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Southwest Airlines filed its 2017 SEC 10-K and shared some details of its frequent flyer program that may not already be common knowledge.
For instance whereas in 2016 American Airlines filled 6.3% of its seats on awards, Southwest fills twice as many of its seats with customers redeeming their points — and that’s increasing, too.
|Rewards Claimed||% of Miles Flown|
Southwest is going to be significantly affected by FASB ASC 606 Revenue Recognition Standards. They’re only showing liability for future travel on their books at $76 million at the end of 2017. They’re required to recognize the actual market value of the transportation to the provided as of January 1, 2018. Their 10-K doesn’t provide guidance on how much to expect it to go up but American took a $3.5 billion hit to their retained earnings from the change.
Their co-brand credit card agreement with Chase, re-upped in the back half of 2015, boosted the airline’s bottom line (compared to the old agreement) by
- 2015: $255 million
- 2016: $544 million
- 2017: $544 million
Finally I was surprised to see the details of the Companion Pass spelled out in the 10-K,
Members who fly 100 qualifying one-way flights or earn 110,000 qualifying points in a calendar year automatically receive a Companion Pass, which provides for unlimited travel free of airline charges (does not include taxes and fees from $5.60 one-way). The Companion Pass is valid for the remainder of the calendar year in which status was earned and for the following full calendar year to any destination available on Southwest for a designated companion of the qualifying Member. The Member and designated companion must travel together on the same flight.
Notably points earned using the Southwest credit cards — both signup bonus points and points from spend — count towards earning the companion pass, which is one of the best deals in travel.