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The not so bad and bad news about Southwest’s more expensive awards

by on Fri April 17, 2015 • 1 Comment


Today, Southwest Rapid Rewards rolled out its new pricing scheme for flights booked with Rapid Rewards points.

Rapid Rewards decides the number of points you need for an award flight based on two things:

  1. The cash price of the airfare
  2. The number of points it decides to charge you to cover each dollar of airfare

Before the change, any Wanna Get Away fare could be booked with points at a rate of 70 points per dollar of airfare.

So if the cash price was $300 you could book it for 21,000 points ($300 X 70).

But with today’s new scheme, Southwest won’t guarantee that any Wanna Get Away fare can be purchased for 70 points per dollar.

Instead, the flight you want could cost you 74 points per dollar, 78 points per dollar, or even more.

Which basically means your points could be worth 1.25 cents each or less, instead of always being worth about 1.4 cents each.

How is it in practice?

We checked Friday weekend getaway flights both during a non-holiday weekend and leading into the hot Memorial Day weekend to see how things are shaking out.

The good news: You’ll still pay 70 points per dollar on many flights, including non-stops to the Caribbean. Cheaper flights still get the traditional 70 point per dollar conversion rate.

The bad news: The more expensive the flight in cash, the more likely it will have a bad conversion rate of 78 or 80 points per dollar. That tends to be leading into big holiday weekends. And Southwest can increase any of the values at any time with no notice, as it no longer has a published benchmark.

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Save your points for times when cash flights are cheaper.

With most miles your best use is to save them for times when cash flights are really expensive, as they will get you more bang for your miles.

For example spending 25,000 regular airline miles on a $400 ticket is better than doing it with a $300 one.

But with Southwest you’re often being penalized for flying flights that are already expensive in cash. That’s because it’s jacking up the premium in points you have to pay on flights that are more expensive in cash.

So if you save them for times when cash flights are cheaper, your points will get you more trips.

Use them to the Caribbean or Central America.

Unlike other airline miles, Southwest doesn’t charge a higher price for every flight down to the Caribbean and Mexico.

Most airline miles will charge you 35,000 miles or more, and that’s if you’re lucky. Most of the time you can expect closer to 40,000 or 60,000 miles to get a ticket to the Caribbean with American, Delta, or United.

Southwest still has many flights available at the generous 70 points per dollar rate, though if you’re trying to fly during a peak time you may be hit with a higher rate closer to 80 points per dollar. But that’s still a much better deal than using most traditional airline miles to the Caribbean.

At 80 points per dollar the airfare would have to be more than $440 to cost more than 35,000 points.

And it would have to be more than $800 to cost more than 60,000 points.

Keep earning Companion Pass.

Earning the Companion Pass, which lets you bring a designated companion along on every Southwest flight you take for each year you earn 110,000 qualifying points, is still a great deal.

The 110,000 points are still worth well over $1,000, and if you’re flexible with days you can still get closer to $1,500 in value. And since your companion travels free your points are worth $2,000 – $3,000.

Make no mistake, what Southwest did was to lower the value of its points.

And it can change that value at any time with no notice now that it isn’t officially benchmarking to the 70 point per dollar level.


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One thought on “The not so bad and bad news about Southwest’s more expensive awards

  1. wherestheluv

    Good stuff, thanks for shedding more light on this. I do however think consumers should be protesting this change. If SW wants to change the value of their points, that’s one thing. But this fly by the seat of your pants point valuation they now have, where they can change the value to whatever they want on a whim is garbage.

    Join others who won’t stand for it. To be silent is to be complicit.


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