Southwest Airlines will be devaluing its points in 2024. If it’s any consolation, at least the program is providing some advance notice?
In this post:
Southwest devaluing points in January 2024
As flagged by Danny the Deal Guru, as of January 1, 2024, Southwest Rapid Rewards points will be worth a bit less. Rapid Rewards is a revenue based frequent flyer program, and with this change, the number of Rapid Rewards points required per dollar of base fare will be increased by approximately 4%.
This will only apply to new bookings as of 2024, so any reservations ticketed before then will (of course) be honored.
Southwest last devalued Rapid Rewards points in 2021. Currently you need roughly 83 Rapid Rewards points per dollar of airfare, meaning that each point gets you 1.2 cents toward the cost of a ticket. Meanwhile prior to the previous devaluation, you needed roughly 78 Rapid Rewards points per dollar of airfare, meaning that each point got you nearly 1.3 cents toward the cost of a ticket.
After this change, it sounds to me like you’ll need 86-87 Rapid Rewards points per dollar of airfare, meaning each point will be worth somewhere around 1.15 cents toward the cost of a ticket.
My take on Southwest’s upcoming Rapid Rewards devaluation
To Southwest’s credit, at least the program is providing some advance notice of these changes, and the devaluation isn’t quite as bad as last time. That being said, I still find it kind of ridiculous when a revenue based frequent flyer program devalues.
When you have a frequent flyer program with an award chart, I can kind of understand how there needs to be a devaluation every so often. After all, the cost of travel increases over time, so in order to match up with paid fares increasing, you also need to increase the number of points required for an award.
That same principle doesn’t apply with revenue based frequent flyer programs, as the cost of award tickets will naturally increase over time as the cost of paid tickets does as well.
Frequent flyer programs are about building relationships with your customers, and that has to be done in good faith. It’s bad enough that people aren’t earning any “interest” on points that they hold onto, but it’s even worse when you consider people are getting double penalized — they’ll pay more points not just because the cost of airfare goes up over time (which is fair enough), but also because each point is worth a lesser dollar amount.
Am I surprised to see Southwest devalue points? No. Is it disappointing, and does it seem kind of short-sighted? Yes.
Bottom line
As of 2024, Southwest will require roughly 4% more Rapid Rewards points for awards, meaning that the value of each point will decrease from around 1.2 cents to 1.15 cents. This is Southwest’s second devaluation since the start of the pandemic.
It’s quite disappointing to see a revenue based program devalue, since higher revenue costs will automatically lead to higher points costs. But I’m also not surprised, since programs tend to do what they can get away with.
What do you make of this Southwest Rapid Rewards devaluation?
I just opened a southwest credit card account. This information should have been added in the application but it wasn’t. So I guess I been got
It is not a surprise that WN is devaluing its mileage program. As I have repeatedly said, that is the trend the industry is moving towards and, as heat as Delta takes, it is going where other carriers will follow.
The bigger takeaway w/ respect to WN's decision is that Boeing has informed WN that they will get the 737-MAX 7 certified in the spring of 2024, another 6 months after the latest revision which...
It is not a surprise that WN is devaluing its mileage program. As I have repeatedly said, that is the trend the industry is moving towards and, as heat as Delta takes, it is going where other carriers will follow.
The bigger takeaway w/ respect to WN's decision is that Boeing has informed WN that they will get the 737-MAX 7 certified in the spring of 2024, another 6 months after the latest revision which means the MAX 7 will enter service for WN in late 2024.
WN has some old, tired 737-700s that they are trying to keep in service and it is getting harder and harder to keep them reliably flying.
Southwest's loyalty to Boeing is being sorely tested.
And United's commitment to the MAX 10 will be tested equally as severely as the MAX 10 will not enter service until 2025 at the earliest. While WN and UA can switch to the MAX 9 or 8, there is a lag in the time to convert models and there is a buildup of MAX 7s and MAX 10s that are waiting to be delivered. Both WN and UA's strategies are being continually hit by Boeing's delays.
You and Leff just posting the same stuff now. Come on - you've got the same exact headline.
Even less reason to engage with Rapid Rewards. Glad I didn't burn a 5/24 slot on any of the Southwest cards. Scummy bad faith tactic.
hate their boarding process so another good reason to avoid the king of cattle class with their poor point value.I can do delta or United if they are going to be that stingy
I think you included an extra space in this post's title!
Nice!
One thing about Southwest is: when they have a sale, it is easy to rebook at the lower fare. And cancellations are easy. (Just don't fly any single-aisle to Hawaii if you can help it. :-0 )
I don’t like devaluations either, but it makes just as much sense for a revenue-based program to do so. It’s the same basic supply and demand issues.
WN issues points to consumers who want to redeem them. And the more credit card signups, the more points there are being redeemed. Southwest gets no direct revenue when I redeem my points, since I’m redeeming my scrip at the company store. They want, therefore, the points...
I don’t like devaluations either, but it makes just as much sense for a revenue-based program to do so. It’s the same basic supply and demand issues.
WN issues points to consumers who want to redeem them. And the more credit card signups, the more points there are being redeemed. Southwest gets no direct revenue when I redeem my points, since I’m redeeming my scrip at the company store. They want, therefore, the points to be worth less. So they give up less of their product for free.
You are missing that WN books the revenue when they sell the points to Chase, not when the flight is taken. Southwest gets the money upfront which helps with cash flows.
Of course. But the less those points are worth, the more of their product they give away for free. If I can currently get $800 of travel for my Chase signup, but if they devalue I get $700, they obviously benefit from the latter