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!