It’s long been expected that Southwest would be rolling out a new frequent flyer program early in 2011. They’ve been getting fairly stingy as an airline across the board over the past year, they even started enforcing the expiration on their drink chits. I certainly expected the new program to be a gutting of the old one, and it apears to me that’s the case.
Southwest introduced its new fare-based Rapid Rewards program today, moving from a credits system (based on segments flown) to a points system (based on dollars spent, with redemptions based on cost of paid airfare for the flight). Overall they align themselves more with the programs of other ‘low cost carriers’ like JetBlue and Virgin America rather than the mileage programs of major airlines. And while there’s a great deal of marketing hype about offering last seat availability, on the whole and for most customers the program appears to offer less value than before.
In my experience the other low cost carriers view their frequent flyer programs as a tax rather than a profit center, something they’re obliged to offer because everyone else does and something they just want to keep as inexpensive to run as possible. Seems that Southwest has gone the same direction, squeeze out expense and benefits while pretending they’re offering a strong value proposition.
There’s already extensive discussion on Flyertalk. And the basics of the earn/burn structure of the program are as follows:
Base earnings are 6 points per dollar of fare (not including add-on taxes) for Wanna Get Away fares, 10 points per dollar for Anytime fares, and 12 points per dollar for Business Select fares.
Redemption prices are 60 points per dollar of fare (not including tax) for Wanna Get Away fares, 100 points per dollar for Anytime fares, and 120 points per dollar for Business Select fares. All seats are available for redemption, with no blackout dates.
… Points do not expire provided there is earning activity in your account within the preceding 24 months.
If you fly cheap Southwest fares (earning 6 points per dollar) and wanted to redeem those points for a discounted $300 roundtirp fare (at 60 points per dollar), you’d have to spend $3000 to get it. That amounts to a 10% rebate on your airfare.
If you fly cheap Southwest fares (earning 6 points per dollar) and wanted to redeem those points for an Anytime $699 roundtrip fare (at 100 points per dollar), you would have to spend $11,650 before earning enough points to do so. That amounts to a 6% rebate on your airfare.
In contrast, flying $350 trancons with United and redeeming for last seat availability requires less than $4000 in spend.
Less than $2000 for a Saver award, more like an 18% return. You only get there with Southwest if you earn on high business fares and spend on cheap leisure fares. I get that’s the intent of the program, but it’s a darned shame and less valuable than what most traditional frequent flyer programs offer.
It’s also far more complex than a straightforward mileage system that consumers already ‘get’ and more complex than a credits system based on flights flown. How many customers can do the math without Excel?
Southwest’s ‘elite status’ is being revamped, 25 one-way trips gets you priority standby and a 25% bonus on points earn from your flights. They’ve added an upper tier which requires 50 one-way trips which gets you free Wi-Fi where available and a 100% points bonus.
One of the popular features of the program in the past has been “Companion Pass,” you get to take someone along free when you travel, and that more or less continues.
Of course Southwest doesn’t get you any meaningful option of premium cabin international travel. Now, the new program does offer redemptions on other carriers, if you’re a co-branded credit card holder Southwest will buy you a ticket on another airline. And you won’t do better than a 1% rebate that can be spent towards paid travel with the credit card, unlike at least Capital One cards offering ‘double points’ and thus up to 2% rebate on travel (a good cash back card is still superior, but it’s nonetheless illustrative to point out that travel on other airlines via this program is actually a worse deal than you even get through Capital One!).
This program holds zero appeal for me.