They last devalued their points two years ago, during the pandemic right after letting people convert their travel credits to points. Oops. After its historic operational meltdown a year ago the airline gave points to passengers. Their apology for last Christmas will be worth 4% less for anyone saving their points.
With this change Southwest will have devalued about 43% in 12 years since launching ‘Rapid Rewards 2.0’. And there’s really no good reason to devalue their points other than greed. Currently each point is worth around 1.2 cents apiece towards base airfare, or closer to 1.4 cents when factoring taxes saved.
- Southwest’s program is revenue-based. You earn a rebate on your ticket purchases and credit card spend.
- When the price of a ticket goes up, Southwest automatically requires more points. They do not need to adjust the program or your points value to account for this. Broader inflation doesn’t affect the Southwest program.
If you have any potential award travel to book on Southwest Airlines, you’ll want to do it before the end of the year.
- Your points will be worth more if you book future travel by December 31.
- It’s fine to book speculative travel, there’s no fee to cancel bookings and redeposit points.
- And if fares drop enough to offset the devaluation after you’ve booked, you can always cancel your award ticket and rebook for savings.
There’s little downside to redeeming your Southwest points now, before the January 1 4% devaluation, and you may come out ahead. At least they’ve given some advance notice.