Southwest Airlines has reduced points-earning on most tickets, effective immediately and with no notice whatsoever. This applies to all tickets purchased today and forward.
All non-refundable tickets will earn fewer points going forward. And elite bonuses of 25% for A-List members and 100% for A-List Preferred become less valuable too since those bonuses will be off of a smaller base:
| Was | Now | |||
| Wanna Get Away | 6 | 2 | ||
| Wanna Get Away Plus | 8 | 6 | ||
| Anytime | 10 | 10 | ||
| Business Select | 12 | 14 |
What’s even the point of a roughly 2.5% rebate for most customers on the least expensive fares, that are sold most often? Especially considering that it’s perhaps 1/3rd the rebate being offered by competitors. Southwest’s rewards for flying were comparable to other airlines before this change but for most are being chopped by two-thirds, with the ‘upsell’ Wanna Get Away Plus product being chopped by 25%.
- Selling a customer a buy up from Wanna Get Away to Wanna Get Away Plus is incredibly high margin, it seems pointless and counterproductive to reward customers less for making that move!
- But now they can say that when you buy up you’ll earn 3x the points, rather than merely 1/3rds more.
- In reality, you’ll have to spend more just to receive a comparable rebate compared to what other carriers offer on non-basic economy fares.
Note that cross-town Dallas-based rival American Airlines also awards 2 points per dollar spent on their lowest-cost coach fares, which they label as Basic Economy. Southwest says they don’t have basic economy, but maybe they do now?
Or, at least, maybe this is a precursor since free bags on the cheapest fares seem likely to be on the chopping block and they’re making unprecedented cuts to their own staff from layoffs, to closing crew bases, to dropping employee morale-building events.
Not only will non-refundable tickets on Southwest Airlines earn fewer points going forward, those points are worth less, too – devalued about 43% over the past 12 years.
Making the Rapid Rewards program less rewarding and less compelling for customers may reflect well on their P&L in the short-term but seems likely to reduce customer loyalty which is dangerous for profitability – both as a marketing engine for the airline, and because the frequent flyer program itself is highly profitable today. That’s just more short-term capitulation to Elliott Management.
(HT: Danny Deal Guru)
Awful. Where are those ‘let the free market decide’ folks, now? Because, the devaluations on these programs are getting outrageous. Did the billionaires dismantle the Federal Trade Commission yet? Who’s left? State attorneys general? This is getting ridiculous. Better Business Bureau? Bah!
I remember when I used to like flying Southwest…but I haven’t in years.
The Elliott effect just keeps making Southwest less desirable to fly than they used to be. Bag fees are coming for sure, its just a matter of when they want to make that move.
They are jealous of how American has destroyed brand value and they are trying to catch up.
Wanna bet that the Wanna Get Away will soon mean Basic Economy.
Dear Southwest: Devalue the points, whatever. But if you’re going to follow a legacy model would you PLEASE at least put in a bona fide domestic F product to make your airline actually appealing to business travelers and leisure travelers with disposable incomes?
And so it begins…
Elliott is doing a pretty impressive job of destroying Southwest in a short time. I don’t understand how they got half of the Board seats while owning under 20% of the airline though.
Is this why they emailed me a random drink coupon good for every flight through June? (lol)
Interesting that Bob has already surrendered to Elliott and devalued of what’s left of the SWA brand before even rolling out the “premium'” F or J product to its aging legacy fleet.
Basically, if you want to earn half the miles and perpetually connect in MDW or BWI for the same price (or more) than Delta or AA, please fly Southwest. Load factors will struggle to reach 80%. And yet Elliott will show a short term increase to EV for a quick sale, yet the long term impact to the brand is zero (at best).
@Mike Hunt — We don’t always agree, but I am with you on this. Since SWA is going that direction (attempting the legacy carrier model), the least they could do is an equivalent of Spirit’s Big Front Seats, maybe 2-4 rows of those, 2-2, recliners, maybe early boarding, don’t even need a meal. Then again, Elliott is trying to milk it before they kill it, so probably not going to happen.
@ Gary — God Bless The USA!
Just cancelled my SW card, others will probably follow, so much for Chase money
It’s just a matter of time until I’m flying whoever is cheapest between United, American, Delta and Southwest. I only fly for work so the cost isn’t directly impacting me but I don’t go crazy either.
I’ve been loyal to Southwest for a long time but Elliott is like every other hedge fund/money manager/investment group. Short term gains/profits, run the company into the ground, grab their money and then bail. Once Southwest changes to the same model as the others, there’s NOTHING to differentiate them from the others. Pay for checked bags, assigned seating……they’re all parity products at that stage of the game.
EVERY time a hedge fund or similar gets involved in ANY business that’s not financially-oriented, e.g. airlines, rail, light bulbs, it’s the same outcome. The product degrades, prices go up and employee morale drops into the crapper.
If someone…..anyone….can provide an example of an investment firm’s involvement in a company that resulted in IMPROVED service and cost, I’m all ears.
Fools. Now, all my cheap seats will all be on points, not money. It is only when my business is paying that I’ll buy their absurdly expensive and points-earning fares. And in fact, this is yet another good excuse to fly airlines other than SouthwessssssT, which is slowly letting the air go out of their model.
Sigh….
@SST Ha, clever!
Given the choice of earning few points for the same priced tickets or having outrageous award levels, like Delta SkyPesos, Southwest’s move is more honest. What you saved already is worth the same, just future earnings are tougher instead of what you saved is erroded.
Not right
@1990 – No half measures. If they’re going to do it, go all the way so they can go toe-to-toe for premium F revenue against AA/DL/UA. It would be amazing for consumers in so many major markets that WN already serves where there’s no really meaningful F competition (look at DAL alone!! DCA, LAX, LGA, BOS, PSP, ORD, MIA, FLL, on and on…)
The comments are over the top. Southwest has the right to set the redemption level where it wants and customers can decide if they wish to purchase or keep flying the carrier. It gets old reading comments such as ‘I am never going to fly Southwest again’. I saw this after the Southwest Christmas meltdown a few years ago and people keep flying them.
The airline gets me where I want to go non-stop with a schedule that fits my needs. Their unexpiring travel credits and allowing a change in travel based on the slightest schedule change is a big perk. I am not buying a ticket based on the FF miles I earn.
Once you ;learn the work around to get free bags on AA there is no reason to fly SWA. They haven’t been the cheapest airline for years.
SWA may be losing a customer that has earned a companion pass for 10 years straight. It is sad no one told us about this so we could give feedback. 🙁 not feeling loved. I always flew SWA. Even when I had to fly overseas. I would fly SWA near to whatever airport I needed and the continued on overseas on another airline. But now with the cut in points it may not be the right idea any longer. And so you have context. I am a million+ miler with AA and avoid them to fly SWA. well. maybe not any more…
Fortunately my only currently booked SW flight is on points. But uhm wow! Seems like self immolation by SW.
@mauiguy what’s the workaround for free bags on AA, other than credit card?
SWA is great for flights <1hr. Otherwise no thanks.
Just another reason to end my loyalty to this company. Executives are showing their greed. There becoming just another airline vs the number#1 airline to its customers. It’s sad to watch
@Mike Hunt — Alright. I’m with you. Be bold! SWA should do lie-flat. Like, make their own Mint equivalent. Call it Heart. Serve meals, champagne. Have IFE. And bring back the honey roasted peanuts. I’m sold!
@Brian W — WHAT?! The comments are over the top, you say? No. Never…
How does this effect the value of Chase Ultimate Rewards (given Southwest is a transfer partner)?
I stopped flying SW a few years ago. Their ticket prices are often the same as legacy carriers. Just can’t deal with the mad scramble to check in at T-24. That and the cramped airport (MDW), FAs who do a 15 min stand up comedy at 6am, and delayed evening flights just became exhausting.
Elliot will scorch the SWA DNA, take their money and leave the airline sold as scraps.
I would bet even money that the change in earnings level was not intended to be released today and will not take effect today.
My biggest problem is SW usually isn’t cheaper anymore – and when you add early bird it is often significantly more expensive. Now you pile on almost no earning value and more expensive just became – even more expensive. And this from a Denver local which is SW’s largest footprint. I already only fly SW about 4 times a year, and that is only due to the credit card. Not sure SW is even worth that now.
@nsx at Flyertalk….
Yeah, yeah, yeah. You’ve typed the same redundant meaningless message on flyertalk three times already, and now you’re pushing it here. Please just stop.
I just got a new cc with a 50,k bonus. The points don’t look to earn many flights.
Speaking of SouthWest…. you ought to find someone who can go on record with first hand knowledge about the mass firings. For example someone who could tell you that the public news was the first to break the information to the impacted employees. Also someone with the Automated mass voicemail Southwest sent out, then how they immediately removed the effected employees from having access to the office building, and how they paid a 3rd party to empty the desks of faithful employees rather than even allowing them the decency of a goodbye to their colleagues. The employees never got a face to face, or even human phone call to break the news.
Southwest pumps you full of the “we are a family” line but firing people in corporate as well as airport supervisors with out any dignity is a true reflection of the new influences plaguing the Southwest table.
@Miguel95: I would have lost my bet. Southwest’s management is more desperate or incompetent than I would have believed. Zero notice unannounced (stealth) devaluations are anathema to customers.
The only consolation is that devaluing earnings reduces the pressure to devalue redemption rates. People who earn mostly via credit cards, which even includes me, won’t lose much.
Now watch Southwest make me look stupid by devaluing redemption rates too. This is the time of year for that.
@1990 – Please stop, you are making me sexually excited! How about “Southwest Royale: The Texas Ranch Sky Suite.” Think of it… mesquite smoked peanuts and Frito pies served on silver platters. And your FA is a personal butler dressed in tight Wranglers named Wyatt. Cowhide blankets… Oh! and Blue Bell Dr. Pepper ice cream floats. Fletchers corn dogs with inflight sopapillas on alternating flights of course. Why do WE have to come up with all the great ideas? These guys get paid a lot.
Is there anything that Southwest can legally do to kick Elliott out? If Southwest starts charging for checked bags there will be no more airlines in the USA and perhaps North America that have two free checked bags for all economy class passengers.
Open seating and free checked bags are two distinctives that make Southwest Southwest and set it apart from other airlines. I am disappointed that open seating is going away but free checked bags is the real line in the sand.
The points aren’t devalued but the paid fares that earn points are.
Ergo, the best way to earn points is through credit card SUBs and promo spend offers. And maximize by using CPs. Only suckers will buy cash fares.
@Mike Hunt — No notes, sir! It’s a creative solution—why not at this point. Southwest…the new ‘premium’ airline. Whether it’s a segment of the aviation market or a relationship, when things get stale, it’s healthy to shake it up! (And down. And up again. Repeatedly.)
@Mike Hunt — Fine. They can call it a ‘Love’ seat. Much better. Lie-flat. Recliner ain’t good enough.
Loyalty isn’t profitability and the airlines are tying rewards to profitability. Flying around on BE like fares or even Main Cabin like fares will never earn an airline a plug nickel.
They didn’t cut them. They just cut EARNING them. A big difference.
@Lane. +1000 for your comment. What made Southwest more than competitive is DONE, stick a fork in it, as they say. Flying just became a little less enjoyable (if that were even possible).
@1990 – The LOVE SEAT… soon will be making another run… the LOVE SEAT… promises something for everyone… set a course for adventure, your mind on a new romance… and LOVE… love won’t hurt anymore… it’s an open smile… on a friendly shore…
Thank goodness that the new administration is taking the side of voters and holding companies accountable: Those who got the credit card on the basis of being able to get free travel they’re going to be able to redeem for free travel.
Oh, never mind.
Herb has got to be rolling in his grave. Not the airline it used to be when you could grab a “FunFare”
and actually sit up front. 8 free drink coupons with four round trips. Now it is actually more beneficial to fly AA or Alaska for me.
@Dale they talked about buying shares back from employees to try to keep some control but in all honesty Southwest has cancer by the name of Elliot. The employees, management, and board members of Southwest do not stand with Elliot and have dragged our feet as long as we could. Imagine how the 30+ year employees found out that working for the company that long didn’t even get a human voice telling them they were being let go immediately. Elliot wants us to charge for bags, among other things, Southwest can’t say no if they say yes.
Did anyone watch Yellowstone, Beth Dutton is essentially destroying Southwest Airlines.
The only thing that will help is flooding Southwest customer service emails saying customers don’t want the changes. Elliot believes you all want us to make these changes.
I have flown SWA for 25+ years. I have earned Companion Pass for at least 5 years and have been A list Preferred since it started. I have had the Southwest Credit card for many, many years. And Southwest has just lost my business. Reducing Wanna Get Away to 2 points/$ virtually guarantees I cannot achieve Companion Pass in future years no matter how much I fly or spend. My company requires I buying the lowest cost ticket and even though I fly 50+ times per year I still won’t get to Companion Pass since Wanna Get Away points are virtually worthless. So, so long SWA. After this year I’ll be flying your competitors. That really saddens me to say but you no longer care about loyal customers like me so I no longer care about you. Cya!
Carl Icahn did the same to TWA. It will not surprise me if SWA goes bankrupt within the next five years.