Not-So-Rapid Rewards

Southwest Airlines announced wholesale changes to their Rapid Rewards frequent flier program today. According to the email received by members:

In the All-New Rapid Rewards, you will earn and use points instead of credits. That means beginning March 1, 2011, you will no longer earn “credits” on qualifying flights, Partner transactions, and the Rapid Rewards Credit Card. But don’t worry—your existing credits are safe and secure. And after the new program launches, you can still use them toward a free** flight. If you already have a Standard Award or Freedom Award, hold on to it. You can still redeem it for your free flight. Standard Award and Freedom Award rules, regulations, and expiration dates remain unchanged. The program will transition automatically on March 1, 2011. You don’t have to re-enroll—and you’ll keep your current Rapid Rewards number.

Sounds great, right?  Except here’s the rub – points are based on base fare of the purchased flight.  No more buying cheap flights on fare sales and having them count toward a free round-trip flight after eight round trips.  Since I am only one flight away from earning my free round-trip flight (and that flight comes before March 1, so it’s still under the old system), I decided to look back and see how I would have fared under the new program.

Flight 1: Kansas City to Dallas (roundtrip) – ~$250

Flight 2: Kansas City to Denver (roundtrip) – $71

Flight 3: Kansas City to Baltimore, DC to Kansas City – $192

Flight 4: Kansas City to Dallas (roundtrip) – $287

Flight 5: Kansas City to Chicago (roundtrip) – $81

Flight 6: Kansas City to Orlando (roundtrip) – $241

Flight 7: Kansas City to Austin (one leg required for reward) – $163/2 = $82

Total spent: $1204 (note: 3 credits were earned for opening the account online)

All tickets were purchased under the “Wanna Get Away” fares, which earn the least number of points under the new system (6 points per dollar).  As the SWA website so clearly points out, “Now you have another reason to go for that Business Select Fare.”  No kidding – 12 points for every dollar that way.  The point threshold for a free one-way flight is 6,000 for “Wanna Get Away” fare, but jumps considerably for “Anytime” (20,000 points) and “Business Select” (26,400 points).

Unfortunately, this new program means it would have taken me nearly twice as long to earn a free round-trip flight.  Points are now used for single legs instead of the previous “8 round trips, 1 round trip free” methodology. Using the math above, by the time I fly to Austin I’ll have earned 7,224 points, or only 60% of the minimum number of points necessary for a free round-trip flight.  Even by Southwest’s own Point Simulator on the site explaining the new program, it takes 10,500 points to get to the east coast and 15,000 points before the first west coast city pops up from Kansas City.  Since points are now being equated to dollar amounts, this program is much closer to competitors’ mileage-based frequent flier programs.  Longer flights cost more points when redeeming, and with the points I have now, I’d be lucky to make it to Denver one way, let alone having a free round-trip flight as I did under the previous program.  I should also mention that my estimated point total is slightly inflated as I used my total cost for the flight including taxes and fees, while Southwest will be using the base fare to calculate point totals – which only bolsters the case that it is now going to take longer to earn free flights.  Despite claiming people will be earning free flights “faster than ever”, it now requires each leg of a flight to cost $200 ($400 round trip base fare before taxes and fees) to earn at the same rate as before the way they have valued existing customers’ previously-earned credits (1,200 points per credit).  With all of the fare sales and cheaper fares Southwest offers, this new program is not nearly as compelling.

I’m sure the argument can be made that since the new program doesn’t have blackout dates the way the old one did, points don’t expire as long as you earn them once a year and there aren’t limited numbers of reward seats as in the past that the new program has perks the old one didn’t.  However, if it’s taking me twice as much money to earn a free flight, I’m not convinced this is the better deal.  It was nice while it lasted – and at least bags are still free.

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