Southwest Airlines is celebrating a major milestone today, and employees are the big winners.
In this post:
Southwest Airlines’ anniversary gift to employees
Southwest Airlines is today celebrating its 50th anniversary, as the beloved airline operated its first flight on June 18, 1971. The airline celebrated this special occasion with an event for employees.
During this event, Southwest unveiled a Boeing 737-800 in a special new “Freedom One” livery, with a stylized flag of the United States of America, intended to honor veterans and those currently serving.
On top of that, Southwest offered a gift of 50,000 Rapid Rewards bonus points to all 56,000+ employees. Employees who choose to accept this gift will have them deposited in their accounts later this year. If every employee were to accept this gift, we’d be talking about 2.8 billion additional Rapid Rewards points in circulation.
How much are Rapid Rewards points worth?
How much is this gift of Rapid Rewards points worth? Rapid Rewards is a revenue based frequent flyer program, and it takes about 83 points to redeem for one dollar of airfare. In other words, 50,000 Rapid Rewards points could get you roughly $600 worth of airfare on Southwest. If all employees were to accept the gift, that would be about $34 million worth of airfare.
While Southwest Airlines employees get a big gift of points, customers were meanwhile hit with a devaluation to Rapid Rewards points a couple of months ago, meaning that points are worth less than they used to be. Perhaps that’s how this gift is being funded? 😉
Why some employees may not accept this gift
This gift won’t automatically be given to employees, but rather employees will have to opt in to receiving this. Presumably that’s because of the tax implications of this reward. I would imagine that this gift is valued at somewhere around $600, so it will be taxed equivalent to that amount of income.
If you’re in a low tax bracket then you probably won’t be on the hook for much, while if you’re in a higher tax bracket that “gift” could cost you $200+.
The catch is that Southwest employees and some family members already get space available (nearly free) travel on Southwest, so the points aren’t as valuable as they’d be to someone who doesn’t work for the airline. That being said, I know a lot of airline employees understandably value positive space, guaranteed travel, since playing standby roulette can be frustrating and unreliable.
Furthermore, presumably Southwest employees could redeem their points for friends and family, including those who may not otherwise be eligible for travel benefits on Southwest. Even with tax implications, I’m sure this would prove worthwhile to a vast majority of employees.
Bottom line
Southwest Airlines is celebrating its 50th anniversary by giving all employees 50,000 Rapid Rewards points. That’s a huge gift that can get you $600 worth of travel, and we could see up to 2.8 billion new Rapid Rewards points issued, worth around $34 million in airfare.
That’s a very generous gift, and I’d be curious to know how many employees end up choosing not to get those points. Happy anniversary, Southwest, and congrats to all employees!
I won 5000 miles on last day. Also either 50 or 500 earlier.
Not really a gift. Employees have been given an option by email to accept or reject offer since they are payroll taxed based on the 600.00+ value. The average deduction from paycheck will be 150.00 and up if you accept the gift.
Somewhat disappointing to those who have been loyal to Southwest. I am rethinking my longtime claim that Southwest is my airline of choice.
Rapid Rewards are downgraded requiring 1.6 points for redemption.
I likewise have played the anniversary give away promotion with NO win. Even a 50 reward amounting to less than one dollar toward redemption.
I won two prizes playing the Southwest game, 50 points and 500 points.
Southwest employees could already fly free on standby so for many employees, this is not an attractive offer
Smart move. Cheaper - for the company at least - than giving all employees a cash bonus (which I’m sure most would have preferred)
That is why their promo game was stingy this week! /s
Glad for the Southwest employees, but whoever thought of that promo game should be fired. I stopped after the first 5 days and getting nada, not even 50 points. Sad thing was I would load it up, put in all the info, and before the first suitcase even came out get the email saying I wasn't a winner.
At least with AA's promotion I was able to win a decent amount of miles.