In the first part of this two-part series, I wrote about the US low-cost carrier Southwest Airlines. There are considerable differences in how they operate versus other carriers, from their focus on smaller airports to their surprisingly flexible change policies. In this part of the series, we’ll take a look at the Rapid Rewards program.
A few months ago, Southwest and Chase ran a credit card promotion that offered 50,000 points and waived the annual fee for the first year. This was a very good promotion so I jumped on the deal. However, I then needed to learn the ins and outs of the Rapid Rewards program. It’s quite a bit different than most frequent flier programs and I’m excited to share what I’ve learned.
Southwest actually operates three frequent flier programs, but two of them are old legacy programs bound for retirement. I think it’s important to cover the old programs because so much is still being written about them. This is because you can sometimes gain a slight advantage playing games with transferring points back and forth between the Southwest and airTran programs in an elaborate series of steps. However, these opportunities aren’t all that good in the first place and they evaporate in a month anyway. Unfortunately, blog articles about this will likely live on forever. So, this is mostly just to give you a historical picture of the Rapid Rewards program’s evolution, and bring you up to speed on the current program if you’ve been reading about Rapid Rewards on other blogs.
Under the legacy Rapid Rewards program (no longer active), you would earn one Rapid Rewards credit for each flight. After earning 8 credits, you could redeem them for an award flight voucher. This was a pretty sweet deal because you could earn your credits taking cheap short-haul flights, and then cash in your award flight for an expensive long-haul flight. However, Southwest eventually started to play games with capacity controls. It became as difficult to redeem awards with Southwest as it was to redeem frequent flier seats on other airlines. And let’s face it, Southwest was giving away the store. If you have existing flight credits under the old program, they can be converted to the new program at a rate of 1,200 points per credit (which is a better deal if you plan to redeem your points for short-haul flights planned in advance, and a worse deal if you can live with capacity controls and plan to redeem them for long-haul flights or flights not planned in advance).
Southwest Airlines also owns airTran Airlines. The airTran A+ Rewards program will be discontinued on November 1, 2014, along with the airTran brand name. It is more or less identical to the legacy Southwest Rapid Rewards program and points are actually transferable between programs. Existing A+ Rewards accounts will be converted to the (current, not legacy) Southwest Rapid Rewards program when the A+ Rewards program is discontinued, and legacy credits will be converted to points at the same rate of 1,200 points per credit.
The current (as of 2011) Rapid Rewards program is the one that you’ll be signing up for if you’re new to Southwest Airlines. This program (at least until the beginning of 2015) is different from most other US airlines because rather than earning points based on the distance you travel, you earn points based on the fare you pay. There are different earning rates depending on the type of fare, but most readers of Seat 31B will be buying the lowest-priced “Wanna Get Away” fares. These earn 6 points per dollar spent (note that you earn points on the fare you pay, but not on the taxes).
Points can be redeemed for any seat that Southwest is selling, with no capacity controls and no blackout dates. Want to fly during the busiest peak periods around the Christmas holiday? No problem. Want to fly to sunny California in the winter? Sure. Obviously, it will cost you more points than an off-peak flight to an unpopular destination would, but it won’t cost you silly prices like you would have to pay with other North American airlines, presuming that they even offer any award inventory at all. Keep in mind that many airlines black out awards during peak seasons and/or to peak destinations, even at the highest redemption rates. Southwest doesn’t.
How much do awards cost? Contrary to many articles you’ll read online, it’s actually variable (Southwest doesn’t disclose the factors that influence this variability). In general, the cost in points will not be less than 50 points or more than 60 points per equivalent fare dollar redeemed. Note that points can be redeemed for the base fare only. You will still have to pay the tax on your ticket in cash. You can expect that Southwest may conduct stealth devaluations in the future, because there isn’t a fixed formula for how fares are converted to points. Additionally, you can currently redeem points for any fare type (including the deeply discounted “Wanna Get Away” fares Southwest offers), and this could change in the future, along with adding a whole host of ancillary fees that Southwest currently does not charge.
At the end of the day, Southwest Rapid Rewards can provide startlingly lower redemption rates than even British Airways Avios points (usually one of the best options for short-haul flights), depending upon where you are flying and what the fares are. For example, I am traveling roundtrip from Los Angeles to Seattle in late October for just 9,638 points. This would require 15,000 Avios points or 25,000 miles in almost every other US airline’s frequent flier program. Granted, this is a fare that would have cost me a little under $200 if I had paid cash, and it would have earned triple points under the current Southwest targeted promotion I’m enrolled for, but it’s still a great value. Keep in mind, there is always a justification to pay cash for a fare and earn more points. However, if you don’t spend your points, they’re going to eventually be devalued–you can bank on it! Southwest has even built in a “stealth” way to easily do this, given the variability in redemption rates. So, if you find a redemption that is good value (under 60 points per $1), I think it’s worth paying with points instead of cash.
There is another huge advantage to Rapid Rewards points: there are no fees whatsoever and surprisingly few “gotcha” clauses. Redemption fees? None. Even for seats booked at the last minute. Cancellation fees? Zero, as long as you cancel your ticket at least 10 minutes before the flight leaves (you’ll get your points and your money back). Change fees? None, and actually, you can even come out ahead on changes! If a fare goes down and requires fewer points, you can ask Southwest to reissue the ticket at the lower fare. They will do so and deposit the balance back to your Rapid Rewards account (and yes, this can easily be done online). Close-in booking fees? None of those either. Bag fees? Southwest doesn’t have them for up to two checked bags. The only “gotcha” that I can find so far is that your points will expire if you don’t have activity in your account at least once every 18 months.
Should you switch to Southwest for the Rapid Rewards program? It’s definitely not for everyone. Southwest doesn’t have a first class section. Many travel bloggers wouldn’t even think of going near an airline that doesn’t serve caviar on fine china, and would never sit in economy class. There is barely any semblance of elite status with Southwest, and it doesn’t get you much anyway. After all, with no first class and no airport lounges, the only thing they’d really have left to give away is free bags, except they give those free to everyone. If you’re primarily an international traveler, Southwest has very limited utility. I think, however, that Rapid Rewards will be a lot more attractive than the legacy airline frequent flier programs in 2015. Although they play the same games with mileage earning as other airlines will, they’re a lot better when it comes to redemption. And if, like the vast majority of Americans, you redeem your points for economy class domestic travel, it’s hard to ignore that it takes fewer Rapid Rewards points and a lot less hassle to get somewhere versus points travel on most other airlines.