Southwest has been incredibly popular for domestic miles & points travel due to the fact that you can earn the Companion Pass and fly someone for almost free for close to two years.
I’ve had the Companion Pass before and thought it was a great way to fly a partner or friend around the country on any Southwest trips, and it virtually doubled the value of Southwest miles.
There’s no doubt that Southwest offers a great service for low-cost and simple airfare within the US, but I’d venture to say that they made it way to easy to earn the Companion Pass. One could easily apply for two co-branded Southwest credit cards with a large welcome bonus and be well on their way to earning the Companion Pass.
Southwest Devaluation on Redemptions Coming April 17, 2015?
The bad news: Southwest just announced that some reward flights will now cost more depending on the demand, destination, time, travel dates, etc.
Here are the full detail that they released:
“We created Rapid Rewards® because we think you deserve to actually feel rewarded. And, from time to time we must make some updates to our program. Beginning April 17, 2015, the number of Rapid Rewards Points needed to redeem for certain flights will vary based on destination, time, day of travel, demand, fare class, and other factors. However, there are still many flights which will stay at the current redemption rate. And don’t forget that when fares go on sale, so do the points needed for redeeming for a reward flight on those fares.”
What’s My Take?
The last Southwest devaluation that occurred close to a year ago and was an across the board devaluation of their Rapid Rewards points. This time around it appears to be much less straightforward and in reality there are few details being released.
In all likelihood I doubt we see a dramatic change on most Southwest award flight redemptions, but for specific flights that are heavily in demand the price could be much higher. This is similar to the strategy that Hilton uses for its award night redemptions for hotels where demand is high or for bookings during peak seasons and holidays.
The interesting part is that the points are already based on a set value—if the price of a flight you can purchase is higher, the price in points needed to book that flight is also be higher. Since the details are not released it is unsure how Southwest will impose a type of ‘surge pricing’ strategy on these more in-demand or higher priced flights.
What it sounds like is that they actually want to devalue Rapid Rewards points more on really popular and in-demand flights. Or simply put, it was just too easy to earn Rapid Rewards points and the Companion Pass and now they want some of those back.