Southwest Airlines Adjusts Award Pricing, Will Charge More For Most Awards

Southwest Airlines is an incredibly popular airline.  They have a very loyal following, customers that are truly passionate about the brand.  The excitement around a vague Hawaii announcement helps illustrate that.  Their loyalty program, Rapid Rewards has stayed mostly static over the past 7 years since a reboot in 2011.  Changes announced yesterday are one of the most significant in recent memory.

Here are a look at the changes, as reported by View From The Wing where I saw this yesterday:

• Previously Business Select fares cost ~ 120 points per dollar. That should drop to ~ 78 points per dollar.
• Previously Anytime fares cost ~ 100 points per dollar. That should drop to ~ 78 points per dollar.
• Previously Wanna Get Away fares cost 72 to 74 points dollar. A 6% increase would suggest 76 to 78 points per dollar.

For the uninitiated, Business Select and Anytime fares are generally much more expensive than Wanna Get Away fares.  I find that Business Select and Anytime are usually priced fairly close to each other.

I’m Really Not Sure What I Think

You would expect me to have a strong opinion on this.  I don’t.  I’m curious about it, but I’m not sure if I love it or hate it.  Maybe both?

I never could quite figure out why it should take more points to redeem for Business Select or Anytime fares.  They don’t get appreciably more benefits, and Rapid Rewards is a revenue-based program.  That means a higher fare requires more points already.  So, why tax me further for wanting to buy Business Select?

On the other hand, I have to believe that Wanna Get Away fares represent the lion’s share of point redemptions.  While it requires more points for the two fares, many more folks are redeeming Wanna Get Away.  This increase (in the 6-8% range) on Wanna Get Away fares is as gentle an increase as we normally see.

Easy, right?  Cheap awards getting more expensive is bad.  And, it’s a revenue-based program, so the ratio should never change, right.  The more I think about it, the less I believe that.

Things change.  Business patterns change. Fuel prices change, wages change.  A 6-8% “price increase” seems pretty reasonable to me by normal business standards.

The Final Two Pennies

I finally figured out what’s been bothering me about this.  Sorry it took me a bit there.  I really wish Southwest Airlines gave us enough credit to be more transparent on the changes.  You won’t find this announcement on the front page of their website. I logged in to my Rapid Rewards account and don’t see any announcement there.  I haven’t received an e-mail from Southwest with notification of the changes.

Maybe those things are coming.  I hope so.  Businesses are supposed to be profitable.  We shouldn’t begrudge them making money when we buy an airline ticket from them.  But, we should expect them to tell us about the change.  And, an explanation of why wouldn’t be the worst thing in the world.

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