeah you get bonus points and free wifi, but that’s a pretty small recognition of so much flying. (I do love free wifi as a benefit in general, however.) It seems like they need to beef this up further if they really want to make it relevant, but that gets further into this tiered structure that Southwest has always eschewed. Also, not sure why they didn’t try to fold the companion pass earning into the standard format here instead of just keeping it as a legacy standalone. But it does seem that Southwest is convinced it needs elite tiers and is strengthening them over previous offers. The old A-List only gave priority check-in/security and an earning bonus. That’s not bad, just different.

The only part that really does bother me is the new redemption options beyond Southwest flights. You can now redeem points to fly on a bunch of other airlines internationally as well as car rentals, hotels, etc. Only one problem. Southwest will only let you do this if you have a Southwest credit card from Chase. The technology for this is being outsourced, so I assume it’s just the same thing Chase offers its own reward cardholders. My assumption is that Southwest had to make this work economically to make it possible, and that meant giving Chase this sweet deal which will only encourage new signups. But I still don’t like it. Forget about the people who don’t want a Southwest credit card, but what about those who simply can’t qualify for a card? This is not very egalitarian at all.

Now let’s talk transition. The new program starts on March 1. If you have award tickets already earned, you can still use those with no change in the program. If you have credits, you’ll be able to convert points from the new system to old credits to finish it off and earn one last award. The price is 1,200 points per credit. Also, Southwest is now changing from earning during a rolling 12 month period to a calendar year instead. So if you have a companion pass or an A-List membership that expires before the end of the year, it will now be extended to the end of 2011. If it expires in 2012, it will now be good through the end of that year.

Overall, I like what they’ve done here. The earning and redeeming is very simple and sensible. The increased tiering of the program bugs me as someone who has been flying Southwest since Rapid Rewards was the Company Club, but I understand why they’re doing it. It’s all about catering to the top travelers, even though that’s historically a very un-Southwesty thing to do. The only thing I don’t like is the credit card requirement for non-Southwest redemption, but overall, they’ve done a really good job here.

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38 Comments on "Southwest Rolls Out New, Straightforward Rapid Rewards Program"

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Chris
Guest

Not sure yet what to think about these changes. I am a A-List member who has earned a companion pass the past 8 years. I doubt I will get the Chase credit card, just hope they still have Rapid Rewards Bonus offers.

Chris

David SF eastbay
Member

Wouldn’t it just be easier all around to just give one point for every dollar spent?

I guess they are basing this (6/10/12pts) system on the fact that all businesses think the American people are stupid and will spend more money “…so I can get 12pts instead of 6”.

Gary
Guest

I get why they’ve done this, but the new program is less rewarding than the old so naturally I don’t *like* it. And 3 earning tiers and 3 redemption tiers, with different points multipliers for each, hardly strikes me as simple. Maybe I’m just not good at math.

Neil S
Guest

Agree. Same as when jetBlue relaunched their program. It’s nearly impossible to figure out how many points I get for flying or need for flying.

Sanjeev M
Guest
I wish they had just given you rewards like 5% of whatever you paid. So if you paid $200, you get $10 to use (maybe after a certain waiting time period). This way if you have $10 in “Southwest Money” or whatever, you would be more inclined to use it on things like EarlyBird, etc, which costs less to Southwest than actually redeeming for a full ticket. But what they are releasing seems to be much better than before. I wish all airlines had a tier like Frontier’s Ascent, 15,000 miles or equivalent with some benefits but not all of… Read more »
Nick Barnard
Member

Sanjeev, if you stay in the same fare class, they are giving 1% of what you spent back in fare dollars, they’re just calling them points for conversion between fare classes. If you go outside of your fare class there is then the 12/10/6 adjustment ratio. For a business traveler who books business select for business but travels in leisure at “Wanna get away” (these fare class names are too damn folksy for my taste.) it’s like getting 2% back on your business travel.

Sanjeev M
Guest

That makes sense. Thanks for the explanation.

I’m still not sure though if you can use those points on extras like early bird without using points for the whole ticket (basically cash + points)? E.g. so does EarlyBird check in cost 10 * 10 = 100 points? Maybe I missed that in the FAQ. Should go and check that. Thanks!

Robert S
Guest

I think it’s a roughly 10% “rebate” of fare dollars, not 1%. Fly 10 short cheap ($60) flights and you earn around 3,600 points. Redeem for a single short cheap ($60) flight and it will cost you around 3,600 points. Varying, of course, for the three different types of fares.

Nick Barnard
Member

Robert, You’re right.. I went typing a bit too fast..

Ron
Guest

My employer has a contract with Swabiz that gives double Rapid Rewards credits (two credits per one-way fare flown instead of one). What’s going to happen to such deals under the new program?

James
Guest

naa, the companion pass is the only thing that still makes fooling with SW miles/points worth it. If it weren’t for that, you are better off to get a 2% pay-you-back credit card and forget it.

Laura
Guest
Sucks sucks sucks! I am in San Francisco and I routinely go to LA for meetings. They aren’t fun trips because I am forced to do them in one day and the flights are always full BUT Southwest used to reward me for using them rather than Virgin or American Airlines since I would get credit for a round trip. I understand that maybe its not “fair” when comparing that flight to a NY to LA but that is what set Southwest Airlines apart. The rewards was simple, easily rewarding, and fruitful. Not only can I wrap my head around… Read more »
Dan
Guest

Not happy about this at all. The only reason I even have the Chase card is because of the awesome rewards program. Now, it’ll be harder for me to earn free flights (read spend more money). Honestly, I’ve been a SW fan for years, but this really makes it hard to justify having the Chase card and dealing with the cattle cars. I’m switching to Virgin where they have Wi-Fi as a fleet-wide standard and much more comfortable seating. Sorry, SW, it’s been great.

Chris Cardinal
Guest

An oldie but a very relevant goodie:
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Bill from DC
Guest

lol!

Jon
Guest
I agree with the “don’t like it” comments on here. For those of us that use SWA for intra-California travel, we are losing. I’ve been a loyal SWA customer and RR member for many years for a variety of reasons. One of those was getting two credits for a round trip. Using the new system, it will take me three round trips to accomplish the same thing using the $59 one way Wanna Get Away fares we see between CA cities. Old system, 2 credits for the round trip or the equivalent of 2400 points on the new system. New… Read more »
MeanMeosh
Guest
I’ve been doing the math, and while this is a devaluation, I don’t think it’s as severe as you think it is, at least not all of the time. An example using your numbers: Right now, you need 16 RR credits (8 roundtrips) to get 1 free flight. In the new system, 8 roundtrips = 59 each way * 6 * 16 segments = 5,664 points earned To get that same flight free = 118 total fare * 60 = 7,080 points needed. You would have to fly 10 roundtrips to get that ticket (59*6*20 = 7,080). Essentially, the conversion… Read more »
Scott
Guest

On the newrapidrewards.com site, here out the Chase RR card will change 2 points per dollar spent with “Southwest and Southwest Rapid Reward Partners” 1 point per dollar spent all other. 3000 points on the anniversary of the account. for the “Plus” level account. For the “Premier” level account it double the points of the “Plus” level account.

Source: RR Partner tab of the newrapidrewards.com page.

KPO'M
Guest

Overall, it appears to work out roughly even for me. One thing I haven’t found out is how drink coupons will be earned. It used to be 4 per every “free flight” earned.

Manu
Guest
I’m dissappointed about the changes… one thing that bothers me is when a company tries to spin a change as something that is good and better for its customers. This is clearly not better for the majority of Southwest’s customers, who I think are usually the shorter flight, regional and business flyers. Now this large core of customers will see this reward program diluted. Like many I exclusively look at Southwest for my business and personal travel within the US. Most are the shorter range flights (less than 2 hours of flight time). I probably fly Southwest about 30 to… Read more »
Manu
Guest
CF, you make good points from the other side, but your point was not how it was sold. It was sold as “exciting enhencements”… for the vast majority of SWA customers, these are not exciting nor enhancing. Saying that they are is duplicitous. The RR program was what created brand loyalty for Southwest. I cause many customers to use them exclusively. I don’t believe this will be the case any longer. And I disagree with your thought that SWA should tell a customer like Jon goodbye… Jon is primarily the kind of loyal customer that made SWA what it is… Read more »
Jim
Guest
I don’t see how this would really benefit anyone. Under the old system, you flew 8 times and then got one free. Under the new system, assuming each ticket price is the same, you need to fly 10 times to get one free. Of course, if the ticket price is not the same, you lose the ability to buy cheap tickets and redeem for expensive tickets like you could before. I can really think of very few cases where people will benefit from this. One example would be someone who flies with an anytime fare and then redeems for a… Read more »
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JJG
Guest

I understand how this is in the company’s best interest. Still, this absolutely kills tha ability to use a Reward Ticket for near peak holiday travel. I know those seats were limited but if you got one you were golden. We’re using 3 Reward tickets to justify a Spring Break cruise. No way if we had to pay for airfare via RR credit or actual cash. Was I ‘jobbing’ the system? I guess.

Robert S
Guest
Cranky, I agree with you that it’s rather mean to require the Chase credit card to qualify for some of the benefits. After getting lots of SWA Chase card offers in the mail over the last year I finally applied… and was declined (for my first denial ever). So even as an A-List and CP holder I don’t get to share in the “other redemption options” part of the new program. There’s one other thing that bugs me. Every other airline allows last minute redemptions when seats are open (some for a fee, and some like United and Delta have… Read more »
srj
Guest

The company publicly stated that this is a money making proposition for them. Hence, the consumer is loosing. I was a loyal SW flier for years but my loyalty has ended. Will probably switch to Alaska

Ron
Guest
I agree the whole points and multipliers thing is confusing. Here’s another way to look at it. For wanna get away fares, you earn 6 reward cents per fare dollar you pay. For anytime fares you earn 10 reward cents per fare dollar, and business select gets you 12 reward cents per dollar. You can redeem your reward dollars for anytime fare at a 1:1 ratio. When redeeming your reward dollars for a wanna get away fare you get a 40% discount off the already discounted fare, whereas buying a business select fare with reward dollars extracts a 20% premium… Read more »
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[…] is an airline blogger whose opinions I normally respect. His take is that the changes are a “good move” – I can’t fathom what calculus he’s using to arrive at that decision. Perhaps he’s […]

Pablo
Guest
DISAPPOINTED: SW joins the other airlines in scamming the public. The new “improved” rewards program is crap in a number of ways. The worst way is the way they market it. No strings attached. No blackout dates. Well no but…SW has jiggered seat availability . Suddenly any flight you may have cared to book (even if one month in advance) is unavailable. Surprise….few if any direct flights. Surprise… flights rarely available during hours you may have cared to get onto a plane. Surprise…the new points system actually costs you more with SW using a number of tricks that push you… Read more »
Judy
Guest

Only an industry hack could consider this program straightforward.

michelle moravec
Guest
I am SO lucky that Virgin Airlines is now flying out of PHL and that the United/USairways/Continental group can now beat prices, because Southwest has now lost my business for good. I signed up for their credit card right before the ridiculous rewards program conversion. In the process I never saw my ?flight segment? old award system arrive. All I could ever find was reference to their damn ?points? After CHASE the credit card company finally told me where to find the ?flight segment? aka ?old? awards I did only to see that they expire in a month. I explained… Read more »
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