Has Southwest Figured Out the Perfect Way to Stick it to their Members?

The best for flyers is where you pay a fixed number of points, and can get significant value. For instance, a 25,000 mile award might get you a $500 ticket… or a $1000 ticket.

It’s bad enough when a program goes ‘revenue-based’, say that a point is worth a penny apiece and a $500 ticket costs 50,000 miles and a $1000 ticket costs 100,000 miles.

Southwest went revenue-based in 2011. They weren’t even offering a fixed value per point. Instead, points were worth less as tickets were in the more expensive fare classes.

  • “Business Select” cost 120 points per dollar ($0.0083 cents a point)
  • “Anytime” cost 100 points per dollar (1 cent per point)
  • “Wanna Get Away” fares were 60 points per dollar ($0.0167 cents a point)

In 2013 Southwest proved that even revenue-based programs devalue. Just two years in they reduced the value of points on Wanna Get Away fares from 1.67 cents apiece to 1.43 cents apiece.

Yesterday Southwest devalued again. Only this time they broke away from even having a fixed value for points.

Instead of being revenue-based where points are worth a certain amount period, or a certain amount for certain types of fares, they now have a value which changes — and is unpublished.

Based on some early searches it appears that what Southwest seems to be doing is charging amounts between 70 and 80 points per dollar of airfare (so between 1.25 and 1.43 cents per point). And they are giving you less value for points on more expensive itineraries.

In other words, the more you need your points the less valuable they become. And since there’s no longer a promised value, they can change it at any time.

I still like that their award tickets are cancellable without penalty. But I wouldn’t be motivated to earn their points in all but the largest quantities with least effort.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. It’s all from that crap known as ObamaCare. All these devaluations, both airlines and hotels, is because these companies have to pay for everyone’s FORCED healthcare, plus Obama’s “War on Whites”.

    The only other reason I can think about a cheapskate airline like SouthWest devaluing their economy class junk is that they have to pay for Hillary Clinton’s baggage, and she has way too much of that.

  2. What the hell are you talking about Ed? This has nothing to do with that. By your logic, that must explain British Airways’ YQ/YR since they have to provide universal healthcare to everyone in the UK.

  3. I was actively pursuing Southwest VISA points by using it as my primary purchasing card for the last 7 months. But now I’m switching back to Starwood.

  4. I love the guy who parodies the 700 pound Obama hating rednecks, probably here because they mostly fly Southwest to visit other Walmarts.

  5. I wonder if Ed and Greg are the same person, posting from both sides of a split personality. Sure seems that way.

    Although I have to admit the part about paying for Hillary’s “baggage” was pretty funny.

  6. Minor typo: 120 points per dollar is either $0.0083 per point, or 0.83 cents per point. Similarly, 60 points per dollar is either $0.0167 per point, or 1.67 cents per point.

  7. I actually thought Ed was joking, because it’s hard to believe anyone would chew off their leg in public like that. To compare my opinion which is that of the majority of the mainstream world smells like Buford too.

    In most modern nations they teach in their schools that the American redneck Obama hater is the most ignorant ruinous person on the planet. Their perfect Icon GW Bush destroyed our reputation in the world permanently.

    In Germany where I live part time they fear our right wing even more than other religious extremists because they seen in them the madness that took over their country, and which they learned from.

  8. Hey guys!!! Leave Ed alone – he’s correct. Everything that Obama has done has a trickle down effect on EVERYTHING!! OK, now am the one who’s ‘gonna get it from you guys this time. So be it…who gives a sh.t anyway. Accept it!

  9. This is the points equivalent of revenue management. Since points and dollars are not freely interchangeable, there’s no sense in tying one to the other — each is managed dynamically, and separately. The pricing in points is no less opaque than the pricing in dollars. True, point fares aren’t published while cash fares are technically “published” (in the sense that the airlines file millions of fares several times a day), but this publication is useless to consumers anyway.

    What we need now is an interface (by Southwest or a third party) that will show in real time the dollar and points fares for each flight, and ideally also the individual exchange rate. This will let a customer make an informed decision on whether to use points or cash for a particular flight.

  10. ED,

    Love ya man! I just hate how Obama has to stick it to everybody. Thanks for getting the message out.

  11. Mod’s day off apparently…

    News Flash for the conspiracy minded: If Obama’s policies were the cause you claim they are, the businesses would be citing that as a contributing factor because one thing private enterprise tends to do is blame anyone but themselves for the predicament they find themselves in…if they can credibly get away with it. That’s why you see the big 3 making such a stink over the E3. It’s why you have seen parts of the Financial Sector scream bloody murder over Dodd-Frank. They can at least try to make a claim about it. Southwest is keeping quiet and it’s doing so because it doesn’t want to say publicly what it’s saying by action…it thinks we’re over-entitled thanks to the system they put into place so it’s going to give us the big middle finger. Just like Delta. Just like United.

  12. “Business Select” cost 120 points per dollar ($0.0083 cents a point)
    “Anytime” cost 100 points per dollar (1 cent per point)
    “Wanna Get Away” fares were 60 points per dollar ($0.0167 cents a point)

    Why do you have 1st and 3rd lines in dollars, and 2nd line in cents? Couldn’t make up your mind which unit of measure to go with and decided to mix? 😛

  13. Southwest has really hit bottom of the barrel with their points value. I don’t have the Southwest credit card but I do have the Chase Sappire Preferred, and I love that it has a minimum value per point of 1.25 cents. And in addition I would earn points on any (or most) flights I book through the Chase website. Unless you have a companion pass. Southwest points are looking like terribly poor value. They literally cannot devalue any further.

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