Southwest Rapid Rewards - Official Rapid Rewards 2.0 speculation thread

Interviewed by Randy Petersen, Gary Kelly said (http://www.insideflyer.com/articles/article.php?key=4673):

We have very few partners on southwest.com or rapidrewards.com. We've built the airline to serve the business traveler, but historically have approached our services as more of a one size fits all and there are business customers' needs that we could better meet. So we're evolving southwest.com and we're implementing codeshare and international codeshare capability. Coupled with all of that, our entire marketing team has envisioned taking the Southwest Rapid Rewards program up to the next release level.

We have taken some baby steps over the past couple of years to position us, but look forward to Southwest Rapid Rewards 2.0 in 2009.

We do think there are very substantial revenue opportunities related to evolving the frequency program, and not the least of which is simply making an investment in our brand that makes us even more appealing to business customers. We want to make ourselves even more compelling, especially in our newer markets.

It's natural to fear change, and in this case change can only mean bad news for today's hyper-advantaged short-haul discount fare customers.

RR 2.0 will likely be a banked points program, with earning and/or redemption rates tuned to flight miles and/or fare. Long-haul and full fare customers will likely applaud the development, and Gary Kelly obviously wants to win more full fare customers. I want Southwest to win those customers, too, because that's the only way my discount fares can remain low.

Maybe someone can post links to earlier speculation on RR 2.0. Let the fun begin!

...Maybe someone can post links to earlier speculation on RR 2.0. Let the fun begin!

nsx, as I recall, you have been dropping more hints in recent months than anyone, and although I over-inferred that you were involved in a beta, you said no, and I couldn't find the exact place where you said you had some substantial insight. Mod privilege? Or can I say that?

So, in the recent thread about the article (still?) to be written about the current RR, you did say you'd been involved in market research. I don't know how anyone else can/will say more at this point, unless it's one of The Regulars here, and I don't mean the official employees. If you can go further, could you be more specific about what it contained in addition to the things you hint at @1?

Thank you. :)

I would note that the dichotomy you describe is long haul vs. short haul, while the one Mr. Kelly hints at is business vs. leisure. Perhaps it's a "Johari Window"?

When BS was first introduced my single biggest concern was the introduction of the quarter credit ... I still think we're going to see more come of that yet, though I think it will primarilly be related to partner earnings more so than from flying with WN.

The greatest change will come from the introduction of international airline partners. If WN gets a few compelling international airline partners, it will be a huge enhancement to the Rapid Rewards program.

I could see it go the way of Jet Blue where points are given out based on distance. Of course, that isnt always the best as sometimes I pay more for a 2 hour flight then a 7 hour flight.

While I dont like it, it seems the *best* option would be to do it based on both segments and cost.

As for BS fares, I paid it once and thought the extra .25 credits was not worth it. For 1 additoinal credit, yes.

RR 2.0 will likely be a banked points program, with earning and/or redemption rates tuned to flight miles and/or fare. Long-haul and full fare customers will likely applaud the development, and Gary Kelly obviously wants to win more full fare customers. I want Southwest to win those customers, too, because that's the only way my discount fares can remain low.

Maybe someone can post links to earlier speculation on RR 2.0. Let the fun begin!

But it would probably tick off the constant short haul business passengers if based on miles...who can be a significant source of revenue too (intra-Texas/California). And WN has rolled back on the longer stages recently. I guess fare could work too...but right now I like RR the way it is. It's real easy to track, IMO.

As a frequent flier who flies west coast routes I choose WN mainly due to frequency and I actually get something for my flights. If I fly AA or UA it's not even worth it, especially with UA going to the model where they are giving actual miles flown and not the 500 minimum.

A friend sent this to me based off a survey she received. The end is kind of mangled, I couldn't figure out how to paste a chart:


New Rapid Rewards Program Now we would like to get your opinion of potential changes to Southwest Airlines' Rapid Rewards Program. This is only hypothetical. It is not a definite change.

Please read the concept below. The next page will allow you to explore further aspects of the program.


Southwest Airlines Rapid Rewards Program

With this program, you would get reward points based on the dollars you spend for travel on Southwest Airlines and the fare type you purchase. (For example, for a $99 flight you could get between approximately 400 and 600 points.) You would also get points for purchases through Southwest's travel and financial partners. Points would not expire as long as you have any type of account activity in the past 18 months.

To redeem reward travel, you could purchase any available fare on Southwest Airlines using your points. The points required for free travel would be directly related to the fare available for the flight, and seats for reward travel would not be limited like they are on other airlines. If you book further in advance, you would have more fare options that require fewer points, just like booking far in advance might enable you to get a lower fare. (For example, it could cost between approximately 4,000 and 6,000 points to redeem a reward for a flight valued at $99, depending on the fares available at the time you book your flight.)

Also, if you get a minimum of 16,000 points or fly a minimum of 15 roundtrips on Southwest Airlines within a 12-month period, you would reach an Elite Status level and be rewarded with special perks when flying Southwest Airlines. Among other amenities, you would receive reserved boarding privileges and get more points every time you fly. (For example, as an Elite Member, you would most likely receive an A boarding pass and get at least 25% bonus points.)



Requirements & Benefits

Those who fly frequently would get bonus points and other benefits.

Cruisers Club
Requirements:
Get 16,000 qualifying points by flying on Southwest Airlines, or fly 15 roundtrips (30 one-ways) within a 12-month period
Bonus Points:
25% bonus points when flying Southwest
Other Benefits:
Automatic priority check-in before your flight to ensure an early boarding group – most likely an A Priority position on standby list (behind Jet-Setters Club and Ascenders Club Members) Priority or Express security lane in airports, where available Express check-in lane at the ticket counter, where available Exclusive phone line when calling Southwest Reservations or Customer Relations 15% discount on points required to redeem reward travel to international destinations

Jet-Setters Club
Requirements:
Get 32,000 qualifying points by flying on Southwest Airlines, or fly 30 roundtrips (60 one-ways) within a 12-month period
Bonus Points:
50% bonus points when flying Southwest
Other Benefits:
All Cruisers Club benefits plus: Priority position on standby list (behind Ascenders Club Members) Free drinks onboard 50% discount on broadband Internet connectivity in-flight 25% discount on points required to redeem reward travel to international destinations

Ascender's Club
Requirements:
Get 42,000 qualifying points by flying on Southwest Airlines, or fly 40 roundtrips (80 one-ways) within a 12-month period
Bonus Points:
100% bonus points when flying Southwest
Other Benefits:
All Cruisers Club and Jet Setters Club benefits plus: Highest priority position on standby list Free broadband Internet connectivity in-flight No blackout dates when redeeming points on Southwest Airlines 30% discount on points required to redeem reward travel to international destinations


Below is a list of 5 flights that you flew with Southwest Airlines with the fare type you selected.

Please review the flights and then select the fare type on the right that you would have purchased for that flight (one-way) had the new Southwest Airlines frequent flyer program you read about been in place.

An approximate $ fare amount that would have been available for that one way flight is shown along with the number of points you would have received .

Note: If you want to know the descriptions of each fare type, click on the fare type.
i60
5 One Way Flights Reallocate 5 One Way Flights
Fare Type Would Have Purchased
Origin Destination Fare Type Date Refundable Fare
Everyday Fare
Discount Fare

BURBANK NASHVILLE Everyday 28-Sep-07 $291.85
1751 points
$169.7
848 points
N/A

NEW ORLEANS NASHVILLE Discount 17-Sep-07 $96.95
582 points
$60.51
303 points
$55.71
223 points

NASHVILLE NEW ORLEANS Discount 13-Sep-07 $96.59
580 points
$60.34
302 points
$54.96
220 points

LOS ANGELES NASHVILLE Everyday 17-Aug-07 $283.12
1699 points
$169.37
847 points
N/A

NASHVILLE LOS ANGELES Discount 12-Aug-07 $283.67
1702 points
$169.67
848 points
$125.61
502 points

I hope the marketing geniuses doing that research for WN realize that almost no one is going to pay more for a ticket just to get a few extra points.

I hope the marketing geniuses doing that research for WN realize that almost no one is going to pay more for a ticket just to get a few extra points.

Let's see...there's a website called Flyertalk...where people get together and talk about some of the CRAZY things they do for a few more frequent flyer miles. Don't underestimate the psychological power of "points."

I saw a similar survey. Redemption prices would vary by flight, presumably proportionately to the paid fare. There would be blackout dates but not capacity controls. Maximum redemption price example in this survey was nearly 13k points one-way. Minimum redemption price was less than 2k points, presumably corresponding to one of those $39 fares. Today's fuel prices could force significant changes in these hypothetical numbers.

Earning rate (points per dollar spent) would vary slightly by fare class.

My reaction to this particular trial balloon:

1. The Elite level benefits are outstanding (especially the free Internet!) and will do a great job of motivating people to reach these levels. Once they reach the first tier, Southwest will capture these customers for good!

2. The points scale is un-Southwest: confusing at best. If it's going to be money-based, just use the dollar amount of the fare and then apply any fare class percentage bonus and elite level percentage bonus.

3. The reward ratio (value of free trips divided by price of paid trips) for short-haul discount fare customers will apparently drop to 20% or less. That's still reasonably generous. especially relative to legacy carriers who have dropped their 500-mile minimums. But it's a huge step down from the giveaway days of double credit and no capacity controls. I realize that even today's generosity to short-haul flyers is not sustainable, but weren't those days glorious?

4. The idea of tying the redemption point requirements to the dollar cost of the award trip is double-edged. On the plus side, it makes perfect sense that a trip that is more expensive in dollars should be more expensive in points. However, redemption by dollar value puts Southwest's program at a serious disadvantage relative to other airlines' programs, especially for elite members who typically see better capacity-controlled award availability. Redeeming miles for aspirational trips whose cash price is out of reach is one of the major attractions of frequent flier programs. A discrepancy between cash price and miles "price" makes the frequent flier game worth playing, without costing the airline revenue because the member would not have bought that seat at the cash price.

5. Tying the redemption point requirements to the dollar cost of the award trip creates a problem when you want to adjust your travel date at the last minute. This has always been easy to do with Southwest awards. I'd hate to lose this advantage.

6. With banked points closely linked to the dollar price of trips you can redeem for, it becomes harder for Congress and the IRS to ignore the program for tax purposes. The program described looks more similar to a cash rebate than to a traditional frequent flyer program. I hope Southwest has carefully considered this aspect!

7. I hope that Southwest retains fixed redemption levels for capacity controlled seats as a redemption option. Price-based redemption as an additional opportunity would be seen as an enhancement rather than a take-away.

Thank you very much, BNA-WNFan.

A hallmark of everything Southwest does - not only RR - is the KISS principle. This would catapult Southwest past the competition in complexity.

Giving benefit of the doubt, it may be that, like much good market research (looking for levers to fine tune), there's much more detail here than what we would see in the final packaged product. (If, in fact, this is the elephant whose trunk we have hold of.)

But if the guts are exposed, as herein, a different new elite than intended would certainly be identified: The people willing to spend a tremendous amount of time delving into the value of every transaction with Southwest and its partners. Conversely, it would certainly weed out many current participants who don't have either the time or acumen to calculate it time and again.

And, with an eye on the prize, how is it going to attract more business customers?

a different new elite than intended would certainly be identified: The people willing to spend a tremendous amount of time delving into the value of every transaction with Southwest and its partners. Conversely, it would certainly weed out many current participants who don't have either the time or acumen to calculate it time and again.

And, with an eye on the prize, how is it going to attract more business customers?

Actually, if one FTer can figure it out, we all will know.

As to attracting business customers, the idea is simple: reward customers based on how much profit they represent. Maintain good value for full-fare customers while legacy carriers trash their own FF programs for these same customers. Simple.

As someone who is required to use the lowest fare class for both business and leisure travel, this appears to be quite a devaluation, especially for those like me that travel occasionally but not often. I refer to the class of passengers that earn a few Awards every year but don't travel enough to get the CP or get onto the A-list. The big hit will be the dollar valuation. I've adjusted my patterns of travel to use SWA and its partners exclusively because doing so has resulted in my obtaining enough Awards to be able to take a few vacations I otherwise couldn't. Now there will be no incentive for me to do so as SWA, like every other airline, will have put the real benefit of the program - free flights - outside my reach.

As described in posts above the program is likely to be good for SWA's bottom line but they will have, IMHO, lost all real distinction from the legacies.

2. The points scale is un-Southwest: confusing at best.


One of the main reasons I added the editorial note in my comment above was to note that my observation was independent of this, which seemed the same at first glance.

Although I have always liked the simplicity of Southwest's program, they have changed it quite a bit over the years. I think back fondly of the days you could take your award to the airport and board the plane if there was a seat on the plane. You could also physically give the award to someone and they could easily convert it to an award. However those days are long, long gone.

One positive side to these proposals is the elimination of capacity controls, and I would take it a step further and why not do away with blackout dates, if you are changing the program to basically a rebate on money spent on Southwest (and partners) to be used on goods or services on Southwest (and partners).

This proposed new system is in keeping with Southwest's keeping it simple policy, as it appears the redemption part is still easy, the complexity is in the accural of the points, and you could play the complexity to your advantage, like many already do with other programs here in Flyertalk.

By basing the cost of the award in points by the value of the ticket in both earning and spending Southwest might actually pick up added revenue for people anxious to get a "free" ticket. You might also pick a less desirable flight to get it for fewer points. I would hope that by eliminiating capacity control Southwest would be returning to the "if there is a seat on the plane, you can get it with an award ticket" way of thinking. If that is the case. having the cost of the ticket determine how many points you get for a trip is much easier to swallow. People who buy 16 one way $29 commuter flights to get a free transcontinental flight are going to have a much different opinion however.

One question I would have is what happens if you cancel your award travel. This has always been a huge advantage to Southwest where there are no fees to redeposit unused awards. Under the new plan would they allow you to redeposit at no fee any ticket you don't use?

What about a compromise to allow you to purchase with points, say up to a $500 non-expiring Southwest gift card that could be used to purchase tickets for the blackout periods. Naturally there would be a premium for this option, but this would be an option smiled upon by the "whales", or business travelers that Southwest is seeking. Since Southwest can't offer upgrades to first class, offering a way to make sure you get a free ticket when you need it (or want to send it to a son/daughter/parent for an emergency) might be the tipping point to send you to Southwest.

I think the writing is on the wall, there are going to be changes, and the price of the ticket is going to enter into the equasion. It must. It would not surprise me to see other airlines stop giving frequent flyer points for their lowest of the low discount tickets. Many are doing this now by not giving points toward elite status (which many seek more than the award miles) on deeply discounted fares.

On Delta you now have to pay a fuel surcharge on award travel. When you add ticketing fees for booking the ticket on the phone, and extra fees if you don't do it 21 days in advance, it is no longer a "free" ticket.

The programs are going to change in the future, that is a given, the only thing now to be decided is just how bad the changes are going to be for the traveler.

It will be interesting to see the frequent flyer programs of say, 2010 when there are only maybe three major airlines still in business due to mergers and forced liquidation. With so few airlines will the frequent flyer program go the way of green stamps at the grocery store and gas station of an earlier era?

I would hope that by eliminiating capacity control Southwest would be returning to the "if there is a seat on the plane, you can get it with an award ticket" way of thinking.

Yes, that's almost verbatim from the survey I saw. It's a major selling point.

If that is the case. having the cost of the ticket determine how many points you get for a trip is much easier to swallow. People who buy 16 one way $29 commuter flights to get a free transcontinental flight are going to have a much different opinion however.

I resemble that remark...

One question I would have is what happens if you cancel your award travel. This has always been a huge advantage to Southwest where there are no fees to redeposit unused awards. Under the new plan would they allow you to redeposit at no fee any ticket you don't use?

Educated guess: Southwest will be very selective about any fees it imposes. This one would be pretty far down that list. So I'm thinking no redeposit fees.[/QUOTE]

I'm not in a position to evaluate whether Southwest "must" change its frequent flyer program at this time; but if it must, I think there are some downsides to both the flyers and the airline from this proposal.

The way the proposal was presented in the example above seemed confusing to me. Southwest could simply have said, "You will earn 5 points for every dollar you spend on Southwest fares," since that's how the OP's examples worked out. However, even with this in mind, it will be difficult for most people to know how many points they will need for some future trip, since they won't know that until the day comes that they actually price the trip (I take it that the number of points needed will be based on the actual fare you pay at the time you book).

I have no doubt that many on this board would be able to adapt to this proposal, but it's still not like the certainty of knowing in advance that you have X number of free trips available to you.

And I've always assumed that FlyerTalk was a relatively small--if elite--subset of the flying public. Even if many of us master this proposal, I think that Rapid Rewards will diminish substantially as an incentive for most of the rest of the flying public to choose Southwest--and for some members of this board as well--since the perceived certainty of their value in relation to future travel is diminished.

It may simply seem too uncertain to many people to grasp the equation between the dollars they are spending now and the future credits that they may be earning.

Up to now, with Rapid Rewards, and other airlines' programs as well, I have a moderate degree of certainty in the value of points earned, which serves as an incentive to fly a particular airline or airlines. I know that if I earn 100,000 points on Continental, I can book two free roundtrips to Buenos Aires (as I recently did). I know that on Southwest, if I earn sixteen credits, I have a reasonable chance (most of the time) of booking future travel. Therefore, I have the incentive to fly that airline now and earn credits, even if I don't know how I will actually use those credits in the future. That understanding gets muddied with this proposal, it seems to me.

My final concern has to do with auxiliary ways of earning credits. I earn a substantial portion of my free trips, on Southwest and other airlines, through credit card purchases. I assume that those purchases will also count towards future travel in the way described in the OP's example, though I don't remember seeing it described that way above.

Anything on those surveys about people who accrue large numbers of RR credits from WN Visa or hotel stays or car rentals? Or about contemplated changes to the Companion Pass, the only thing I really care about beyond the free tickets?

If they devalue those, I guess I'll just switch to a cashback card. I see that with Amex OPEN you can buy a giftcard for 5% off, less some fairly minor fees (I'm looking at the Costco Business card). Buy one of those cards for a few thousand bucks every couple months and just live off it. Maybe that's easier than all this goofing around with WN Visa/Choice Privileges/Diners/Amtrak/Hertz, etc.

It may simply seem too uncertain to many people to grasp the equation between the dollars they are spending now and the future credits that they may be earning.

Very well summarized.

As someone who is required to use the lowest fare class for both business and leisure travel, this appears to be quite a devaluation, especially for those like me that travel occasionally but not often. I refer to the class of passengers that earn a few Awards every year but don't travel enough to get the CP or get onto the A-list. The big hit will be the dollar valuation. I've adjusted my patterns of travel to use SWA and its partners exclusively because doing so has resulted in my obtaining enough Awards to be able to take a few vacations I otherwise couldn't. Now there will be no incentive for me to do so as SWA, like every other airline, will have put the real benefit of the program - free flights - outside my reach.

As described in posts above the program is likely to be good for SWA's bottom line but they will have, IMHO, lost all real distinction from the legacies.

If I understand you, I am in the same situation, only because I pay for all my travel myself. I do not see where any of these proposed changes affects the amount of SWA travel I do. As long as they have no fee change of flights, close to the lowest fare, frequent flights to where I want to go, the frequent flyer program is simply a plus and anything they do to it will not affect my flying pattern. What is it that you see that will cause you to abandon SWA?

Although many above think the proposal is better for the long haul flyers - have I not heard and read that airline lose more money (make less :confused:) on the long distance flights? So a $200 MDW-LAX flight will earn 2x points than the $100 PDX-RNO flight -- but which will be more profitable for WN?

I think there will have to be Black Out or Cap. Controls. Otherwise, most of the seats for "holiday time" will be on Points -- and probably about all the lower fare seats. SWA cannot raise fares to double around these times due to competion - and if redemption is based on fares, it will not be that much more even around holiday time.

It appears this proposal, in general, is a downgrade for most WN customers. One gets more of free travel now than they will in the future. I am not saying WN does not need to tighten the strings, but it is not an equal sum game IMHO.

I didn't sleep well last night after reading this thread:eek:

While I too think this looks more like a legacy program, the perks are good.

I am definitely pleased that at least with the survey, the level is determined by points or number of segments. That should make both the short haul and longer haul passengers happy.

Discounted/free internet is a great perk. I'm also intrigued by the discount on international travel.

Although many above think the proposal is better for the long haul flyers - have I not heard and read that airline lose more money (make less :confused:) on the long distance flights? So a $200 MDW-LAX flight will earn 2x points than the $100 PDX-RNO flight -- but which will be more profitable for WN?

The MDW-LAX flight should be more profitable, but not twice as profitable. And it uses more than twice the time and fuel.

SAPMAN, your argument supports basing earnings on segment count, with a substantial fare class bonus. For example, 1 point per segment for Ding fares, 2 points for 14-day to 21-day advance fares, 3 points for 7-day advance fares, 5 points for anytime fare, and 6 points for Business Select. I believe this would tie points accrual more closely to profitability.

I think there will have to be Black Out or Cap. Controls. Otherwise, most of the seats for "holiday time" will be on Points -- and probably about all the lower fare seats. SWA cannot raise fares to double around these times due to competition - and if redemption is based on fares, it will not be that much more even around holiday time.

I'm sure Southwest has thought of this. Because they had this problem in spades before capacity controls: flying through the holidays with revenue way, way down due to hordes of RR travelers. To some extent this is the price of having a loyalty program. But you are correct that blackout dates (mentioned in the survey) or capacity controls are needed.

If it has to be points, I like the Hotel Way. I always know how many points I need for that year to stay. I dont have to guess. They do have 'sales' like the Starwood Cash & Points.

I want a SIMPLE program. Today it is simple but as others have pointed out, those who fly higher fares dont always see the best ROI.

For me, it might be a wash. Personal flights, as cheap as possible. I value my RR at $150 each and if the flight is less, I buy, more I use a RR ticket. For 'Business' I find the cheapest flight I can but I usually end up paying close to full fare as 1) I have little notice and 2) I have less options to pick from based on when I need to go and be back.

As always, this will be what is best for WN. We will adjust.

Okay.. I think I understand it.

I'm not sure if I like it, but I think I understand it. I'm fairly certain i'd qualify for the lowest tier, assuming I kept somewhat similar travel habits in the future. Come to think of it, with point programs and such through other parties i might actually be the middle tier.

So, it'd take me about 10 flights to earn 1 flight. Currently it's 8 flights per 1 flight, no?

That's not bad, just not a great change. Devaluation always sucks a bit.

I wonder how any current points would transfer over?

I guess it's simple in the x10 terms. Fly a route often? It earn you Z-points, but to buy it you need Zx10. Earns 400? You need 4000. Makes sense i suppose, and that price should match your buying habits (always buy 2 weeks out and the fare should roughly be the same).

I think I'd miss last minute reward fares the most. A reward ticket might cost 3x as many points if you want to hop on or change last minute - that would suck.

It will be interesting to see the frequent flyer programs of say, 2010 when there are only maybe three major airlines still in business due to mergers and forced liquidation. With so few airlines will the frequent flyer program go the way of green stamps at the grocery store and gas station of an earlier era?
No.

They may eventually change in some signficant ways, but right now they make money for the legacy airlines. And, in fact, it's about the only thing they do right now that makes money!!! So why in the world would they want to get rid of the only thing that makes them money??? :confused:

That doesn't mean they can't devalue them in signficant ways. But that's quite different from "green stamps", which simply disappeared.

You have to remember that "green stamps" was an independent rewards program (not owned by the grocery stores that featured it). The FFPs are quite different in that way.

Also, there are countries in the world with only one or two major airlines, and yet they still have FFPs! (They may work differently in terms like expirations with no workarounds and such, but they're FFPs nontheless.) So why would only 3 legacy airlines in the US mean the demise of FFPs??? :confused:

If I understand you, I am in the same situation, only because I pay for all my travel myself. I do not see where any of these proposed changes affects the amount of SWA travel I do. As long as they have no fee change of flights, close to the lowest fare, frequent flights to where I want to go, the frequent flyer program is simply a plus and anything they do to it will not affect my flying pattern. What is it that you see that will cause you to abandon SWA?
Where I fly from (Chicago) and the places I go to, by my estimation basing the points on dollars spent and not segments as given in the survey examples will reduce the return (in free flights) seriously; to the point where at my level of flying I will rarely if ever earn an Award. Thus I will be driven solely by price and in Chicago SWA doesn't always win on that alone. Additionally I've patterned my hotel stays to maximize the potential of transferring points to SWA, factoring that in to justify occasional higher prices. If RR is diminished as I expect, my use of hotel loyalty programs will shift to maximization of hotel reward value or simply lowest cost with no regard to any airline.

If RR is diminished as I expect, my use of hotel loyalty programs will shift to maximization of hotel reward value or simply lowest cost with no regard to any airline.

Wouldn't A-list still be a reason to choose Southwest?

Although A List is a good thing -- not sure how much it is really worth. Sometimes I get Exit Row, often not as BS, thru pax, higher A list pax get ahead of me. Of course, day and time of flight and routing is a big factor.

Many regulars here say they prefer to get on at end of A anyway to "select" seat and seatmates. And usually, if quick on the draw, one can get a A BP (although harder as time moves on and more internet use).

I often wonder for those BSers who board a thru flight often feel when they board and all Exit rows are filled - with someone who bought a deep discount ticket and boarded at orgination point.

To get a BP in the A16-20 range, I would likely pay a max of $15 more, depending on distance. And likely 0 if not origin flight.

Where I fly from (Chicago) and the places I go to, by my estimation basing the points on dollars spent and not segments as given in the survey examples will reduce the return (in free flights) seriously; to the point where at my level of flying I will rarely if ever earn an Award. Thus I will be driven solely by price and in Chicago SWA doesn't always win on that alone. Additionally I've patterned my hotel stays to maximize the potential of transferring points to SWA, factoring that in to justify occasional higher prices. If RR is diminished as I expect, my use of hotel loyalty programs will shift to maximization of hotel reward value or simply lowest cost with no regard to any airline.

For me, SWA could do almost anything and as long as they kept no change fees, they would continue to be my airline.

Where I fly from (Chicago) and the places I go to, by my estimation basing the points on dollars spent and not segments as given in the survey examples will reduce the return (in free flights) seriously; to the point where at my level of flying I will rarely if ever earn an Award. Thus I will be driven solely by price and in Chicago SWA doesn't always win on that alone. Additionally I've patterned my hotel stays to maximize the potential of transferring points to SWA, factoring that in to justify occasional higher prices. If RR is diminished as I expect, my use of hotel loyalty programs will shift to maximization of hotel reward value or simply lowest cost with no regard to any airline.

...but based on the survey posted, it is either points earned OR segments flown.

Is it likely that RR 2.0 will occur at the same time as the first international alliance? I was suddenly hit with the realization that this proportionality of points to ticket dollar value could effectively nullify whatever advantage WN may gain by announcing any international alliances (at least for the leisure traveler). Doesn't the much greater "bang for the buck" have a lot to do with why the international opportunities are so important for the legacy FF programs?

Just finished an interesting conversation in the hot tub with a WestJet Marketing person who has been working with SWA on the new RR program, as well as a few other items.

First, the point system appears to be the way it's going to go. Almost like a cash back system, points/dollars earned, exchanged for credit towards a flight. It was mentioned that the SWA credit card would be a great value, as earning potential there would be very positive. Short hop flights, not so much.

It was also commented that there is interest in emulating WestJet's food purchase program, that SWA might be adapting WestJet's software package to allow for purchases in payment other than cash.

Another interesting tidbit, no partnership seen on the horizon with WestJet.

WN RR program is simple and easy to understand. If the problem is the short haul flight credits, then simply cut them to 0.25 per flight under 250 miles.

Another interesting tidbit, no partnership seen on the horizon with WestJet.

Chicago Tribune had an article today on SWA. The article stated that there would be a Canadian partner ( and that it would likely be Westjet ) and that Canadian partner would fly a bunch of flights into Midway where the transfer of passengers between the 2 airlines would occur.

Does Westjet fly to Alaska?

Does Westjet flies to Alaska?

No, but they fly to Hawaii from Vancouver, BC.

I would love WestJet as a partner since I have family "up north." PVD-MDW-YEG is much nicer than PVD-ORD-YEG, PVD-DTW-MSP-YEG, or PVD-PHL-PHX-YEG.

What sort of expansion capacity does WN have at MDW to handle a codeshare there with an airline of the Canuck persuasion? Can WN add enough that they'd actually end up cutting prices on domestic flights to/from MDW?

I imagine there are other markets with even higher average cost per mile, but my impression for several years has been that MDW has gotten awfully expensive. From my home base it is so bad that I could almost envision booking WN codeshare flights to Canada to utilize the hidden city technique if I needed to get to MDW. :eek: Granted the MDW prices may not be as offensive as prices to and from some legacy-dominated hubs, but it is not a pretty sight.

(Something to keep in mind when cheering the continued trouncing of the legacies by WN, IMO. MDW's history could be the future of your favorite airport.)

[INDENT]What sort of expansion capacity does WN have at MDW to handle a codeshare there with an airline of the Canuck persuasion? Can WN add enough that they'd actually end up cutting prices on domestic flights to/from MDW?

I can see indirect capacity additions at MDW through the addition of nonstops between other markets, reducing the domestic connecting traffic through MDW to make room for our friends from the North.

Chicago Tribune had an article today on SWA. The article stated that there would be a Canadian partner ( and that it would likely be Westjet ) and that Canadian partner would fly a bunch of flights into Midway where the transfer of passengers between the 2 airlines would occur.

Article:
http://www.chicagotribune.com/business/chi-sun-southwest-kellyjul06,0,2276936.story?page=1

Just finished an interesting conversation in the hot tub with a WestJet Marketing person who has been working with SWA on the new RR program, as well as a few other items.

First, the point system appears to be the way it's going to go. Almost like a cash back system, points/dollars earned, exchanged for credit towards a flight. It was mentioned that the SWA credit card would be a great value, as earning potential there would be very positive. Short hop flights, not so much.

It was also commented that there is interest in emulating WestJet's food purchase program, that SWA might be adapting WestJet's software package to allow for purchases in payment other than cash.

Another interesting tidbit, no partnership seen on the horizon with WestJet.I find it difficult to believe that WN would be working so closely with WestJet yet there would be no partnership on the horizon.

My reaction:

They're making it as complex as a Legacy program.

Not likely to affect my flying - but may make WN less attractive compared to a legacy as they break-down the A-list. A-list and fees are the important features to me, but there is no way - with my current travel patterns - that I'll ever make the high status levels on WN. I've got too much international (Eur/Pac) travel.

It seems Southwest is adopting a hotel model (pay more, get more points) for frequent flying. When frequent flier programs were first invented people paid more to go further, so giving rewards based on distance was fine, but we all know that has changed, not the least because of competition from airlines like Southwest.

While this change may affect me negatively I'm not against it -- except that it seems they are way overcomplicating it. Make it like Marriott or Hilton, ten points per dollar spent, bonuses for elite levels, and maybe make redemption at a few levels corresponding to hotel categories (ie I can search for a category 1 flight and redeem at the lowest level -- ie a Fairfield Inn in Podunk, IA, or category 7 for a flight right before Thanksgiving, ie the Marriott in Paris). Like another poster, no change fees will keep me with Southwest for my personal travel. For business travel, however, the jury is still out.

The challenge WN faces is that to bring in international partners they really need to change the earning model from free tickets to some type of stored credit system. Having to use two awards for an ATA ticket to Hawaii and now two Standard Awards for a Freedom Award worked okay before, but only because there were only a couple of options.

Honestly, I think they're doing they're homework on other options, but in the end the program will not be so radically changed, the points will be similar to what we see now (though I would expect greater usage of quarter points potentially), but we'll be able to bank them for different awards instead of accumulating awards automatically as happens now.

So, probably not going to change me much. I fly based on price almost exclusively, and SWA does it about best.

Just changed a ticket today. I LUV the no-change fee and I can not see while the other carriers cant do the same

I think people may be overanalyzing the $$ vs. points in the survey. It may be that there is no intent at all to have a sliding scale program, but instead they're trying to give a range of responders a range of tradeoffs to get a more accurate estimate of how much people value today's 1 RR credit, and how much they value other new perks such as guaranteed better boarding passes without waiting for T-24.

I know I don't buy BS fares for the extra .25 (I don't fly WN on routes long enough to qualify for the 2 points for BS). I don't even buy BS fares for the exit row, although it's a nice bonus when it happens - I usually end up in 14 through 16 C. I buy BS fares over Anytime fares because I know I'll get an aisle seat, and I don't have to worry about remembering to check in early. So, we've proven that I'm willing to pay $15 for that, just like I'm willing to buy-up to an exit row for $15-$20 when I occasionally fly Northwest or AirTran.

But is it really $15, or is it $20? That's what I think Southwest is trying to find out with this exercise.

Not a direct RR item, but what if WN expanded A-list by expanding the windows for credit earning flights from 12 months to 18 or 24 months? This would give more A list positions to their more frequent flyers (who probably already get an A position by doing 24 hr OLCI) and push others who haven't earned A-list to purchase BS if they wanted boarding prioirty.

Even for those with devalued points under the new system, this would still give incentive to fly over a legacy where you may get an undesirable assigned seat or at a minimum some boarding group number that only John Nash would be able to determine the logic behind.

With banked points closely linked to the dollar price of trips you can redeem for, it becomes harder for Congress and the IRS to ignore the program for tax purposes. The program described looks more similar to a cash rebate than to a traditional frequent flyer program. I hope Southwest has carefully considered this aspect!I haven't looked it up, but my guess is such a change, were it to happen, could possibly cut the other way. When you go to Home Depot and accept 10% off your bill for applying for their store credit card that is probably not taxable income. When you take advantage of a "buy three, get one free" sale at the tire store that is probably not taxable income My understanding is those examples are not taxable income because they are treated as a purchase price adjustment between the buyer and the seller. The same reasoning might extend to a case where an airline award program was structured so as to effectively yield a nearly-flat percentage "rebate" to the passenger.

Moving on to other issues discussed in this thread, several posts have mentioned profitability and the idea that the most profitable passengers should be rewarded the most. I fear that in this regard revenue and profit are not being adequately viewed as distinct concepts. Profit for an enterprise is a concept that is easy to understand and a number that is calculated fairly easily. Allocating total profit amongst individual passengers is far more complicated than just looking at how much each passenger paid, how far they flew, or any combination of those two. Let's look at some numbers from the financial statements and then examine some hypothetical scenarios that should demonstrate why.

For FY 2007 the WN load factor was reported (pdf (http://www.southwest.com/investor_relations/swaar07.pdf)) to be 72.6%; with that load factor, operating income was $791 million. Over 27.3 billion seat miles were not filled by revenue butts. At average fares, that represents missed revenue opportunities of $3.573 billion. Incremental costs would be minimal (a bit more fuel, snacks, paper & ink for boarding passes not printed at home, labor at check-in, baggage handling, and the gates, etc.). For simplicity suppose those costs would have been $0.573 billion. That means those additional passengers would have bumped profit up from $791 million to $3.791 billion. Stated another way, the revised profit would be 80% attributable to those new-found passengers. Of course wasted seats are always a big issue and we can't presume we could sell them all for the average ticket price. Suppose instead that WN had a system where it could sell every empty seat on a space-available basis for $12 over direct variable costs (DVC). The assumption above about $0.573 billion DVC is totally made up but it implies $17 DVC for each additional PAX, so the fare would be $29). Ignoring practicalities and issues like cannibalism of the existing revenue stream, filling those empty seats with (DVC + $12)/pop butts would boost system-wide profit by over 50%. Under a concept whereby award points are issued in proportion to profit, the folks who paid (DVC + $12) would "deserve" to be awarded a full 1/3 share of all award points given out for all flights. If you wouldn't like a system like that, you shouldn't be in favor of a system that attempts to award points to the most "profitable" passengers, and you shouldn't argue that points should be awarded in proportion to price from a fairness perspective. Of course the average passenger doesn't view the issues in this way, so marketing issues will of necessity outweigh fairness issues.

We can look at another example that is not so outlandish. Suppose each flight carries 80 PAX who paid the average $100 fare, 10 PAX who bought too late and had to pay $140; and 10 PAX who scored a DING! for $60., for total revenue of $10,000. Further suppose profit was $600. If the PAX who scored the great DING! are discretionary travelers who would not have flown if they had to pay $100, then the flight would have earned zero profit without the 10 DING! flyers. It wouldn't be practical to only issue award points to those 10 passengers, so it seems futile to attempt to base an award system on how much profit each passenger contributes to the mix.

The short-haul versus long-haul debate probably gets even more complicated. Costs and revenue are always reported per mile, but you can't just say the passengers who pay more per mile are more profitable. Some costs are fixed, some vary with miles, some vary with time. It takes more hours per mile to fly short-haul routes, so fares per mile have to be higher to cover the costs. But as noted in another post (http://www.flyertalk.com/forum/showpost.php?p=10109600&postcount=46), short-haul flyers pay dramatically more per mile for their air travel, quite possibly more so than is justified by the operating expense difference. I have nowhere near enough data (or time) to try to calculate that.

As a partial substitute for identifying the most profitable passengers, WN could award bonus points to folks on sold-out flights. To be fair and/or as a token of goodwill, they could also try to give bonus points to those who paid an average or even above-average fare but but received a below-average service in return. Taking a middle between two strangers would seem to qualify. Again, practicalities would interfere with implementation. Awarding bonus points to "C" group boarders would be another way to go, and that would take some of the pressure off the rush to be first for OLCI. So again once we try to throw concepts of fairness into the awarding of "loyalty points, things can get awfully messy.

As a partial substitute for identifying the most profitable passengers, WN could award bonus points to folks on sold-out flights. To be fair and/or as a token of goodwill, they could also try to give bonus points to those who paid an average or even above-average fare but but received a below-average service in return. Taking a middle between two strangers would seem to qualify. Again, practicalities would interfere with implementation. Awarding bonus points to "C" group boarders would be another way to go, and that would take some of the pressure off the rush to be first for OLCI. So again once we try to throw concepts of fairness into the awarding of "loyalty points, things can get awfully messy.
I've often thought similarly and believe that it would generate lots of goodwill for very little cost if each flight crew was given the ability to, say once per month or quarter, give out a 0.25RR "Share the LUV token" to anyone on a flight who does something particularly nice for other passengers. Things like giving up your prime window seat and moving to 28B so that a family to sit together, waiting to deplane so that somebody else who has to can exit in time to catch their connection..acts of courtesy one never sees anymore. To eliminate chicanery the token would require some proof you were actually on the flight like your confirmation number, RR number or boarding pass stub.

I went back and reread this entire thread, looking for comments on two issues that have recently appeared on my radar screen. I will qualify for a Companion Pass by October. When I do, I will probably be letting a RR Award expire and keep it "available for future reissue", rather than "burn" it on my companion.

My questions for both previous commenters and not yet heard from.

1. Thoughts on changes to the Companion Pass program. Would it go away, be grandfathered until it expires, or changed?

2. Will expired awards be permanently expired, no longer available for reissue.

3. What will happen to valid RR awards with expiration dates beyond the new changes effective date.

You have an interesting argument, and load factor/yield are two of many traditional means of measuring an airline's health. While using standby pax to fill up flights gets rid of the overbooking problem, which is one of the issues with high load factors--high 70s and above. There's one thing you may not have considered when it comes to "topping off" flights with incremental income. The load factor is a systemwide average. Flights between A and B may operate at an 85% LF, while flights between C and D have a 45% LF. Bill Owen has written about our optimized schedules to cull out poor performing flights, but the demand, even for low cost standby travel has to be there. It's like the Antiques Roadshow. An appraiser may say an item is worth $1,500, but you have to have two people at an auction who want to buy that item. Obviously, there would be costs in carrying standby passengers. Ticketing and processing them would take money, additional fuel or possible offloaded cargo to accommodate them is another cost, it takes time during the boarding process to handle standbys. So you would have to set a standby fare at a level to recoup these costs and to make a profit. The danger is that this fare, even for standby, might be higher that the travelers in the market would pay for low demand service. Summing up, you can't always lower fares enough to stimulate demand and still generate a return. But, there are some cases where you could. I just don't know if opening all of these cans of worms is the right step. I will certainly share this thread with our Leaders, though

I went back and reread this entire thread, looking for comments on two issues that have recently appeared on my radar screen. I will qualify for a Companion Pass by October. When I do, I will probably be letting a RR Award expire and keep it "available for future reissue", rather than "burn" it on my companion.

My questions for both previous commenters and not yet heard from.

1. Thoughts on changes to the Companion Pass program. Would it go away, be grandfathered until it expires, or changed?

2. Will expired awards be permanently expired, no longer available for reissue.

3. What will happen to valid RR awards with expiration dates beyond the new changes effective date.

1. CP program will continue very much as it is under the proposal I saw.

2. Expired awards will likely be reissued as a fixed amount of points, in the mid range of redemption. Note to SWABrian: I highly recommend that Southwest provide at least 30 days' notice before stopping reissuance of standard awards as such.

3. RR awards will be valid under their current terms until they expire. Anything else would be a retroactive change, IMHO.

Last night I dumped a bunch of MR points to RR. I did this because WN has a history of 1) not giving enough notice or any notice on RR changes and 2) any changes WN has put forth has been good for WN, not the customers.

While I spend a good number of $$ on WN short haul flights (flights that are WNs Bread and Butter) and do see value, I dont want to be caught off guard.

Last night I dumped a bunch of MR points to RR. I did this because WN has a history of 1) not giving enough notice or any notice on RR changes and 2) any changes WN has put forth has been good for WN, not the customers.

When did RR change without notice? I must have been asleep or something, because I don't recall it. No-notice changes are Carlson's specialty, and now Choice's.

Changes almost never increase the value of FF programs. WN has made an effort to throw us a bone when devaluing the program, notably by extending expiration of credits to 24 months. If you can show me when other programs have made changes that increased their value to customers, I'm all ears. I can't recall it ever happening.

When did RR change without notice? I must have been asleep or something, because I don't recall it.
What was the notice for $50 renewal of expired RR awards dropping from anytime to max 2 years after expiration? I'm sitting on a years-old award that became useless to me because I didn't realize that change was coming up. As such, I've lost much more value from Southwest's one (even if only) unannounced change than I have from Choice's unannounced changes. (Btw, the latest change at Choice -- requiring CC or stay for all transfers out, was announced ahead of time.) And, in fact, I may have lost more from Southwest's one (even if only) unnaounced change than I have from Carlson's (given that my timing was such that one month announcement still wouldn't have helped me save more than that one lost RR "freedom award" would have.

What was the notice for $50 renewal of expired RR awards dropping from anytime to max 2 years after expiration? I'm sitting on a years-old award that became useless to me because I didn't realize that change was coming up.

Are you sure it's not recoverable? Did you write a letter and ask, enclosing your $50 check? If you have the old ticket number, I'd give you an excellent chance of success.

What was the notice for $50 renewal of expired RR awards dropping from anytime to max 2 years after expiration? I'm sitting on a years-old award that became useless to me because I didn't realize that change was coming up.

I may be mistaken, but I believe that the reissuance of expired awards used to be an unpublished benefit. When they formalized it by adding support for it to the website, they made it a published benefit and set the 2-year expiration rule.

I may be mistaken, but I believe that the reissuance of expired awards used to be an unpublished benefit. When they formalized it by adding support for it to the website, they made it a published benefit and set the 2-year expiration rule.

The 2-year rule existed as a soft limit when the benefit was unpublished. From what I heard, if you knew the ticket number for the (then paper) award you were good to go. Otherwise it was best efforts for Southwest to find it, but no guarantees.

When did RR change without notice? I must have been asleep or something, because I don't recall it. No-notice changes are Carlson's specialty, and now Choice's.


MR -> RR

http://www.flyertalk.com/forum/showthread.php?t=385830

MR -> RR

http://www.flyertalk.com/forum/showthread.php?t=385830

I still blame that on Amex. Because Amex was the customer's point of contact and therefore it was Amex's job to provide notice. For RR -> MR, which has never existed, you'd be correct to blame Southwest.

That said, Southwest's partners have a horrible track record. Southwest really ought to choose more reliable partners or terminate the relationship when they act this way.

we made the decision to publish the information on our respective websites when the change went into effect, January 1, 2005.

The key word is 'we'. While AMEX was part of this, WN had a hand in this as well.

In the end, Southwest could have made this right and given the extra credit to those of us who made the exchange in Jan.

In the end, my point is, changes are coming. I dont see how they will be better for me (maybe I am wrong) but I wanted to protect myself with the MR rewards points I have. I put in enough WN Credits on both mine and my wifes account to secure CP for another year at the same time.

Maybe I guessed wrong but as they always say, a bird in the hand is worth two in the bush.

Gary Kelly said today "We're open" to changing Rapid Rewards to a "next generation program". Southwest is "looking at options to make it more appealing". The new program is "coming next year".

He said that fundamental software now under construction is necessary for the rollout. Specifically, CS2 "is the first car of the train and we have three others".

Because Southwest has so many of these software projects underway, the rollout might suffer delays. Therefore he didn't want to get specific on the target date.

He is proud of what Southwest's folks are doing. They want it to be perfect, and "when we get it done it will be".

Here are my inferences, speculation, and suggestions:

Rapid Rewards 2.0 is quite definitely in our future. It will bear a strong resemblance to the proposal on which the opinion survey was conducted (see post number 7 of this thread).

Today's Rapid Rewards has the following perceived weaknesses:

1. Capacity Controls make it difficult to plan family award travel during school vacations. You don't know whether you will get seats on the dates you need until the schedule opens. Most RR members will not have enough earnings to shell out a Freedom Award for every family member.

2. There are no redemption options for Hawaii or international destinations.

3. One RR credit is too large a unit of value for some partners to purchase. Even half a credit is too expensive for potential partners such as online shopping sites. If the earnings units were smaller, Southwest could sell them in more ways.

4. A full award is too coarse a unit to redeem for partner awards of disparate value. Even half an award is a very large value increment for this purpose. If the redemption units were smaller, Southwest could tailor redemption price much more closely to award value.

5. Earnings are not correlated with profitability of the activity. People like me who buy $49 fares earn the same as people spending $300 or more. Traditional mileage-based programs also fail this test, because long-haul flights are not necessarily more profitable than short-haul flights, especially with $100+ oil prices. A better earnings model is needed.

6. Rapid Rewards lacks a "cash and miles" option, something that Randy Petersen sees as soon to be a mainstream offering of most programs.

7. Items recently addressed are priority and priority screening for elite members. First class upgrades remain impossible to offer.

The more I study the proposal on which the opinion survey was conducted, the more I realize that with some minor adjustments it can address all the criticisms of the current Rapid Rewards except the lack of first class upgrades. Legacy airlines are on track to eliminate free first class upgrades for all but their very top members, so maybe that won't matter so much.

The surveyed proposal addresses item 1 by basing redemption price on cash price. If you can estimate what the cash price will be, you will know what the redemption will require. The banked points aspect of the proposal address items 3 and 4. Planned partnerships address item 2. Cash and points (item 6) would be trivial to add. As to item 5, I believe that a fare-class based system, independent of dollar amount, would most closely approximate profitability. Full fare would get 1.5 times credit, 7 day advance fare would drop you to regular credit (whatever 1 segment equates to in points), and more than 7-day advance fares would get 75% credit. Ding fares would get 50% credit. Business Select would get double credit. This is pretty simple, even though it essentially forces addition of a second column to "Wanna Get Away" in the fare display.

I'd like to see a capacity-controlled fixed-price redemption option similar to today's standard award, for people who like to seek out a better redemption deal. That would be for travel on WN metal only.

So there you have it: the probable new face of Rapid Rewards, in my opinion and completely unconfirmed and unconfirmable.

As a side note, I have complete confidence that Southwest will handle the transition generously to current RR members. I haven't given much thought yet to those specifics.

Cruisers Club
Requirements:
Get 16,000 qualifying points by flying on Southwest Airlines, or fly 15 roundtrips (30 one-ways) within a 12-month period
Bonus Points:
25% bonus points when flying Southwest
Other Benefits:
Automatic priority check-in before your flight to ensure an early boarding group – most likely an A Priority position on standby list (behind Jet-Setters Club and Ascenders Club Members) Priority or Express security lane in airports, where available Express check-in lane at the ticket counter, where available Exclusive phone line when calling Southwest Reservations or Customer Relations 15% discount on points required to redeem reward travel to international destinations

Jet-Setters Club
Requirements:
Get 32,000 qualifying points by flying on Southwest Airlines, or fly 30 roundtrips (60 one-ways) within a 12-month period
Bonus Points:
50% bonus points when flying Southwest
Other Benefits:
All Cruisers Club benefits plus: Priority position on standby list (behind Ascenders Club Members) Free drinks onboard 50% discount on broadband Internet connectivity in-flight 25% discount on points required to redeem reward travel to international destinations

Ascender's Club
Requirements:
Get 42,000 qualifying points by flying on Southwest Airlines, or fly 40 roundtrips (80 one-ways) within a 12-month period
Bonus Points:
100% bonus points when flying Southwest
Other Benefits:
All Cruisers Club and Jet Setters Club benefits plus: Highest priority position on standby list Free broadband Internet connectivity in-flight No blackout dates when redeeming points on Southwest Airlines 30% discount on points required to redeem reward travel to international


Using the proposal from Post 7 on this thread, any thoughts on how SWA would determine the inital memberships for the Cruisers Club, Jet-Setters Club, and the Ascender's Club? Previous 12 month's activity, perhaps?

Using the proposal from Post 7 on this thread, any thoughts on how SWA would determine the inital memberships for the Cruisers Club, Jet-Setters Club, and the Ascender's Club? Previous 12 month's activity, perhaps?

Probably. That's how A-List was handled.

I'd expect 3 to 6 months' notice of the change, at the end of which all RR credits will convert to points. RR credits that were already converted to awards would count as historical points for elite status.

As an "old timer" about to retire, I wonder if there will be any provision for some type of status for the "golden years". I've been a CP and A-Lister almost since its inception but will cut back upon retirement. Yes I've benefited handsomely and in return trumpeted WN to all.

It appears that legacy carriers have decided to eliminate the traditional 500-mile minimum credit. This puts legacy FF programs at a huge disadvantage to today's Rapid Rewards program.

Southwest needs to think twice about excessively devaluing RR 2.0 for short-haul customers. Some FTers have already defected to Southwest over the elimination of 500-mile minimum credit. Southwest should try to keep those newly won customers.

Only US & UA have eliminated the 500-mile minimum. CO has retained it for elites, and DL/NW/AA haven't touched it.

Probably. That's how A-List was handled.

I'd expect 3 to 6 months' notice of the change, at the end of which all RR credits will convert to points. RR credits that were already converted to awards would count as historical points for elite status.

Your thoughts as to how existing awards will be handled? Will they be reconverted into RR credits to then be converted into points or allowed to run their course as awards?

Your thoughts as to how existing awards will be handled?
They will certainly be left to be used or expire normally.

Virgin America recently (finally) released the other half of its FF program: a redemption structure. It's remarkably similar to the surveyed version of RR 2.0.

Tim Winship (http://www.smartertravel.com/blogs/up-front-with-tim-winship/virgin-america-rewrites-some-mileage-program-rules.html?id=2749856) says that it's good except for the 18-month rolling expiration policy. The first commenter on Tim's article notes the lack of ability to play the game of redeeming relatively few points for a high-value award. That may be less of a loss than I thought, given the increasing difficulty of that game with legacy carriers, as reported by Gary Leff on View From the Wing. If Gary is finding the game hard to play, you and I might as well just give up...

Years ago, High on Luv (then our official lurker) told me that RR had a problem with customers who would buy cheap short-haul tickets and redeem for expensive long-haul tickets. Such touching naivete. The proposed RR 2.0 structure (and Virgin's program structure) solves that problem, providing value similar to the current program if you redeem for exactly the same kind of trip that you purchase.

But the name of the game of FF programs has always been to earn cheaply and redeem for expensive trips that you would not have paid cash for. The new program structure spoils the party. Or it would if the party had not already been spoiled by capacity controls.

If I had to choose between today's program with today's capacity controls and a Virgin-like program, I'd greatly prefer today's program. But Southwest wouldn't, so we will get a change.

I suppose no news is good news...

Here's more support for the need to retain an aspirational aspect, e.g. excitement of the amazing bargain, from an Aeroplan interview (http://business.theglobeandmail.com/servlet/story/RTGAM.20090120.wrupertDuchesne0120/BNStory/robAtWork/home) linked from View from the Wing (http://boardingarea.com/blogs/viewfromthewing/):

Probably 85 per cent of our rewards are air tickets. About one-third of those are trips around the world with Star Alliance airlines, and two thirds are with Air Canada. They could also be trips around the world, but obviously substantially domestic as well.

It seems that people participate in these schemes for aspirational rewards. If you just offer them $5 off every other week when they shop at their drug store, it doesn't have the same stickiness as the prospect and aspiration of travel. The other 15 per cent is comprised of gift cards, iPods, car rentals and hotel rooms. But the core want is still the travel and people will save for two, three, four or five years to get that travel reward. So, they're constantly thinking as they visit their drugstore or grocery or gas or spend with their credit card about that aspirational reward that is coming two, three, four years hence. That's really what ties people in to the accumulation side of these programs.

If Rapid Rewards 2.0 retains capacity-controlled fixed point redemptions as an option, and if this option looks like a great value to members, this could fill the need for aspirational awards. Being able to redeem a known number of points for a trip to Wally World or even another country, provided that one has sufficient date flexibility, is what customers want from a FF program. A flat 10% rebate is boring by comparison.

I couldn't agree more. It is my distinct impression that most folks place an excessive valuation on free travel. They give up far more in alternative cash/cash-equivalent incentives for a shot at free travel. (Free long-distance phone calls have long had a similar tendency to be vastly over-valued.) I frequently see examples of travel award-induced economically irrational behaviour.

Boardingarea.com has a blog post (http://boardingarea.com/blogs/viewfromthewing/2007/09/29/the-coming-spinoff-of-airline-frequent-flyer-programs/) about airlines actually or potentially spinning off their award programs and how incredibly profitable the programs are. I wonder whether Rapid Rewards is a major profit center for SWA. I suspect it may not be, but I also figure the odds of it getting there will go down if RR 2.0 looks like what the surveys suggest it might.

SkyTeam is accelerating its race to the bottom. The AF/KL, DL, and NW forums are full of customers irate at this year's short-notice devaluations. In this environment, simply holding the line against devaluations will substantially improve the competitive position of Rapid Rewards.

I'm wondering whether the new accounting rules (miles must be counted as a liability at non-trivial value) are motivating all these recent devaluations. And I wonder whether Southwest is similarly motivated. At Media Day, Randy Petersen asked about the effect of the new accounting rules, but Southwest deflected the question in a way that made me wonder whether they were familiar with the issue.

Here's more support for the need to retain an aspirational aspect, e.g. excitement of the amazing bargain, from an Aeroplan interview (http://business.theglobeandmail.com/servlet/story/RTGAM.20090120.wrupertDuchesne0120/BNStory/robAtWork/home) linked from View from the Wing (http://boardingarea.com/blogs/viewfromthewing/):I don't thinking looking at what any other airlines says or does has any bearing on what WN will ultimately do. WN has an established history of doing what they believe is best regardless of what other airlines say or do.

I honestly don't think WN will make radical changes to the program, I think it will just go to a banked point system with the points earning and redemption options being similar to what is now available with the addition of more redemption options as codeshare partners are added of course.

My guess is that WN recognizes that (like 'No Nuisance Fees') there is a competitive advantage to avoiding wholesale devaluation. I'd guess that they won't do what DaLusers and SkyTeam are doing... for one, it would be counter to the "no fees" mentality to charge for changes in award tickets, for two, most fares earn 1.0 credits now with more for BS fares (nothing to cut there, though I suppose they could offer less credits on the cheapest fares).

What I think is more likely to happen is that the program will expand to gain more ancillary/non-flight revenue. This seems to be driving most airlines, who (like the banks did) are moving to get away from their core business and into a business that's different than the core.

I'm wondering whether the new accounting rules (miles must be counted as a liability at non-trivial value) are motivating all these recent devaluations. And I wonder whether Southwest is similarly motivated. At Media Day, Randy Petersen asked about the effect of the new accounting rules, but Southwest deflected the question in a way that made me wonder whether they were familiar with the issue.

Doesn't this effect WN less than others because the credits all expire within 24 months? My US account keeps its balance as long as I fly once every 18 months, so those miles can sit around practically forever.

Doesn't this effect WN less than others because the credits all expire within 24 months?

Yes, definitely. Southwest only has to carry one year's worth of awards as a liability. But that's still a lot.

Southwest's new partner WestJet is planning a loyalty program even more like a rebate system than Virgin America's Elevate. From the interview (http://business.theglobeandmail.com/servlet/story/RTGAM.20081229.wryearwestjet30/BNStory):

We'll put a loyalty program in place by the second quarter of next year for our frequent fliers. It will be simple and easy to use. If you spend $1,500 [Canadian], you would get a certain percentage of value in a credit file. You'll be able to use that amount on any flight at any time or on WestJet Vacations.

...

We'll have a competitive loyalty program. The more you spend, the better your reward rate is — at $3,000 or $4,500 in spending. When you get a certain higher dollar amount in your credit file, you might get a companion ticket or ancillary benefits like free buy-on-board stuff. We'll also introduce a loyalty credit card.

Assuming that WestJet is talking with the Rapid Rewards people, this is one more indication that RR 2.0 will be a rebate-style program.

Assuming that WestJet is talking with the Rapid Rewards people, this is one more indication that RR 2.0 will be a rebate-style program.The Canadian airline market is absolutely nothing like the US airline market, I don't think you can make any assumptions that anything WestJet does for its frequent flyer program will have anything to do with WN.

Considering this thread was started about 7 months ago, I would expect the RR 2.0 is already pretty well developed. Lots of speculation as to how much, if any, advanced notice we customers will get -- I expected an anouncement in January.

Any further "confirmed rumours" lately?

Hmmm...what changes will this bring?

http://finance.yahoo.com/news/Southwest-Airlines-Selects-prnews-14236436.html

Southwest Airlines has selected Wunderman as its Agency of Record for the airline's award-winning frequent flyer program, Rapid Rewards. The account will be managed from Wunderman's Irvine, California office and will utilize the resources of the Wunderman network.

Wunderman will be tasked with strategic, creative, and analytical responsibilities related to Rapid Rewards marketing communications programs. Southwest and the agency will work together to develop campaigns in a range of mediums.

The unveiling of Rapid Rewards 2.0 might be pushed back until next year.

http://blogs.wsj.com/middleseat/2009/02/06/southwest-working-on-new-frequent-flier-plan-cell-chatter-at-ryanair/?mod=rss_WSJBlog

Laura Wright, Southwest’s chief financial officer, told the Raymond James Growth Airline conference on Thursday that Southwest is working on revamping its frequent flier program, which offers free tickets based on the number of trips you fly rather than miles traveled. Ms. Wright says the revamp is expected late this year or early in 2010.

Laura Wright, Southwest’s chief financial officer, told the Raymond James Growth Airline conference on Thursday that Southwest is working on revamping its frequent flier program, which offers free tickets based on the number of trips you fly rather than miles traveled. Ms. Wright says the revamp is expected late this year or early in 2010.

http://blogs.wsj.com/middleseat/2009/02/06/southwest-working-on-new-frequent-flier-plan-cell-chatter-at-ryanair/

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The unveiling of Rapid Rewards 2.0 might be pushed back until next year.

http://blogs.wsj.com/middleseat/2009/02/06/southwest-working-on-new-frequent-flier-plan-cell-chatter-at-ryanair/?mod=rss_WSJBlog



Thank God. ^^^

Other observations: RyanAir isn't putting their CEO out front, this time... And it's surprising that they don't refer to the recent announcement that RyanAir is preparing an order of 400-600 737-800s. Perhaps this release preceded the other.

Hmmm...what changes will this bring?

http://finance.yahoo.com/news/Southwest-Airlines-Selects-prnews-14236436.html

"Lipstick on a..." comes to mind. But then, it may be that their first act was to advise setting it back.

Another thought: It seems that what Southwest does here must proceed in step with what their (including prospective) partners do or don't. So it's part of a larger system. And a really large one - with lots of moving parts out of its control - for Southwest to be managing. Not to go off topic here, but could this also be a reflection of the pace at which the larger system - e.g., the partnerships - is proceeding?

A little more info on the timing of the changes.

http://blogs.wsj.com/middleseat/2009/02/06/southwest-working-on-new-frequent-flier-plan-cell-chatter-at-ryanair/?mod=yahoo_hs

I'm personally looking forward to the changes -- whatever they are. The current program -- with its tighter capacity controls -- is so boring that it actually provides almost no incentive for me to book travel on WN. Fly 16 times for the right to get a ticket that I can otherwise buy for $99? That's about as exciting an incentive as I get at the sub shop, where my tenth sandwich is free.

....Fly 16 times for the right to get a ticket that I can otherwise buy for $99? That's about as exciting an incentive as I get at the sub shop, where my tenth sandwich is free.

Diff'rent strokes....

From my perspective, those 16 credits represent about $700-1,000 worth of expenditure, at most (it's not just flights...that includes hotels, rental cars, and other credit card charges that I would've made regardless of whether I fly or not). I can then turn around and use the reward for a roundtrip ticket worth $250-350.

In this case, excitement is not as important as value. :)

I can then turn around and use the reward for a roundtrip ticket worth $250-350.

Rare is the circumstance where you can get $350 in REAL value out of a RR ticket these days. Except for last minute bookings, it would pretty much have to be a "peak day" transcon flight where -- miracle of miracles -- WN still has award seats available but you can't get a decent fare on WN or its competitors.

Real world example: travelling transcon from SEA to WAS on my own dime during summer. My wife needs to fly on Sunday. Cheapest fare in the market was $149 ow way. I used a RR ticket, which still had some Sunday availability (because I'll almost never get that much value from a RR award). My own departure will be on a Tuesday. DL will sell me a ticket for $99 for this off-peak day. As a CO plat, I will earn about 5000 OP miles on that itnerary (worth about $50), so the real cost of the ticket for me is 50 bucks. I bought the Delta ticket for myself.

And I think this is an extreme example. Most WN frequent flyers don't do many transcons.

This is why I'm hoping for a "sexier" RR 2.0. The current program is completely utilitarian, and not aspirational. It's been that way ever since they imposed capacity controls.

Rare is the circumstance where you can get $350 in REAL value out of a RR ticket these days.

Not that rare....I was able to do this (SJC<->PHL) several times over the past year (one extreme case was a short-notice transcon that would've been $300+ each way).

Like I said, RR in its current form may not hold much appeal for some, but it works very well for me.

Rare is the circumstance where you can get $350 in REAL value out of a RR ticket these days. Except for last minute bookings, it would pretty much have to be a "peak day" transcon flight where -- miracle of miracles -- WN still has award seats available but you can't get a decent fare on WN or its competitors.

Real world example. Visiting my brother in Denver, coming from Albany. Friday March 13 (leaving after work, so must be 5pm or later) - Monday March 16. Total wanna-get-away fares after tax: $330.90. Used a standard award to get it for just the 9/11 fee. Booked it last month, certainly not last minute.

Cheapest non-WN fare found, via sidestep.com: $378 on Northwest.

Rare is the circumstance where you can get $350 in REAL value out of a RR ticket these days. Except for last minute bookings, it would pretty much have to be a "peak day" transcon flight where -- miracle of miracles -- WN still has award seats available but you can't get a decent fare on WN or its competitors.

Real world example: travelling transcon from SEA to WAS on my own dime during summer. My wife needs to fly on Sunday. Cheapest fare in the market was $149 ow way. I used a RR ticket, which still had some Sunday availability (because I'll almost never get that much value from a RR award). My own departure will be on a Tuesday. DL will sell me a ticket for $99 for this off-peak day. As a CO plat, I will earn about 5000 OP miles on that itnerary (worth about $50), so the real cost of the ticket for me is 50 bucks. I bought the Delta ticket for myself.

And I think this is an extreme example. Most WN frequent flyers don't do many transcons.

This is why I'm hoping for a "sexier" RR 2.0. The current program is completely utilitarian, and not aspirational. It's been that way ever since they imposed capacity controls.

Real world examples:

Wife CP My Awards
10/18/2008 BDL-LAS 187.00 187.00
10/22/2008 LAS-BDL 158.20 158.20
12/11/2008 BDL-LAS 199.00 199.00
12/15/2008 LAS-BDL 199.00 199.00
12/22/2008 BDL-LAS 296.50 0.00 *
1/4/2009 LAS-BDL 215.00 215.00
2/12/2009 BDL-LAS 115.00 0.00 **
2/17/2009 LAS-BDL 99.00 0.00 **
3/28/2009 BDL-LAS 252.50 252.50
4/1/2009 LAS-BDL 99.00 0.00 **
5/19/2009 BDL-LAS 215.00 215.00
5/24/2009 LAS-BDL 199.00 199.00
7/1/2009 BDL-LAS 185.60 185.60
7/7/2009 LAS-BDL 169.60 169.60

All were booked at the opening of the window.

* indicates paid flights, no award available
** indicates paid flights, $99-$125 fares available, not worth spending an award on.

Total value $4500+, combined CP & award tix.

(sorry for the formatting, cut & paste from excel)

Real world example. Visiting my brother in Denver, coming from Albany. Friday March 13 (leaving after work, so must be 5pm or later) - Monday March 16. Total wanna-get-away fares after tax: $330.90. Used a standard award to get it for just the 9/11 fee. Booked it last month, certainly not last minute.

Cheapest non-WN fare found, via sidestep.com: $378 on Northwest.

^

And even if the fare on NW was $278...still worthwhile use of an award, no?

Rare is the circumstance where you can get $350 in REAL value out of a RR ticket these days. Except for last minute bookings, it would pretty much have to be a "peak day" transcon flight where -- miracle of miracles -- WN still has award seats available but you can't get a decent fare on WN or its competitors.I am flying LAS-MCI on April 12th (this is not hypothetical, but a real-world scenario). When I booked I had the choice of payign $250 or using half a Standard Award. $250 for half a Standard Award sounds pretty good to me. I was able to get a relatively cheap fare there at $150, but heck that would have been $400 if I had went ahead and used the other half of the award for that ... but then again, there's one of the beauties of RR, I can book awards as one-way without a penalty!

Not attempting to pile on the "real" examples but I just booked 2x RT's PHX-MSP with RR's for this summer. The MINIMUM rt cost on WN (which happen to coincide with RR availability) for off peak times comes out to $443.40. Unfortunately, WN isn't competitive with the legacy carriers for this routing quite yet as one can book nonstops for about $300. But for me, combined with my CP my family easily saved almost $1000 for this trip.

We'll all have to wait and see what 2.0 brings to the table - unfortunately, I'm afraid any changes will be detrimental to most as compared to the current program. Although I only have an opportunity to use it a few times a year, I'm hoping that 2.0 still contains some provision to attain a companion pass.

If RR 2.0 matches the survey in post #7 of this thread, all you people who have gotten great deals on redemption will be disappointed. A high cash price will mean a high redemption price, period. Last-minute redemption will be very expensive, and that's a major devaluation from today's program.

Also note that getting a great deal at redemption doesn't guarantee that you got a great deal. Fares change. They change frequently and they can rise and fall enormous amounts. I had an award booked for my wife because the best SWA fare was over $200 AI one way. Meanwhile, one or more legacies had the route at $100 to $112 AI every time I checked over the course of almost two full months. I never felt we were getting $200 value for the ½ award because the SWA fare was out of line with the competition. Suddenly just 18 days before departure, either somebody canceled some tickets or the single fare class below $184 was expanded by a couple seats. I was able to book for $100 AI on WN, saving the award for some future trip.

One enormously irritating aspect of the RR format described in the survey is that it would become necessary to reprice your award tickets on a daily basis. You would have to monitor it all the time to see if you can rebook your award to recover some of the points you burned because you booked when the fare was too high...if the program will allow that. (For example, I see many summer fares that look about 50% higher than I expect to be able to pay eventually. So I booked an award in case I'm proved wrong, and I monitor the fare waiting to buy it at the right price.) Currently on many itineraries you can book an award and have at least some confidence that the fare can't go low enough that you need to check every day to be sure you want to use the award instead of paying for a ticket.

If RR 2.0 matches the survey in post #7 of this thread, all you people who have gotten great deals on redemption will be disappointed. A high cash price will mean a high redemption price, period. Last-minute redemption will be very expensive, and that's a major devaluation from today's program.

I've been attempting to keep my head in the sand and believe WN won't go the way of the legacies. The reality is that a major devaluation is coming - I only hope that WN gives plenty of notice before & when 2.0 is launched.

My dream program: for every 16 miles flown, you get 1 free mile. Anytime, no blackouts, if there's a seat on the plane, you can book.

I always fly the same route, so it makes sense to me. :cool:

I've been attempting to keep my head in the sand and believe WN won't go the way of the legacies. The reality is that a major devaluation is coming - I only hope that WN gives plenty of notice before & when 2.0 is launched.

I'm with you there. The current system has been very, very good to me. And I don't feel guilty about other current RR members "subsidizing" my awards and CP. :D

On a related note, the current RR program is short on elite recognition but great on redemption (for those of us who buy short haul Dings and use awards for expensive transcons:p). If RR 2.0 does throttle down on the redemption side, then perhaps they can find ways to beef up elite recognition? That will go a long ways towards taking the sting out of flying the same amount but getting less in return.

My dream program: for every 16 miles flown, you get 1 free mile. Anytime, no blackouts, if there's a seat on the plane, you can book.

. :cool:

Never happen. Too many high revenue days... such as days before T-Day, Christmas, Spring Break from major college towns, etc. Also, busy business days will fill many planes and all airlines keep some seats "open" til the end for last minute business pax. And on top of this, most people know way in advance of high Vacation dates and would take up most of the seats.

Never happen. Too many high revenue days... such as days before T-Day, Christmas, Spring Break from major college towns, etc. Also, busy business days will fill many planes and all airlines keep some seats "open" til the end for last minute business pax. And on top of this, most people know way in advance of high Vacation dates and would take up most of the seats.

In the years before capacity controls, it was not unheard of for a large majority of the passengers on the holiday flight to be traveling on awards. Members loved it, but management didn't.

...to what ftnoob says. And this is just one expression of why I've said, according to this elephant (pig?) whose tail we have hold of, that it's slippery and going to be difficult to figure out on an ongoing basis. First, you earn your points at varying levels per (same) route, have no idea what to aim to accumulate, and then spend them at a moving target as fares bob and weave. Did I already say that it's like Forrest Gump's mother said, "...like a box of chocolates: you never know what you're going to get," when earning?

I suggest that Wunderman's Job 1 (Job 2, if they recommended setting it back) is reconciling this with Southwest's hallmark KISS principle.* Followed by reminding Southwest of the importance of maintaining the (KISS-aided) competitive advantage that Rapid Rewards currently enjoys and contributes to Southwest's profit.**

It seems to me that this is where the position repeated here that "you gotta understand Southwest's side of it" meets that of most of us Customers.


* Which is to say, reminding Southwest of who its market is.
** This is assuming that Wunderman was hired for more than lipstick, as its own encomium in the release says is its corporate mission.

Real world examples:

Wife CP My Awards
10/18/2008 BDL-LAS 187.00 187.00
10/22/2008 LAS-BDL 158.20 158.20
12/11/2008 BDL-LAS 199.00 199.00
12/15/2008 LAS-BDL 199.00 199.00
12/22/2008 BDL-LAS 296.50 0.00 *
1/4/2009 LAS-BDL 215.00 215.00
2/12/2009 BDL-LAS 115.00 0.00 **
2/17/2009 LAS-BDL 99.00 0.00 **
3/28/2009 BDL-LAS 252.50 252.50
4/1/2009 LAS-BDL 99.00 0.00 **
5/19/2009 BDL-LAS 215.00 215.00
5/24/2009 LAS-BDL 199.00 199.00
7/1/2009 BDL-LAS 185.60 185.60
7/7/2009 LAS-BDL 169.60 169.60

All were booked at the opening of the window.

* indicates paid flights, no award available
** indicates paid flights, $99-$125 fares available, not worth spending an award on.

Total value $4500+, combined CP & award tix.

(sorry for the formatting, cut & paste from excel)

Now there's a man who is getting value from his CP! I am impressed. My own return will be around $2500.

This is an example to show when I figure my RR credits are worth $25-30 each to me and people scoff.

It does help a lot to be on a coast and fly long distances. So many flights from MDW are $49-$79 each way.

But I am fully expecting RR 2.0 to be a hose-job.

According to this post by sbm12 on the JetBlue forum (http://www.flyertalk.com/forum/11519056-post32.html), TrueBlue2 (gotta love that assonance) will resemble Virgin's Elevate program and what I expect to see with RR 2.0:



Points are earned on the basis of dollars spent – the more you spend with JetBlue, the more you earn.
Points don't expire as long as you fly JetBlue at least once a year (or have the JetBlue American Express card).
No blackouts! More award seats available for different point levels, depending on when you want to fly
The opportunity to gift points to friends, family or your favorite cause in pre-determined increments.


Other benefits of Jetting the easy TrueBlue way...

Access to our community of savvy travelers with tips to help make the whole experience less painful. From where to find the best pizza in an airport to the best restrooms or the quickest security lines. Get rewarded with extra points for contributing and sharing your opinions.
There will be additional opportunities to earn extra points with new unexpected partners (from travel to retail, entertainment to style).
And surprising, fun, instant win, random opportunities when booking or searching our web site to get even more points.
Next year we are going to set up a system where families can register for Family Pooling accounts to make more use of those points.


Giving out points for posts in a JetBlue equivalent of Southwest's Travel Center is clever and creative. Now all we need is points for posts on FT. @:-)

Spending-based FF programs might just be the next big wave of change.

...families can register for Family Pooling accounts to make more use of those points.


That would be a great enhancement.

Of course, in my case, that is if they will allow me to define "family" so as to include my gf and her son.

I don't really understand why there needs to be a change. Sounds like many of us value WN awards higher than awards on other airlines.

Why is that bad, from WN's perspective? It's ok to offer a product that's better. It's called competitive advantage.

Since I can handle fractions fine, I can deal with half and quarter credit postings - and can easily determine that an RR award is a very valuable thing to me. So WN gets the paid flights they seem to be targetting: short haul non-stops and last minute bookings. And they get my credits from hotels and car rentals, which have to be a profit center for them.

Why, oh why, would they want to make the program any less attractive? So frustrating... The rules of the "game" are well known for everyone involved. I really dislike the "risk" of not knowing how this new program will work.

I don't really understand why there needs to be a change.

I don't like most of the changes, neither....but it seems that I fit the profile of one of the "problems" with the current RR program: I rack up a ton of credits on my $49 intra-CA flights and redeem awards to go to places like PHL and MCO.

I would like to be able to cash in RR credits for Business Select service. I often have to make last minute changes in schedule and I have to choose between B/C boarding with the regular ticket or pay the extra few $ for BS. I am A-lister so if I do not make last minute changes I get A17-A21 for most flights.

I would like to be able to cash in RR credits for Business Select service. I often have to make last minute changes in schedule and I have to choose between B/C boarding with the regular ticket or pay the extra few $ for BS. I am A-lister so if I do not make last minute changes I get A17-A21 for most flights.

Congratulations for being the first to come up with this intriguing idea!

I would like to be able to cash in RR credits for Business Select service. I often have to make last minute changes in schedule and I have to choose between B/C boarding with the regular ticket or pay the extra few $ for BS. I am A-lister so if I do not make last minute changes I get A17-A21 for most flights.

As an A-lister, I've also had the bad fortune of changing my flight and getting pushed to a B/C (strange, but on a recent flight, a colleague who is not an A-lister, was able to get A16 when I was given A17. I can only assume the A16 “freed up” because I didn’t make any changes to my flight).

To remedy this “problem”, I suggest (maybe someone else has already) that Southwest allocate A16-30 to the A-list (as they allocate A1-15 to BS). I assume it is rare there are 15 A-listers on a given flight. The “excess” A16-30 capacity is reserved for A-listers that make last minute changes to flights. On the back-end, the numbering can go up to C-60.

To remedy this “problem”, I suggest (maybe someone else has already) that Southwest allocate A16-30 to the A-list (as they allocate A1-15 to BS). I assume it is rare there are 15 A-listers on a given flight. The “excess” A16-30 capacity is reserved for A-listers that make last minute changes to flights. On the back-end, the numbering can go up to C-60.

Will be a big gaps between A1 and A30. Very rarely do I see more than 2-3 BS pax -- but maybe I am not on high business flights. Do not know # of A listers as no seperate section, but I would guess usually about 7-10.

Although I would not have this benefit now, I can see how it could work. And then board all the BS and the A list group (with a big printout of status on BP) before the regular smucks like me. As long as I am one of the first 75 pax on board, I know I will get an ok seat.

As an A-lister, I've also had the bad fortune of changing my flight and getting pushed to a B/C (strange, but on a recent flight, a colleague who is not an A-lister, was able to get A16 when I was given A17. I can only assume the A16 “freed up” because I didn’t make any changes to my flight).

To remedy this “problem”, I suggest (maybe someone else has already) that Southwest allocate A16-30 to the A-list (as they allocate A1-15 to BS).

Yes....:)

http://www.flyertalk.com/forum/southwest-rapid-rewards/837569-enforcement-boarding-order-consolidated-thread-32.html#post11290121

http://www.flyertalk.com/forum/southwest-rapid-rewards/869719-fly-security-lanes-12.html#post11575449

TrueBlue 2 is approaching reality and still looking like Virgin's Elevate program. (http://www.flyertalk.com/forum/jetblue-trueblue/847618-jetviews-jetblue-online-focus-group-2.html#post11840739)

TrueBlue2 has been officially announced. Read an FTers evaluation here (http://www.wanderingaramean.com/2009/07/some-official-details-on-trueblue-2.html).

It's a revenue-based program similar to RR 2.0 as described in this thread. Purchasers of discount fares will suffer major devaluation. Perhaps JetBlue figures that a loyalty program does not need to provide any significant incentive for discount fare customers. Time will tell if that is correct.

JetBlue's experience with TrueBlue2 will give Southwest some valuable information on whether or not the current RR 2.0 concept needs to be overhauled. Southwest would be wise to delay RR 2.0 until the verdict is in on TrueBlue2, namely whether or not that change has cost JetBlue market share.

JetBlue's experience with TrueBlue2 will give Southwest some valuable information on whether or not the current RR 2.0 concept needs to be overhauled. Southwest would be wise to delay RR 2.0 until the verdict is in on TrueBlue2, namely whether or not that change has cost JetBlue market share.

That's true, but JetBlue has an excellent soft-product with its television, XM service and excellent snacks (and even red-eye flights). I have taken a number of JetBlue flights without getting any FF points (oh the horror!). JetBlue also still allows one free bag. So, while JetBlue is close to Southwest in terms of product so they can monitor the program effect, I think that there will have to be some consideration for the product side as well. I also think JetBlue discounts its fares more than Southwest does (which makes the points based on revenue pretty underwhelming as well).

Rasheed

The only good change about TrueBlue is the no expiration date. I lost right around 50 credits because they expired (credit card got 50 credits, not enough to cash in, and I had no want to do a MR on JetBlue). The rest stinks pretty bad.

But then again, a lot of airlines are catering now to occasional price sensitive fliers rather than providing loyalty perks. It's the way the industry is going so we'll see what happens. Since capacity controls were added to Southwest (and now I can see entire WEEKS on the calendar where there are no award flights are) the program is on par with a lot of majors on availability.

Probably best to read his update.

http://www.wanderingaramean.com/2009/07/trueblue2-details-this-time-without-all.html

TrueBlue2 has been officially announced. Read an FTers evaluation here (http://www.wanderingaramean.com/2009/07/some-official-details-on-trueblue-2.html).

It's a revenue-based program similar to RR 2.0 as described in this thread. Purchasers of discount fares will suffer major devaluation. Perhaps JetBlue figures that a loyalty program does not need to provide any significant incentive for discount fare customers. Time will tell if that is correct.

JetBlue's experience with TrueBlue2 will give Southwest some valuable information on whether or not the current RR 2.0 concept needs to be overhauled. Southwest would be wise to delay RR 2.0 until the verdict is in on TrueBlue2, namely whether or not that change has cost JetBlue market share.

Probably best to read his update.

http://www.wanderingaramean.com/2009/07/trueblue2-details-this-time-without-all.html

Yes, TrueBlue2 has some interesting bonus features that make it competitive at the high end. TB2 is looking more attractive as we learn more. Southwest could learn a lot from this, including how to announce the program in a way that does not cause a bad first impression!

Maybe I'm too much of an optimist, but I'm not sure the changes will be as dramatic as the survey linked early in this thread indicated that many took to be a clear indication of where the program is going.

It is unquestionable that RR needs to move to banked credits as they add codeshares and/or international destinations.

For earning, I don't believe they need to go to a strict revenue based model, what they can do is keep the current credit system that goes down to a quarter credit, and adjust it by length of trip and then offer bonuses for higher fares.

Where I think WN loses significant revenue from the program is from partners. RR Visa is quite successful it would seem, but in talking to many folks who already travel WN I am amazed how many don't know about the generous earning opportunties from hotels and rental cars. WN needs to tout how much better the earning opportunties are from these partners than the other US airlines, a simple chart should do the trick.


WN Legacies
Round-trip flights CHI-LGA for $250 2.0 credits 1,466 miles
2 day car rental for $100 .5 credits 100 miles
2 night hotel stay $250 .5 credits 500 miles
Co-Brand Credit Card Earnings 1.0 credits 850 miles

Total 4.0 credits 2,916 miles
% of Domestic Round-Trip 25.0% 11.7%
So on that theoretical trip a WN traveler has earned 1/4 of a ticket to take his family to SEA, MCO, SFO, or SAN, while the legacy traveler has earned less than 1/8th that amount. Of course this ignores the generous 2x/3x/4x offers on rental cars that are typically available, which even if you apply it to both programs makes WN more advantageous.

The thing is that even if someone wants to fly a legacy carrier for elite benefits or whatever other reason, it still makes a lot of sense for them to take their hotel and car rental credits in WN instead of the legacy carrier because those partners are so much more generous in WN compared to the legacies, and WN still makes money off the partner credits. A 2 day car rental for example earns 1/32nd of a free ticket on WN or 1/250th of a free ticket on a legacy carrier. Do you know how many FT'ers don't realize this? How about the Hilton Double Dip, WN awards 1/32nd of a free ticket on all stays while the legacy carriers you get 1/50th, not quite as dramatic, but still nothing to sneeze at. Of course, if you're staying at Homewood or Hampton you only get 1/250th of a free ticket.

Does anyone know what type of changes to the program that Gary Kelly is referring to below??

He said the most noteworthy new revenue would come through changes to Southwest's "Rapid Rewards" frequent flier program. He offered no details.

"We would much prefer to explore opportunities to provide more service to customers and give them the choice to spend more money with Southwest Airlines," he said. "Our frequent-flier program and Southwest.com both position us well to pursue that strategy."

Kelly said the changes would not happen this year.

Entire Article - http://www.mercurynews.com/business/ci_13567160

Sounds to my uneducated ear like he is suggesting a "pay more for a flight/ticket and get more RR credit."

I got the impression that there were going to be changes to the Rapid Rewards Program. My first thought was that they were going to look at increasing the amount of credits required for travel.

I got the impression that there were going to be changes to the Rapid Rewards Program. My first thought was that they were going to look at increasing the amount of credits required for travel.

Could be. That being said, I don't subscribe much value to RR credits these days, and increasing the number of credits required to earn a free ticket (to places I have little to no interest visiting) would garner not much more than a shrug from me.

Travelers who travel carry-on only aren't swayed too much by a "no fees for bags" sales pitch.

My apologies to all those who have posted, but I am unable to read through the thread while here at work, but still wanted to ask this question.

I have a Rapid Rewards Credit Card. I have never bought a ticket except for on the rare occasion, but I usually spend about $50,000 +/- annually on the card. We enjoy the 3 tickets per year and don't want this to go away, BUT....

In a nutshell, how will / "might" the program change as it pertains to me?

My apologies to all those who have posted, but I am unable to read through the thread while here at work, but still wanted to ask this question.

I have a Rapid Rewards Credit Card. I have never bought a ticket except for on the rare occasion, but I usually spend about $50,000 +/- annually on the card. We enjoy the 3 tickets per year and don't want this to go away, BUT....

In a nutshell, how will / "might" the program change as it pertains to me?

My guess: The RR credit card currently gives you a free ticket for spending $19.2k. RR 2.0 will probably give you about $250 to $300 worth of travel for this amount of spending. If you have been redeeming for $600 tickets (which is possible if you use awards for last-minute must-fly trips), then you lose. If you have been redeeming for short hauls booked far in advance, then you win. In between it's probably a wash.

The real change is in earning through flying. If you pay high fares, RR 2.0 benefits you. If you pay low fares, you lose. RR 2.0 is more fair and less exploitable, making it less interesting to FT'ers.

Does anyone know what type of changes to the program that Gary Kelly is referring to below??

He said the most noteworthy new revenue would come through changes to Southwest's "Rapid Rewards" frequent flier program. He offered no details.

1. RR 2.0 as surveyed gives you points approximately proportional to dollars paid. You have a mild incentive to buy a higher fare. Too bad Southwest merged all those fares into the WGA column...

2. The finer granularity of the new points means that Southwest can partner with websites for online shopping referral revenue. Other partnerships involving low-dollar transactions are also possible.

3. Southwest might be considering selling A-list status as UA does with its E+ annual pass. However this doesn't require any change to RR to implement.

uncertaintraveler seems to have it right, fingering item 1.

1. RR 2.0 as surveyed gives you points approximately proportional to dollars paid. You have a mild incentive to buy a higher fare. Too bad Southwest merged all those fares into the WGA column...

2. The finer granularity of the new points means that Southwest can partner with websites for online shopping referral revenue. Other partnerships involving low-dollar transactions are also possible.

3. Southwest might be considering selling A-list status as UA does with its E+ annual pass. However this doesn't require any change to RR to implement.

uncertaintraveler seems to have it right, fingering item 1.

Some of the current partners are very low value already. The Venetian/Palazzo normal 1/2 credit per stay. If a 2 night stay (and most who go to Vegas stay much longer), you get about $8 -10 worth of credit for a stay costing $280 or much more. True, double credits for now -- still not a great deal. One would think with a new partner there would be more of a deal.

So on that theoretical trip a WN traveler has earned 1/4 of a ticket to take his family to SEA, MCO, SFO, or SAN, while the legacy traveler has earned less than 1/8th that amount. Of course this ignores the generous 2x/3x/4x offers on rental cars that are typically available, which even if you apply it to both programs makes WN more advantageous.

The thing is that even if someone wants to fly a legacy carrier for elite benefits or whatever other reason, it still makes a lot of sense for them to take their hotel and car rental credits in WN instead of the legacy carrier because those partners are so much more generous in WN compared to the legacies, and WN still makes money off the partner credits. A 2 day car rental for example earns 1/32nd of a free ticket on WN or 1/250th of a free ticket on a legacy carrier. Do you know how many FT'ers don't realize this? How about the Hilton Double Dip, WN awards 1/32nd of a free ticket on all stays while the legacy carriers you get 1/50th, not quite as dramatic, but still nothing to sneeze at. Of course, if you're staying at Homewood or Hampton you only get 1/250th of a free ticket.

Your argument makes some assumptions about what everyone values concerning miles/points. Not all legacy pax really care about domestic tickets, especially those who qualify for elite status by flying tons of domestic segments every year. Believe it or not, there are those that only redeem miles for international awards. Many Im sure are thinking about some far off exotic destination.

Yes, WN has an advantage at 1/32 towards an award, but that ISP-MCO award has little value to many. Even though it would take up to three times as long, I would still rather save for a VS Upper Class award at 1/100 (1000 miles per stay Hilton Honors).

The Companion Pass is the most important thing. As far as I am concerned, it's worth more than the 6.25 Rapid Rewards tickets you get for your 100 credits.

As long as they don't mess with that benefit, I will figure out ways to work the system.

As long as they don't mess with that benefit, I will figure out ways to work the system.

^ I couldn't agree more with not changing the CP benefit!

Does anyone know what type of changes to the program that Gary Kelly is referring to below??

He said the most noteworthy new revenue would come through changes to Southwest's "Rapid Rewards" frequent flier program. He offered no details.

"We would much prefer to explore opportunities to provide more service to customers and give them the choice to spend more money with Southwest Airlines," he said. "Our frequent-flier program and Southwest.com both position us well to pursue that strategy."

Kelly said the changes would not happen this year.

Entire Article - http://www.mercurynews.com/business/ci_13567160
When I read Gary's quote above, I wondered if WN is considering some sort of "cash and credits" addition to RR - something like "this one-way award ticket costs n credits or [half of n credits plus some dollar amount]. I don't recall hearing about anything like this from those of you who have seen any of the "RR 2.0 surveys", but those surveys were long enough ago that the plans for RR 2.0 may have changed since then.

When I read Gary's quote above, I wondered if WN is considering some sort of "cash and credits" addition to RR - something like "this one-way award ticket costs n credits or [half of n credits plus some dollar amount]. I don't recall hearing about anything like this from those of you who have seen any of the "RR 2.0 surveys", but those surveys were long enough ago that the plans for RR 2.0 may have changed since then.
Would you be willing to pay an additional cash fee (i.e. $50) to be able to book an award seat on a flight with a high load and/or at a prime time that would otherwise be listed as unavailable for a standard award?

How will freedom awards play into RR 2.0? Does anyone actually use these now? I never have and avoid them at all costs.

How will freedom awards play into RR 2.0? Does anyone actually use these now? I never have and avoid them at all costs.

I used a Freedom award (actually half of one, so I have half remaining until spring) for a trip I had to take at the last minute. My son was along as Companion.

We volunteered for a bump and made $500 in WN credit, so the more expensive Reward ticket ended up not costing us anyway.

I don't think WN will want to go the route of Vigin's Elevate or Jetblue's Trueblue, but instead expand their current credit system.

I predict that WN will offer WGA fares that equal .5 credits with the option of paying a little bit extra kinda like BS or EB check-in for the extra .5 credit. This may also coincide with no expiration dates on both credits earned and credits redeemed as long as you keep your account "active" the same way other legacies do.

They could also change the way credits are used by establising distance based redemption categories. Trans-con RT would be worth 16 credits and intra-state RT flights equal 8 credits. They could posibly institute the one way award system without having to achieve 16 credits. Although the last one would mean that evey credit would became a liability due to the fact that the only "true" liability WN has on the books is when a customer hits the 16 credit mark. We will also see the introduction of partner credits with WestJet announced at the same time 2.0 in announced.

From the perspective from WN they will only roll out a system that increases revenue for them if they give something back to the consumer. Tit for Tat. Just my best guess

http://www.dallasnews.com/sharedcontent/dws/bus/stories/DN-swfliers_19bus.ART.State.Edition1.3cf5c6a.html

Southwest Airlines says revamped frequent-flier program will be unveiled in 2010

Southwest Airlines loyalists will have to wait until next year to see a revamp of the carrier's Rapid Rewards frequent-flier program.

The carrier has been touting an overhaul of Rapid Rewards for a couple of years, part of Southwest's efforts to attract more higher-fare business travelers. Last year, it was targeting 2009 for the unveiling.

But the airline's executives now say that the revamped plan is coming in 2010, not this year.

"Well, actually, I don't know that we've given a date," Southwest chairman, president and chief executive Gary Kelly told reporters last week. "But we won't be rolling out a new frequent-flier program in 2009. It's easily going to be next year."

Southwest executive president Bob Jordan, speaking at an industry conference two weeks ago, was more precise, saying the changes will come "late next year."

"I'm not going to tell you what's in it, but there's going to be a lot of benefits in terms of flexibility," he said.

[...]

The changes to Rapid Rewards is part of the Dallas-based carriers to raise more money from customers without putting fees on services they were already getting, like checked bags.

"We would much prefer to explore opportunities to provide more service to customers and give them the choice to spend more money with Southwest Airlines," Kelly said. "Our frequent-flier program and Southwest.com both position us well to pursue that strategy." [...]

Looks obvious that there will be some big changes or they would not be talking about it. It likely takes at least 9 months to get ready for such changes. I just hope they give ample (3 months) notice and do some sort of grandfathering. Biggest fear (and reason I would look seriously at other carriers) is drop or major change to the CP program.

Two things hit me from the Terry Maxon Blog Article.

"Southwest says that its customers redeemed about 2.8 million award tickets in 2008, equal to about 6.4 percent of the airline's revenue passengers."

Seems like a big percentage to me, so I looked for a comparison to other airlines. Found this chart from 2006 (http://www.webflyer.com/company/press_room/yearly_award_redemption/06membership.php)

And the article has Kelly continuing to talk about needed technology upgrades in the IT area. They are still challenged here.

My guess: The RR credit card currently gives you a free ticket for spending $19.2k. RR 2.0 will probably give you about $250 to $300 worth of travel for this amount of spending.

Why not use Schwab Visa then and just get 2% cash back?

Why not use Schwab Visa then and just get 2% cash back?

Precisely. Dollar-based redemption will make the program's credit card much less attractive than it is now.

Your argument makes some assumptions about what everyone values concerning miles/points. Not all legacy pax really care about domestic tickets, especially those who qualify for elite status by flying tons of domestic segments every year. Believe it or not, there are those that only redeem miles for international awards. Many Im sure are thinking about some far off exotic destination.

The other wrinkle is that many fliers would choose to keep their hotel and car credits in their native form.

So for that Chicago-New York trip, I'd look at it as 2800-ish RDM, 5,000 Marriott points, 2/3rds of a National Free Day, a few hundred Starpoints, etc. The only direct comparison I'd make from a rewards perspective would be whether 2 RR is worth more or less than 2800-ish UA. (It's about even to me...for such a short flight like this I'd probably end up picking the flight based more on my proximity to MDW or ORD than the miles/credits.)

Actually, because it's NYC, I'd probably Priceline the hotel and skip the rental, but that's another topic... :D

FT member gleff recently wrote the following in response to the question of what customers want to see from the airlines regarding loyalty programs. It applies directly to Southwest's decisions on RR 2.0 and especially on how to announce the changes:

Honesty, Transparency, Integrity.

Those sound old fashioned, but I’m serious. Bear with me.

Don’t talk about ‘enhancements’ that are really devaluations. Your customers resent being lied to.

(Oh, and don’t ACTUALLY lie, either. Don’t promise something like the ability to redeem award seats on your partner airlines and then when a partner is offering an award seat don’t refuse to let your customer book it. And don’t tell your customer that the airline “isn’t offering the seat.” And don’t tell the customer that the partner airline doesn’t even fly the route on that day. I’m talking to you, United. 100% seriously.)

Offer a clear value proposition and STICK TO IT.

I disagree with @Chris who says no devaluations. Just be clear about what you are doing and give PLENTY of notice. So that there’s a clear connection between an offer, customer behavior, and a reward. When you offer benefits, customers fly to earn those benefits, and you change the rules of the game just as they’re about to experience those benefits… #FAIL … seriously. So declare by the end of February, 2010, say, what the 2011 program will look like. And stick to it.

In this same light, I agree with @Chris, though, that there is good online social media communication from a couple of companies like Starwood. Engage your customer, honestly and transpanretly. With a strong customer service presence and not a marketing, PR, or spin shop.

Tell the truth. Declare it openly, warts and all. And then deliver on your declarations. And your customers will love you for it.

Today I read an article about leadership. Do you know what is the number one characteristic people look for in a leader? That's right: Honesty. As shown by actions, not platitudes.

More than once, I have recommended to management of FF programs that they announce devaluations frankly, acknowledging that some customers will be adversely affected, explaining the necessity for the move, and providing ample advance notice. Southwest should explain who wins and who loses with RR 2.0 relative to RR, and why the losers are still better off with RR 2.0 than with other airlines' programs.

We're smart enough to figure this out on our own, but setting it all out directly shows respect for our intelligence. More importantly, it will demonstrate that Southwest operates honestly.

nsx, good post.

I know everyone will disagree on ample advance notice of changes. But in my opinion, it depends on the change. If they are going to increase CP from 100 credits to 120, it needs to be way ahead or else give a first year extension of, say 2 months, to reach the new goal.

But to announce the shortening of expiration period for Ticketless Funds, ok to give 2 months notice as long as existing ticketless funds keep same expiration date.

But I think airlines need to hold Partners for some sort of advance notice too. I remember Choice redemption levels changed almost overnight -- without much, if any, notice. Partner actions reflect on the carrier as well.

The simplest thing to do would be to tweak earnings and redemption rather than reboot the system. In particular change redemption levels along the lines of the recent fare sale, i.e. 16 credits for short-haul, 24 credits for a midcon, 32 for a transcon and change earnings so that full fare tix and longer flights earn more RR. People have been conditioned to changes in award charts by other airlines (and hotels) so it would not be a big deal for the non-FT crowd. A longer or rolling expiration would be a nice carrot - the current one screws the non-FF and is a disadvantage compared with much of the competition.

As for CPs, if there are too many it would be easy to tweak the system and just count actual flights - though I wonder how many CP holders have significant traction from credit card and bonus credits - i'd bet not many.

The simplest thing to do would be to tweak earnings and redemption rather than reboot the system. In particular change redemption levels along the lines of the recent fare sale, i.e. 16 credits for short-haul, 24 credits for a midcon, 32 for a transcon and change earnings so that full fare tix and longer flights earn more RR. People have been conditioned to changes in award charts by other airlines (and hotels) so it would not be a big deal for the non-FT crowd. A longer or rolling expiration would be a nice carrot - the current one screws the non-FF and is a disadvantage compared with much of the competition.

I wonder why they feel a need to retool the program at all. As a platinum in some legacy programs (CO and DL), it's hard for me to see how WN is "giving the store away" with its existing program. You need 8 roundtrips in 2 years to earn a capacity controlled freebie (and WN rarely releases award tickets worth more than $300 these days, except if you buy last-minute).

Is this too generous? Especially when you consider there's NOTHING aspirational about Rapid Rewards. A free domestic may be practical to road warriors, but they're not exciting: most road warriors want first class and international rewards. So if you make it even harder to earn these practical-but-not-exciting rewards, you may lose some loyal customers. I wonder if it will be worth the savings.

I wonder why they feel a need to retool the program at all.

<snip>

Especially when you consider there's NOTHING aspirational about Rapid Rewards. You seem to be ovelooking that WN plans on adding international partners, even beyond WestJet and Volaris, so there definitely was a need to "retool" the program to some extent no matter what (though it didn't necessarilly have to be as drastic as what is rumored in this thread) and there will be more aspirational awards available in the future.

I wonder why they feel a need to retool the program at all. As a platinum in some legacy programs (CO and DL), it's hard for me to see how WN is "giving the store away" with its existing program. You need 8 roundtrips in 2 years to earn a capacity controlled freebie (and WN rarely releases award tickets worth more than $300 these days, except if you buy last-minute).

Is this too generous? Especially when you consider there's NOTHING aspirational about Rapid Rewards. A free domestic may be practical to road warriors, but they're not exciting: most road warriors want first class and international rewards. So if you make it even harder to earn these practical-but-not-exciting rewards, you may lose some loyal customers. I wonder if it will be worth the savings.

I only fly about 12 times a year. I get my WN credits to achieve CP from CC spend and rental cars mostly.

And by pounding Choice Privileges and Amtrak/CO when they misprice the conversion.

I'd rather have a couple thousand tax-free a year in free Companion tix for my son than a few hours going somewhere in F. As I understand it, it's somewhat hard to get upgrades on UA/AA out of Chicago anyway.

If WN goes to a system more like UA/AA/CO, etc., since they don't have F or int'l flights at the moment, they will surely have to offer some sort of setup where we can engage in "credit runs," so I'll move in that direction.

But I think airlines need to hold Partners for some sort of advance notice too. I remember Choice redemption levels changed almost overnight -- without much, if any, notice. Partner actions reflect on the carrier as well.

One time, IIRC, overnight without warning and the other time only by the good fortune of someone in the Choice forum stumbling across it with a week's notice and posting the news on FT. Choice lied by saying they'd sent out emails announcing the latter devaluation.

You seem to be ovelooking that WN plans on adding international partners, even beyond WestJet and Volaris, so there definitely was a need to "retool" the program to some extent no matter what (though it didn't necessarilly have to be as drastic as what is rumored in this thread) and there will be more aspirational awards available in the future.

I think it would be wise for them to have some "aspirational" awards -- although it didn't work out too well when they had ATA and Hawaii. ;)

As it stands now, only VERY frequent flying leisure travellers can earn a reward. As I said, you need 8 roundtrips in 2 years (or be a frequent traveller who is anal-retentive about crediting their RR account for car rentals and hotels). I do that, but I don't know many other people in the non-cyber world who do. :) I would think the VAST majority of pax who qualify for WN rewards have at least SOME business travel, where they presumably pay more for their tickets. Which leads me to conclude that WN is not currently giving the store away. If they become less generous, they could easily lose some of their more loyal customers. It will have no impact whatsoever on infrequent flyers.

If they become less generous, they could easily lose some of their more loyal customers. It will have no impact whatsoever on infrequent flyers.

For where we go most often (#1 STL, #2 CHI) WN rules on price alone. They are the major factor in keeping prices down so the legacy carriers don't fleece us. I won't be too happy about any negative changes to RR but I intend to be objective about it. i knew from day 1 that RR 2.0 was coming.

TrueBlue 2 has been launched. Check out initial reactions in this thread (http://www.flyertalk.com/forum/jetblue-trueblue/1015147-true-blue-2-officially-launched.html) and on this page (http://www.wanderingaramean.com/2009/11/trueblue-2-is-alive.html).

TB2 appears to yield about a 10% rebate, give or take 50%. JetBlue's original TrueBlue program had distance-dependent earning, so JetBlue's short-haul customers are not facing a massive devaluation as Southwest's customers will.

Actually, at least three things are happening in the relevant world simultaneously... JetBlue just announced its new program, WestJet just announced that it will announce its new program at the end of the month, and JetBlue and Lufthansa just announced a big partnership. (OT: One less potential Southwest international partner to spill speculation about. :p)

The third one is of particular new interest for this discussion, though. It's going to be interesting to see how JetBlue's new FF program will interface with Lufthansa's Miles & More. (And particularly if one speculates that this partnership is a step in a long range plan of Lufthansa's. Think another JetBlue winter debacle for running even thinner than before. Think the German manifest destiny world view vis a vis Lufthansa Italia and "british" midland. To be specific, what might LH be telling JetBlue re JetBlue's new m.o.?) But then, both initiatives have been in the works for a while, and JetBlue is still moving forward with both. The point is that a note of uncertainty has been introduced re JetBlue's new program.

By the way, when this discussion lines up JetBlue and Southwest for comparison, gauging JetBlue's success attributable to their new m.o. as a bellweather for another new Rapid Rewards model, keep in mind that JetBlue also covers the "aspirational award" category discussed here (to a considerably greater degree, at present) with its flights to the Carribean - and Burlington :p - and now with Lufthansa's world view -- er, coverage.

Would it be taking Messrs. Kelly and Ford at their word (e.g., offering greater flexibility and offering the Customer the "opportunity" to give Southwest more money) to guess that they might be talking about a "miles + $ model"? See Continental's weekly specials for a simple rendering of it. So managed, it certainly would adhere to Southwest's signature KISS m.o., and perhaps there's a way to eke out some more cash without upsetting either us or the Kettles.

Apologies if this has been covered earlier in the thread - but can anyone enlighten me on this: I am charging up a storm to earn my first CP. I think I can squeeze together 100 credits by the end of April. If RR2.0 does not release before then, should I expect to be able to have a CP for 12 months or am in at risk of having the CP revoked just after I earn it? Any insight would be much appreciated.

Apologies if this has been covered earlier in the thread - but can anyone enlighten me on this: I am charging up a storm to earn my first CP. I think I can squeeze together 100 credits by the end of April. If RR2.0 does not release before then, should I expect to be able to have a CP for 12 months or am in at risk of having the CP revoked just after I earn it? Any insight would be much appreciated.I don't think anyone envisions WN will prematurely discontinue the CP for anyone who's already earned it. Also, FYI, your CP will be valid for a minimum of 13 months (renewals are valid for exactly 13 months).

Everyone, please accept my apologies for a major oversight. For 18 months, since post number 7, I have been under the mistaken impression that the Companion Pass was mentioned in that post. However it was not.

I have other copies of the survey from other sources, and they match post number 7, so I didn't read it closely. The other copies mention the Companion Pass as continuing essentially unchanged. I thought everyone here knew, but only I had the information. How embarrassing.

The survey text is as follows:

Companion Pass Requirement & Benefits
Requirements:
Receive 55,000 points through flight and/or Preferred Partner use within a 12-month period.
Benefits:
A Companion Pass would let one person of your choice fly free when traveling with you anytime for an entire year.
Once you reach Companion Pass membership, we would automatically notify you by postcard or e-mail.
Any available seat is accessible to your designated Companion, regardless of whether you paid for your ticket or redeemed a reward.
The Companion Pass could only be used on Southwest-operated service and would not be valid for travel on our airline partners.

At about 5 points per dollar, this would be $11,000 of travel. However the top elite level has 100% bonus, cutting the requirement to $5,500. Credit card points will cut it further, but we don't yet know the credit card earning rate. If it's one point per dollar, plenty of people will line up to spend $55,000 and earn a companion pass. I'm guessing half a point per dollar, making the necessary credit card spend about the same as it is now.

Looks obvious that there will be some big changes or they would not be talking about it. It likely takes at least 9 months to get ready for such changes. I just hope they give ample (3 months) notice and do some sort of grandfathering. Biggest fear (and reason I would look seriously at other carriers) is drop or major change to the CP program.

Remember, with the last revamp of RR, all existing rewards were grandfathered. I would be completely shocked if this weren't the case with this likely devaluation.

FT member gleff recently wrote the following in response to the question of what customers want to see from the airlines regarding loyalty programs. It applies directly to Southwest's decisions on RR 2.0 and especially on how to announce the changes:

Honesty, Transparency, Integrity.




Well said.

Considering this thread is 18 months old, is there anything in the wind recently that RR 2.0 is coming soon?

As I would guess, the announcement would likely need to be made a few months before effective date -- so looks like early summer at the earliest??

My personal guess is fall or winter. Moving to RR 2.0 is not a high priority at Southwest, thank goodness. Yes, there will be adequate notice.

Rapid Rewards 2.0 is the subject of today's blog entry over at Crankyflier.com

Southwest Looks at Revamping Rapid Rewards, Adding Same Day Standby Rules (http://crankyflier.com/2010/01/20/southwest-looks-at-revamping-rapid-rewards-adding-same-day-standby-rules/)

Southwest has been circulating a survey to a bunch of fliers to try to explore all sorts of ways to make changes to their offerings. Fortunately, a thoughtful reader took screenshots of every single page of his survey and sent it over to me. Today and tomorrow, I’ll be taking a peak at what they’re asking about.

Please keep in mind that this was just a survey. We know that a change to Rapid Rewards is coming, but we don’t know that this is it. This is apparently just one of the potential scenarios they’ve been floating around. Have a read for yourself.

[SNIP]

It does sound like Southwest is looking at becoming more like the other guys, huh? I hope they move very carefully here. We’ll talk about that more tomorrow when we look at the bigger pricing picture.

At about 5 points per dollar, this would be $11,000 of travel. However the top elite level has 100% bonus, cutting the requirement to $5,500. Credit card points will cut it further, but we don't yet know the credit card earning rate. If it's one point per dollar, plenty of people will line up to spend $55,000 and earn a companion pass. I'm guessing half a point per dollar, making the necessary credit card spend about the same as it is now.

What is the best guess at the definition of "top elite" in this situation?

And $55K CC spend to earn a CP is close to a no-brainer. Paypal the money to yourself (maybe tricky), your own business, your spouse, or a trusted friend. Pay a little over 2% in fees. $1200 or so out-of-pocket (minus some float) for the free flights and a CP.

Or am I misunderstanding?

...plenty of people will line up to spend $55,000 and earn a companion pass...

???

And $55K CC spend to earn a CP is close to a no-brainer...

For whom?

If you spend $55,000 on a credit card in a year and if you have a companion to regularly take along, then spending it on the card that will earn you a companion pass will make you far more money than spending it on any other card. That makes it a no-brainer.

If you spend $55,000 on a credit card in a year and if you have a companion to regularly take along, then spending it on the card that will earn you a companion pass will make you far more money than spending it on any other card. That makes it a no-brainer.

Right. I should have said if you have a companion to take on maybe 6 or more trips a year, it's a no-brainer.

It's worth paying the Paypal fees on whatever you have to spend to get up to $55K (under 3% fee, sometimes under 2%), if you are essentially sending the money to yourself.

Works best spouse to spouse, I should think.

Apologies if this has been covered earlier in the thread - but can anyone enlighten me on this: I am charging up a storm to earn my first CP. I think I can squeeze together 100 credits by the end of April. If RR2.0 does not release before then, should I expect to be able to have a CP for 12 months or am in at risk of having the CP revoked just after I earn it? Any insight would be much appreciated.

Aim to get the 100th credit on or after the 1st of the month.

Under current rules, a CP issued 4/30/10 will be good until 5/30/11.

One day later it will be good until 6/30/11.

Good for 13 months plus the remainder of the month when issued.

I think the best way to do this is to set your WN credit card statement to "drop" on the 1st or 2nd of the month (while carefully monitoring account to make sure you spend the right amount). Chase happily did this for me on my request.

If you have a Signature WN card, don't forget that you'll get a bonus of 2 credits on the anniversary date, if that will be the same month. Wouldn't want to "waste" credits.

If you spend $55,000 on a credit card in a year and if you have a companion to regularly take along, then spending it on the card that will earn you a companion pass will make you far more money than spending it on any other card. That makes it a no-brainer.

Does this bespeak an assumption that it would be part of Southwest's strategy to steer its frequent flyer program, and itself, more towards the businessperson? This isn't just directed to Lou. In fact, it's not.

...Or am I misunderstanding?

My turn. Swing and a miss, here. (It's Saturday; non-business head on, today.) You guys are talking about laundering the $55,000. Well, I guess that would still take a kind of a business head.

My turn. Swing and a miss, here. (It's Saturday; non-business head on, today.) You guys are talking about laundering the $55,000. Well, I guess that would still take a kind of a business head.

I don't think "laundering" is the right word.

The most straightforward method would be Paypaling money to a spouse, which should have no taxable consequence, though it might look weird.

Paypaling $20K to your brother and having him pay you back by check, minus the fee, might get some undesirable IRS/bank/Homeland Security attention, even though it is perfectly innocent.

Aim to get the 100th credit on or after the 1st of the month.

Under current rules, a CP issued 4/30/10 will be good until 5/30/11.

One day later it will be good until 6/30/11.

Good for 13 months plus the remainder of the month when issued.

I think the best way to do this is to set your WN credit card statement to "drop" on the 1st or 2nd of the month (while carefully monitoring account to make sure you spend the right amount). Chase happily did this for me on my request.

If you have a Signature WN card, don't forget that you'll get a bonus of 2 credits on the anniversary date, if that will be the same month. Wouldn't want to "waste" credits.

Thanks, toomanybooks, for the tip. Can you (or others) elaborate on the "wasted" credits aspect. I gather that if my 100th credit drops on April 1 and I earn additional credits in April, those will not count toward requalifying for a renewal CP. When would my requalification period open?

Thanks, toomanybooks, for the tip. Can you (or others) elaborate on the "wasted" credits aspect. I gather that if my 100th credit drops on April 1 and I earn additional credits in April, those will not count toward requalifying for a renewal CP. When would my requalification period open?

While a detailed explanation of that question is in the Wiki, the basic description would be that if you are sitting at 96 credits on May 1, and your statement posts on May 2 with 10 credits earned, you'll waste the 6 over 100 that day... Your re-qualification period will begin on May 3. (in this example)

There is another way (maybe more?) to waste - qualify for CP on May 2 using my example but instead of 10 you have 4 to just top off the 100 credits needed... then a month later your Hyatt points post from April 2nd, and they don't re-age the timeframe. (Thus, they are wasted...)

HTH!

So does the new website, discussed here:http://www.flyertalk.com/forum/southwest-rapid-rewards/1051189-new-southwest-website-look.html, mean that WN is closer to launching 2.0?

So does the new website, discussed here:http://www.flyertalk.com/forum/southwest-rapid-rewards/1051189-new-southwest-website-look.html, mean that WN is closer to launching 2.0?

I am sure the two are unrelated.

Thanks, toomanybooks, for the tip. Can you (or others) elaborate on the "wasted" credits aspect. I gather that if my 100th credit drops on April 1 and I earn additional credits in April, those will not count toward requalifying for a renewal CP. When would my requalification period open?

Well, it's a bit murky to me how the renewal works if you have credits posting as you describe. I have never devoted the effort to figuring all that out exactly.

WN IMO needs some tier above 100 credits for CP, which ain't hard to reach with CC, hotels, and rental cars. I overtransferred Choice points back a few months when they announced their devaluation (I had a ton as described in my post "13 stays in 13 days") and I'm several months ahead of myself. I will go over 100 early for sure (have 97 now).

Essentially you want to get 100 credits in 12 months, with the last hitting around the end of your CP period, later if you have nothing scheduled in the meantime. Since the CP lasts more than 12 months, you should take some time off getting WN credits immediately after you get the CP.

For example, here's my info:

Existing Companion Pass Begin Date: 03/05/2009
Existing Companion Pass Valid Through: 04/30/2010

So ideally I should have only begun getting more credits on about May 1, 2009 and aimed for the last about 4/29/10. Or even better if I had no flight scheduled in early May would be to start, say, May 5 and get the last one May 4 of the following year, pushing my new CP period out until the end of June. As you see from my example, you get CP validity for 13 months PLUS the remainder of the month in which you qualify. So if you time it right, it's every 14 months almost.

I wasn't paying sufficient attention, so I will waste a few credits (and a month of eligibility) this year.

IMO the best way to ensure timely posting of the last credits to put you over the top is to have the WN Visa card, and ask Chase to set the statement date for the exact day on the month you want. The credits go through quite accurately.

All this will probably be moot when they roll out RR 2.0. I have a feeling we will get ourselves "enhanced" but good.

I meant to post this earlier.

http://www.tnooz.com/2010/02/04/news/southwest-lays-out-timetable-for-tech-upgrades-wi-fi-website-rapid-rewards/

Two other major technology projects in the works, Kelly said, are overhauling the Rapid Rewards program and implementing a new revenue-management system.

A modified frequent flyer program, expected to be in place by the end of 2010, would attact more users for the loyalty program and aims to increase members use of credit cards, Kelly said.

He called the remodeled Rapid Rewards program an “enormous revenue opportunity,” adding the airline won’t see the benefits until 2011.

Thanks, toomanybooks, for the tip. Can you (or others) elaborate on the "wasted" credits aspect. I gather that if my 100th credit drops on April 1 and I earn additional credits in April, those will not count toward requalifying for a renewal CP. When would my requalification period open?Credits can get "wasted" toward CP renewal in two ways:

1) If a large single posting of credits gets you to 100 (say a posting of 10 credits at once and you only need 2 credits), anything over 100 is wasted and will not count towards your next renewal.

2) For those renewing an existing CP, your CP is good for 13 months while you have to earn the 100 credits over a 12 month period, so there is always a period of at least one month where any credits earned do not count towards a CP. Of course this period can be even longer if you earn your CP in less than 12 full months.

this is a way out there question but wanted to ask anyway.

Just wondering about the renewal of both a list and CP. Lets say that my current status of a list will renew in November but I requalify for this in april. and my CP renews dec 31 2010 but I requalify In July. So according to current terms and conditions from what I understand both will just be extended for one year at their current renew period.

If 2.0 hits in November with new rules etc... do you think I would be grandfathered in on current status or would they change to me to the new terms and conditions of the 2.0 upon renewal.

Does this make any sense I hope I'm asking this correctly. The "benefit" of the extention of CP and a list would have been earned prior to WN changing to 2.0 but they would not be issued until after 2.0 takes effect.

as others have noted, changes from WN have *previously* been rolled in fairly to existing customers. When RR went from date-controlled to capacity-controlled, nobody's tickets changed. (though people didn't get a full year from their last-credit-earned to hit 16 credits for finish off their in-process award.)

If you earn enough to see 'CP earned", you're obviously safe. I'd say 99+% that earning 100 (and doing a screen show showing 0 needed, just for good measure) will still get you a renewal. Note that there hasn't even been rumored changes to the CP program, so likely nothing to worry about.

My guess is that when they go to a mileage based system, my guess is they will convert existing 'in process' credits to miles, and CP will just require a huge # of miles.

My guess is that when they go to a mileage based system, my guess is they will convert existing 'in process' credits to miles, and CP will just require a huge # of miles.

Assuming they don't drop the CP entirely, my biggest worry.

My interest would be in extending awards under the current terms. I've just gotten the RR Visa with 32 credits, and may earn other awards that could expire before I want to use them, and I'd be interested in knowing how long I can extend them for $50.

JetBlue's TrueBlue2 is similar to the proposed RR 2.0. It is earning some negative reviews: http://www.flyertalk.com/forum/jetblue-trueblue/1069073-leaving-jetblue-trueblue-value-half-what-old-trueblue-program-proof.html

So what are people thinking of existing awards. Are you saving them for use after the new system comes out or are you going to burn them up before 2.0 comes out?

I would think that WN would grandfather in existing awards and leave the rules the same for them.

I would think that WN would grandfather in existing awards and leave the rules the same for them.

I'll guess the same, except that they'd put an absolute sunset date on existing awards of at least a year out (maybe two or three) so they don't have to keep reissuing expired awards for years on end.

I'd guess there will also be a voluntary conversion option to turn an award into RR2.0 points but that the conversion rate wouldn't appear good to those who use their awards for high value/long haul travel.

My prediction - based solely on the latest Chase bonus offers - is that any program revisions would not be phased in until 3/31/11 (the final day of my promo). I don't see an easy way for WN and Chase to convert the 16 credit double-bonus for spending when someone may be halfway through another $19,200.

My prediction - based solely on the latest Chase bonus offers - is that any program revisions would not be phased in until 3/31/11 (the final day of my promo). I don't see an easy way for WN and Chase to convert the 16 credit double-bonus for spending when someone may be halfway through another $19,200.

The conversion is easy: 1 RR credit become X hundred points.

Customers of JetBlue have another complaint that has not been mentioned here. After the switch to TrueBlue2, the old awards were no longer bookable online. This created a major waste of everyone's time.

I strongly urge Southwest to avoid that mistake by continuing to allow online booking using the old awards until they all expire.

What would be the incentive for using WN if they make these changes on short hauls? I usually use WN for DTW to MDW trips on paid fares. If they change the program to be like the legacies I may as well just use Delta. Delta gives you a lot more benefits if you are a premium members than Southwest does as an A listers, and there are a lot more places you can travel to.

The conversion is easy: 1 RR credit become X hundred points.


That works for converting RR credits, but may not for future points earned with Chase as the earning ratio may change. 16 credits gets you a RR ticket but 19,200 [RR 2.0] points may not if your redemption value is 1 cent per point. So I think they will have to grandfather the old RR up to a certain date.

Not to mention changing the CP rules in the middle of the game may get quite messy, i.e. you have 60 credits, and 40 upcoming flights, but now those flights don't earn 1 credit.

Judging from past experience, I expect WN will be quite professional about the transition as opposed to Amtrak. Well, hopefully better than the way EBCI has been handled. :rolleyes:

What would be the incentive for using WN if they make these changes on short hauls?

Right now RR is head and shoulders above other airlines in rewarding short-haul travelers on cheap fares. The new program is a major cut for these customers, but I'm not sure whether legacies would offer a better deal for these trips. Remember, generous mileage minimums are ancient history, so it's a question of gaining status by trip count.

Elite bonus on a 300-mile flight is not a big difference. RR 2.0 will give an elite points bonus too, for what little that's worth. The real issue is boarding and seating. Both legacy and Southwest will provide priority boarding, but you have some chance of an upgrade on a legacy carrier. Unless they are operating a regional jet, in which case you probably already chose Southwest strictly on that basis.

I see RR 2.0 as taking a step halfway to elimination of free travel awards. It's an admission that Rapid Rewards has not been and is not expected to be a major component of the customer's buying decision. This overhaul of Rapid Rewards has been made possible by systematic devaluation of legacy programs.

When the free travel feature of FF programs becomes irrelevant to buying decisions, that half of all programs will be dropped, leaving only the priority perks. That day may be a decade or two in the future, but it gets closer every year.

When the free travel feature of FF programs becomes irrelevant to buying decisions, that half of all programs will be dropped, leaving only the priority perks. That day may be a decade or two in the future, but it gets closer every year.
Which buying decisions?

There are air travel buying decisions, and then there are other buying decisions.

The average legacy FF program, viewed stand-alone, is typically a profit center, because so many miles are sold to partners. And the only thing you typically get from using partners is redeemable miles (nothing to do with priority perks).

So as long as selling miles to partners is making money, and pretty much the only thing you can do with such miles is free travel, I'm not sure how the free travel feature would become irrelevant.

When the free travel feature of FF programs becomes irrelevant to buying decisions, that half of all programs will be dropped, leaving only the priority perks.

gulp....whatever will we do for family vacays? I wonder if I would give up priority perks for free travel for the 6Strongs?

RR 2.0 will give an elite points bonus too, for what little that's worth.

I see RR 2.0 as taking a step halfway to elimination of free travel awards. It's an admission that Rapid Rewards has not been and is not expected to be a major component of the customer's buying decision. This overhaul of Rapid Rewards has been made possible by systematic devaluation of legacy programs.


I am curious as to how you know what is in RR 2.0. Are you privy to confirmed specific details already?

I thought the whole thing so far was just things like focus groups and customer questionnaires and general talk.

I am curious as to how you know what is in RR 2.0. Are you privy to confirmed specific details already?

I thought the whole thing so far was just things like focus groups and customer questionnaires and general talk.

I don't know any more than you do. I make inferences based on the info in this thread and on the lack of change from one survey to the next. What I hope for is another matter entirely.

I don't know any more than you do. I make inferences based on the info in this thread and on the lack of change from one survey to the next. What I hope for is another matter entirely.

Excuse me, in post 194 you said what RR 2.0 WILL do. Please reread.

"RR 2.0 will give an elite points bonus too, for what little that's worth."

Also: "The new program is a major cut for these customers..."

These are statements of fact, not hope, not supposition, not guesswork, not inference.

Let's all be precise, OK? And nice while we are at it.

Excuse me, in post 194 you said what RR 2.0 WILL do.

OK, I admit I didn't take the time to be precise. It should say "RR 2.0 as surveyed", but I get tired of writing that. If I slip up again, please read it this way even if I wrote it the other way.

Now back to reading all those posts...

For a while now I've thought Chase was going to be the only CC company associated with WN in 2.0, that is, with MR going away.

But check out the last paragraph here:

https://www.starwoodhotels.com/preferredguest/account/starpoints/transfer/airline_partner_list.html

This is new, I believe. SPG tipped their hand? I hope so.

What do you think?

So, you're suggesting that one could pick up points with a SPG-affiliated credit card, and wash them through SPG to one's RR account?

For a while now I've thought Chase was going to be the only CC company associated with WN in 2.0, that is, with MR going away.

But check out the last paragraph here:

https://www.starwoodhotels.com/preferredguest/account/starpoints/transfer/airline_partner_list.html

This is new, I believe. SPG tipped their hand? I hope so.

What do you think?
There are tons of hotel programs that have their own credit cards, which earn hotel points which you can then transfer to WN. They may all have different earning ratios (if your end goal is WN), some of them not so good, but those earning paths do exist.

Also, you're forgetting about Diners Club. There's been no announcement of WN disappearing from there yet. (Of course, Diners is in its own transition, having been sold by Citi and bought by Bank of Montreal, but transfer of operation not yet having been finalized. And given that, btw, you can't apply for a new personal Diners Club card until the transfer is more finalized.)

Since diners club became a master card it's lost a lot of it's value. The one good thing is now it is accepted at a lot more place (some places wouldn't take DC just like they won't take Am EX).

If it was an IDine restaraunt you used to get 20% off (without paying to enroll in the cash back option), then they dropped it 10% then elimianted it.

It used to be only 1,000 points ($1,000 in purchases) for a southwest credit and when the SWA visa went up to 1,200 they raised it to 1,500 points on DC. DC used to also have a promo every fall for a monther where 12,000 points could be converted into a SW ticket (they gave you 16 credits in your account that counted towards CP status and got you a drink coupon book).

They also have elimianted a lot of partners over time. What finally made me cancel was when they eliminated Northwest as a partner and eliminated an airport lounge I used to use a lot from the program.

Aoubt the only real value I see to the card now is if you rent cars a lot with their great rental car protection or if you use an airport a lot that is still part of their airport lounge program.

Also, you're forgetting about Diners Club. There's been no announcement of WN disappearing from there yet. (Of course, Diners is in its own transition, having been sold by Citi and bought by Bank of Montreal, but transfer of operation not yet having been finalized. And given that, btw, you can't apply for a new personal Diners Club card until the transfer is more finalized.)

Since diners club became a master card it's lost a lot of it's value...
Aoubt the only real value I see to the card now is if you rent cars a lot with their great rental car protection or if you use an airport a lot that is still part of their airport lounge program.

One other advantage is if you can never get enough WN credits in a given year to reach CP, you can pile up Diners points over time and dump them into WN whenever you have enough.

So you can have a WN CP sometimes instead of never.

This has also been a possibility with Amex, but they are discontinuing that.

Choice used to be better for this, but not since the latest devaluation.

One other advantage is if you can never get enough WN credits in a given year to reach CP, you can pile up Diners points over time and dump them into WN whenever you have enough.

So you can have a WN CP sometimes instead of never.

This has also been a possibility with Amex, but they are discontinuing that.

Choice used to be better for this, but not since the latest devaluation.

But is Amex really dropping them?

See my post above. The SPG Amex site I linked to in my previous post refers on their redeptions page to Southwest. Though it doesn't allow redemptions yet, I'm thinking that since WN is mentioned there they might have tipped their hand a little early on their 'new' partner? what do you think?

American express rewards won't be available to be used with WN pretty soon. With the SPG AMEX I think what they were referring to was what the SPG poitns could be used for.

You would get SPG points with the AMEX and then convert the SPG points to WN credits. It would be SPG Points you would be converting. I know Hilton and Best Western also allow you to convert their points to WN credits as well.

But is Amex really dropping them?

See my post above. The SPG Amex site I linked to in my previous post refers on their redeptions page to Southwest. Though it doesn't allow redemptions yet, I'm thinking that since WN is mentioned there they might have tipped their hand a little early on their 'new' partner? what do you think?

That was nice being able to convert them when you wanted. Another thing that was nice was if an airline you didn't fly frequently had miles that was about to expire you could xfer 1000 miles over. I had some united miles about to expire and hadn't flown them in a long time and was able to convert 1,000 miles to keep the UAL account active. American used to allow you to exchange their miles for Diners points and I had some american miles about to expire and never flew them anymore and was able to convert them to diners points.

One other advantage is if you can never get enough WN credits in a given year to reach CP, you can pile up Diners points over time and dump them into WN whenever you have enough.

So you can have a WN CP sometimes instead of never.

This has also been a possibility with Amex, but they are discontinuing that.

Choice used to be better for this, but not since the latest devaluation.

When Chase releases the Hyatt credit card later this year (http://www.flyertalk.com/forum/hyatt-gold-passport/1055280-official-hyatt-offer-chase-visa-card.html) that should also form a way to bank points over multiple years and then perform a transfer to WN when desired. But as with any hotel program, one trades the ability to bank points (lifetime dependent upon program) against the risk of devaluation of those points over that lifetime.

When Chase releases the Hyatt credit card later this year (http://www.flyertalk.com/forum/hyatt-gold-passport/1055280-official-hyatt-offer-chase-visa-card.html) that should also form a way to bank points over multiple years and then perform a transfer to WN when desired. But as with any hotel program, one trades the ability to bank points (lifetime dependent upon program) against the risk of devaluation of those points over that lifetime.

Hyatt points are likely to be far more valuable for Hyatt stays than for transfer to RR.

Usually hotel points are more valuable for use with the hotel chain than they are for airline miles. Only time I have found it to be an exception is if it's a chain you don't stay with enough to accumulate enough points for a free stay or if you need a trasnfer into an airline that you haven't used in a while to avoid mile expiration.


Hyatt points are likely to be far more valuable for Hyatt stays than for transfer to RR.

Since diners club became a master card it's lost a lot of it's value. The one good thing is now it is accepted at a lot more place (some places wouldn't take DC just like they won't take Am EX).

If it was an IDine restaraunt you used to get 20% off (without paying to enroll in the cash back option), then they dropped it 10% then elimianted it.

It used to be only 1,000 points ($1,000 in purchases) for a southwest credit and when the SWA visa went up to 1,200 they raised it to 1,500 points on DC. DC used to also have a promo every fall for a monther where 12,000 points could be converted into a SW ticket (they gave you 16 credits in your account that counted towards CP status and got you a drink coupon book).

They also have elimianted a lot of partners over time. What finally made me cancel was when they eliminated Northwest as a partner and eliminated an airport lounge I used to use a lot from the program.

Aoubt the only real value I see to the card now is if you rent cars a lot with their great rental car protection or if you use an airport a lot that is still part of their airport lounge program.
Well, I for one was glad when the last Restaurant Savings program went away, because it was just a flavor of iDine/Rewards Network, and 10% cash back in my book is not as good as 10+ miles/$ (which airline programs with iDine/RN were back then). Of course, those airline programs have been cut back since, so you now only get 10 or more miles sometimes through some bonuses.

Anyway, I've found Diners of value for topping off many times (even topping off Midwest Miles and Amtrak Guest Rewards for transfer to Choice, remember that? :) ). And it's still the best way, for example, to earn Best Western rewards points with a card (as you get about 2.5 points/dollar spent, while the BW card just scaled back to only 1 point on non-BW purchases. (And, in turn, Best Western is, for example, the only hotel you can get on points near several national parks, such as Bryce Canyon, and hotels on cash there can be pretty expensive. But earning BW points through hotel stays is slow, because they have few promos. So Diners Club was the only way could have gotten enough points for several days' stays quickly. And it hardly made a dent in my DC points balance...)

But at any rate, I wasn't naming Diners Club in this thread because I claim it's a good way to earn WN credits at high value, I was simply saying it was a way to earn at some value that was still available (past the AMEX transfer cutoff date).

With BW, if you go for points instead of RR credits, they seem to be the most generous with being able to transfer points to WN credits. You need 5,000 points for a WN credit and I figured at my BW tier it would be $434.78 in charges. If the stay is giong to be under $220 I just chose the WN credit and if it's over that I chose the points figure I can transfer them to WN credits later.

The BW credit card is a joke now. I only used it once for the sign up bonus. With the double points WN's visa gives you for BW being a partner that is probably of more value, and the really funny thing is I figured out using my Hilton Am Ex at Best Western is more rewarding than using the BW credit card there.

There is a BW I love in Chicago and they are great for travel in europe but don't care for them outside of that. I don't find their rewards program rewarding at all. I asked the hotel clerk at the BW in Chicago I stay at if I would get upgraded more now that I am platnium and he said in all honesty with me it didn't matter my status. He said as much as I stay there if I ask for an upgrade and they have it, I will get priority, and the BW's I stay at include breakfast and internet so no real value there either. Only value I am getting is 15% bonus points and if it's a stay where I chose the 1/2 WN credit isn't a value at all.

I wish BW would bring back their 1/2 WN credit for every $100 gift card purchased promo they had last summer.


[QUOTE=sdsearch;13907587]And it's still the best way, for example, to earn Best Western rewards points with a card (as you get about 2.5 points/dollar spent, while the BW card just scaled back to only 1 point on non-BW purchases. (And, in turn, Best Western is, for example, the only hotel you can get on points near several national parks, such as Bryce Canyon, and hotels on cash there can be pretty expensive. But earning BW points through hotel stays is slow, because they have few promos. So Diners Club was the only way could have gotten enough points for several days' stays quickly. And it hardly made a dent in my DC points balance...)

I just received a targeted survey offer, proming 1 rapid reward bonus upon completion. I didn't take screen shots but it dealt most with integrating the Chase credit card programs in to Rapid Rewards. I know survey questions are often far from the final result but thought I'd share:

It asked to choose a favorite name from a bunch of new names for card formerly the Rapid Rewards Visa card.

It described earning 9000 points for a free Southwest flight. $1 = 1 point, southwest $$ earns at a higher rate just like it does now.

It explained that the points could be redeemed for much more than just SWA travel: Gift Cards enabling Hotel stays, even travel to Hawaii.

the 9k point figure seems much more likely to equal a free one-way trip than today's $19,200 in spending to = one free trip.

It asked if we wanted Credit card earnings continue to earn towards companion pass. If we wanted priority boarding, fly-by security status, having credits count towards A-list, or free onboard wi-fi. It asked to rank those benefits, as if to say the final product might only have 1 or 2 from the list.

We're safe from RR 2.0 until 2011. Assuming the schedule doesn't slip further, it will be two years late.

http://www.bizjournals.com/nashville/stories/2010/06/07/daily24.html

Southwest Airlines President, Chairman and CEO Gary Kelly told Nashville business leaders about the $10.6 billion company’s history and plans at a luncheon today hosted by the Nashville Area Chamber of Commerce. [...]

Kelly said 90 percent of management’s efforts are focused on improving customers’ experiences with the airline. To that end, Kelly said Southwest Airlines plans to begin installing Internet connectivity in its planes later this year, is working on adding international flights for the first time and will make unspecified upgrades to its rewards program next year. [...]

We're safe from RR 2.0 until 2011. Assuming the schedule doesn't slip further, it will be two years late.


^ Excellent!

I'd like to see them back burner RR 2.0 in favor of adding more glitz, glamor and gadgets to their website. :D

I'd like to see them back burner RR 2.0 in favor of adding more glitz, glamor and gadgets to their website. :D

:eek:

Although if I had to choose between RR 2.0 and more website "enhancements", I would much prefer the latter...

I got the same survey, might have something to do with business travel, asked a couple of questions relating to paying for tix on a corporate card.

I've been thinking about one particular part of the Rapid Rewards value proposition.

Currently one of my favorite aspects of Rapid Rewards is the ability to throw down an award for last-minute travel, as long as it's not on a Friday or a Sunday and with the recent exception of long-haul summer trips. A trip that I never would have paid $600 for is mine for one standard award.

If Rapid Rewards 2.0 bases its redemption price strictly on cash ticket price, awards will be prohibitively expensive in points less than 7 days before travel. There is an opportunity here for Southwest to be creative, capping the award price on the 7-day advance price except for flights that will, with high probability, sell out.

Essentially I'm asking for a degree of complexity on Southwest's side, invisible to the member, whereby Southwest would implement capacity controls (a fare bucket) for lower-priced awards within 7 days of travel. Beyond 7 days, the cash price would suffice as the basis for redemption price.

Perhaps Southwest already intends to do this, but there is no way to know for sure until RR 2.0 begins operating.

Will the bean counters (and management) want to have you fly on an Award with a $300 value if they can with even medium probabality sell out at $500?

I always thought to satisfy RR members they could open Awartd seats during non business times (ie SAT am) at the 7 day point when they are 80% certain they will not sell out.

Problem with WN policy of no change fees is that some (likely not many) will turn in their $300 ticket and use an Award. This is where legacies could make inroads with Freq flyers as thier $100+ change fees make it too costly to cancel and rebook with Award.

Of course, mgmt may want to keep seats empty to help when other flights are cancelled.

I am always puzzled that a flight with no RR standard availability departs with only 70% load.

Currently one of my favorite aspects of Rapid Rewards is the ability to throw down an award for last-minute travel, as long as it's not on a Friday or a Sunday and with the recent exception of long-haul summer trips. A trip that I never would have paid $600 for is mine for one standard award.The same inventory concept applies on legacy carriers, too. I was looking for a NYC-LAX flight the other day for a day-trip that week. Fares were in the $500-800 range while CO had availability at the 25K level on several of the same flights. As a platinum I wouldn't pay the close-in ticketing fee so it was quite price-competitive to go for the reward versus paying cash.

If Rapid Rewards 2.0 bases its redemption price strictly on cash ticket price, awards will be prohibitively expensive in points less than 7 days before travel. There is an opportunity here for Southwest to be creative, capping the award price on the 7-day advance price except for flights that will, with high probability, sell out.

Essentially I'm asking for a degree of complexity on Southwest's side, invisible to the member, whereby Southwest would implement capacity controls (a fare bucket) for lower-priced awards within 7 days of travel. Beyond 7 days, the cash price would suffice as the basis for redemption price.
This is definitely a level of complexity and not one that I would expect them to implement. If they look at the others in a similar space - JetBlue and Vigrin America - the data would suggest that the points actually become less valuable as the fare increases, not the other way around. Indeed, I'm not so sure that it is compelling for the company to offer rewards that way at all. If the flight isn't going to sell seats at the current price point there is nothing stopping them from simply lowering the prices. Sure, they might have to publish another fare with a different advance purchase requirements or such, but it isn't that difficult for the revenue management folks to set up a scheme to sell the seats at a lower cash price.

Put another way, what is the value to the company to enable such purchases on the cheap? The reason the fares go up is because often the travel isn't discretionary. Folks who have to go will pay the fare and deal with it, either with cash or points. Yeah, I suppose they could do it just to throw the FFers a bone, but I doubt that would happen.

I agree with nsx that I often book last-minute leisure trips using RR vouchers.

Southwest already has a system in place where their reps can "see" the Wanna Get Away fare bucket availability, even if the system stopped selling that fare due to some rule (too close to day of travel, etc). So I doubt it would be hard to implement the same type of system with RR 2.0

If I want to do a last minute weekend trip, and it says $800.00 (or 80k points) that is a huge devaluation from the current system to me, where all trips are the same # of points.

One way they could do things is to set a $ price or point redemption amount for peak and off peak travel to/from each route. BOS-LAS is more $ than PHX-LAS and rightfully so. Nothing stops them from having specials where certain routed need even less points than published to fly.

Since login to RR account is required to purchase RR fares, one way they could stop some $$ 'losses' is to prevent people who previously make a paid reservation use an award for the same flight. RR could just show 'unavailable--you previously booked a reservation as a paid fare on this flight'

Since login to RR account is required to purchase RR fares, one way they could stop some $$ 'losses' is to prevent people who previously make a paid reservation use an award for the same flight. RR could just show 'unavailable--you previously booked a reservation as a paid fare on this flight'

So I'll book the award under a different name. I can still get through the Fly-By lane and Security Kabuki with the revenue BP and ID. Then cancel it at the gate...checking-in for my fake-name award flight a second later (to maintain my A-List position). :D

Since login to RR account is required to purchase RR fares, one way they could stop some $$ 'losses' is to prevent people who previously make a paid reservation use an award for the same flight. RR could just show 'unavailable--you previously booked a reservation as a paid fare on this flight'

That one has "unintended consequences" written all over it. JMO.

I also agree that tying points to fares, especially if done in the TrueBlue style, is terribly unattractive from the customer perspective. Assuming such a plan were to be implemented, however, how about a variation on the proposal by nsx: create a points to fares conversion plan based solely on the Anytime fare. That way the number of points required to redeem an award on a given route is never dependent on how far in advance it is booked. Perfectly simple, unless I am missing something.

There's another side to the award versus paid fare issue, though, and that is the fact that sometimes SWA is virtually never competitive on a given route. The only awards I am likely to consume this year are for Mrs. fnoob to fly on such a route. Dynamics have been changing in recent months, but on the itinerary I booked the other day our choices were:
drive an extra hour to a different airport to take advantage of the AirTran effect and book SWA @$87;
pay SWA $150 to fly from our home airport;
redeem an award.
If not for the fact that the award expires a few weeks after the travel dates, we would drive to the other airport and pay $87. It is already irritating to have to burn an award for a trip that could be had for $87 + some inconvenience. Even with the simplified proposal above, it will be even more irritating to have to use more points to fly from our home airport just because it doesn't benefit from the AirTran effect.

There's another reason for Southwest to have a last minute award that's priced along the lines of a 7 or 14 day advance booking award: because the competition does. All the big airlines have roughly the same redemption cost for close in travel versus far ahead travel (except for the annoying $100 or so 14 or 21 day advance redemption fees). If RR 2.0 award redemption is based strictly on ticket price making short notice trips unreachable, it will make all the other FF programs look that much better. United, by comparison, now lets you redeem 12,500 miles for a (capacity controlled, of course) one way award with no "quick ticketing" fee. Right now, Southwest's awards are still better for domestic travel because there's no change fee, but a future RR 2.0 will be sorely lacking by comparison without such a reasonable short notice redemption option.


I've been thinking about one particular part of the Rapid Rewards value proposition.

Currently one of my favorite aspects of Rapid Rewards is the ability to throw down an award for last-minute travel, as long as it's not on a Friday or a Sunday and with the recent exception of long-haul summer trips. A trip that I never would have paid $600 for is mine for one standard award.

If Rapid Rewards 2.0 bases its redemption price strictly on cash ticket price, awards will be prohibitively expensive in points less than 7 days before travel. There is an opportunity here for Southwest to be creative, capping the award price on the 7-day advance price except for flights that will, with high probability, sell out.

Essentially I'm asking for a degree of complexity on Southwest's side, invisible to the member, whereby Southwest would implement capacity controls (a fare bucket) for lower-priced awards within 7 days of travel. Beyond 7 days, the cash price would suffice as the basis for redemption price.

Perhaps Southwest already intends to do this, but there is no way to know for sure until RR 2.0 begins operating.

A question in the conference call today was about the source of the RR 2.0 revenue kick that is frequently promised. The biggest point of emphasis in the reply was the RR Visa; apparently it significantly under-performs the competition.

GK also says the #1 response to their questions to business travelers as to why they don't fly WN more (or what it would take to get them to fly WN more): we want a better rewards program.

Didn't take notes and wasn't paying 100% attention; the transcript will be a better source of info.

A question in the conference call today was about the source of the RR 2.0 revenue kick that is frequently promised. The biggest point of emphasis in the reply was the RR Visa; apparently it significantly under-performs the competition.

No surprise there. People want free INTERNATIONAL tickets. Credit card points are about aspirational awards. RR 1.0 doesn't offer that since the ATA fiasco with all those canceled award tickets, and neither will RR 2.0.

Let us redeem 50 credits for a summer ticket to Europe and then we'd have something aspirational. Then use of the RR Visa would really take off. But the value has to be there, either in fewer dollars spent per award trip or in much looser capacity controls. Parity with UA or AA will not suffice, because people combine their credit card and flight earnings to reach awards. The flight mile totals tend to be higher on UA and AA because they fly internationally. That means people can earn awards faster if they focus on the airline they use internationally. Therefore Southwest cannot win the credit card competition without providing clearly superior value.

No surprise there. People want free INTERNATIONAL tickets. Credit card points are about aspirational awards. RR 1.0 doesn't offer that since the ATA fiasco with all those canceled award tickets, and neither will RR 2.0.

Let us redeem 50 credits for a summer ticket to Europe and then we'd have something aspirational. Then use of the RR Visa would really take off. But the value has to be there, either in fewer dollars spent per award trip or in much looser capacity controls. Parity with UA or AA will not suffice, because people combine their credit card and flight earnings to reach awards. The flight mile totals tend to be higher on UA and AA because they fly internationally. That means people can earn awards faster if they focus on the airline they use internationally. Therefore Southwest cannot win the credit card competition without providing clearly superior value.

And it didn't help that WN devalued the credit card a few years ago (maybe it has even been more than 5 now) when they increased the spending from $1K to $1,200 for one credit. Especially since they have capacity control on the tickets now. It makes my hilton Am Ex much more attractive with those chances.

Something I would like to see WN do is give you the option of getting A list status with the credit card points instead of a CP. A CP is basically worthless for me but for someone that would use it on a regular basis a CP would be a more expensive benefit to WN than A list status.

I frequently advise folks that the RR Visa makes little sense for most people to hold after the first year. Sign up for the bonus and the anniversary credits, then let it go. So of course it is no surprise that the credit card under performs the competition.

I think it is news, however, that RR 2.0 is projected to be a significant revenue generator specifically through the credit card. To me that says the new program has to involve a credit card that holds out the promise of something quite different than just monthly transfer of Old RR credits/New RR points to your RR account. Yes, specifically, some kind of aspirational award. And I don't think it would be just banking points to allow transfer timing to trigger a CP; many road warriors aren't interested in a CP to do more domestic travel than they already do, or bring a spouse/child on a business trip. They want vacations (part of why putting DEN back on the route map became imperative, IMO).

Here's just one off the top of the head possibility: the new RR Visa could be some blend of the old RR Visa and one of the non-brand-specific travel rewards credit cards that allow banking of points with the issuer. Award dollars could be redeemed for either WN awards or, say, international awards. That would probably be on a specific set of (code-share?) partners, not any old carrier. If it is only Volaris, however, it won't get very many folks excited.

If it's not international, it might be domestic vacation destination-related, like Disney passes and accommodations. To me that would be a huge yawn, but who knows what their research shows appeals to their target market?

So fire up your imaginations and take some new guesses at what could be in the works.

BTW, for whatever it is worth, GK also said the new award program is being designed from the ground up for WN. That lets us hope it won't be much of a copycat of the boring programs like TrueBlue.

BTW, for whatever it is worth, GK also said the new award program is being designed from the ground up for WN. That lets us hope it won't be much of a copycat of the boring programs like TrueBlue.

I have no inside information, but I believe RR 2.0 was designed from the ground up as a clone of Virgin Blue's program. That structure is now used by Virgin America and JetBlue. It has, to put it mildly, not set the frequent flier world on fire.

As to aspirational awards, if it's just a Capital One deal: use your points to buy tickets at 1 penny per dollar of card spend, that's not aspirational: it's boring. We can easily beat a 1% yield using other cards.

I have no inside information, but I believe RR 2.0 was designed from the ground up as a clone of Virgin Blue's program. That structure is now used by Virgin America and JetBlue. It has, to put it mildly, not set the frequent flier world on fire.

Perhaps??? someone at WN is cognizant of that and is forcing another redesign? ( I know - wishful thinking that is unlikely to happen )

Will RR 2.0 be like the recent changes.... no direct notification to its freq. flyers and then the current credits expire in 1 year (or 5 days)?? :confused:

I can just see someone with 85 credits (after 9 months of earning toward a Comp. Pass), seeing that the new program will be changed and they will not be able to get their longed for CP.

As to the VISA... WN pushes harder than others, I think. How many hawkers do we see in the terminals. Improvements need to be made to make it more worthwhile.

A question in the conference call today was about the source of the RR 2.0 revenue kick that is frequently promised. The biggest point of emphasis in the reply was the RR Visa; apparently it significantly under-performs the competition.

GK also says the #1 response to their questions to business travelers as to why they don't fly WN more (or what it would take to get them to fly WN more): we want a better rewards program.

Didn't take notes and wasn't paying 100% attention; the transcript will be a better source of info.

The excellent Dallas News aviation blog has this summary:

• Why Southwest plans major changes to its Rapid Rewards program in 2011: "We don't get our fair share of frequent flyers relative to our seat share if you will. The frequent flyers that we have, we don't get our fair share of their flights. And then of the frequent flyers that we have, we also don't get our fair share of credit cards. ...

"When we've surveyed business customers over the last decade, the single biggest point they've made with us is they want a different frequent flyer program. Single biggest issue. And we believe them, so we've been in design and construction for some time now. ... We're obviously hopeful that we can make it a game changer."

http://aviationblog.dallasnews.com/

Personally, I don't think their "re-engineering" will work. The fundamental problem they have is they have nothing "aspirational" in their business model to offer. No upgrades, no lounges, no int'l flying, etc. It is what it is.

I think they made a mistake by eliminating the "no capacity controls" feature of RR. That was the best thing they had going. They'd do better advertising that than "bags fly free."

A speculation thread that gets stuck in the mode of being convinced an old survey clearly predicts what is coming is, well, boring. ;)

Sometimes a survey is just a survey. :D

Seeking Alpha allows quoting up to 400 words with attribution, so a few excerpts from today's Q&A (http://seekingalpha.com/article/217429-southwest-airlines-co-q2-2010-earnings-call-transcript?part=qanda), emphasis is mine:

The frequent flyers that we have we don't get our fair share of their flights and then of the frequent flyers that we have we also don't get our fair share of credit cards.

there is a very significant opportunity to win more business customers, win more flights from the customers that we get, and then get a whole bunch more Southwest visa credit cards...out there. The combined value of all that is gigantic. The value of just the credit cards, quite frankly, is a very, very large number.

a market share change...may take some time to build. So, I think the easiest penetration, from a revenue generation, will be with the credit card and that's what we really hung our business case on.

Credit to curb for his post back in February which first referenced RR 2.0 aiming to increase credit card usage. There was no discussion of the topic, however.

Dollar-based redemption will make the program's credit card much less attractive than it is now.

If you stand by that view, and accept what GK is saying, maybe dollar-based redemption is not such a sure thing.

I see now that we already have a report of a survey of a possible replacement for the RR Visa:
I just received a targeted survey offer...it dealt most with integrating the Chase credit card programs in to Rapid Rewards...It explained that the points could be redeemed for much more than just SWA travel: Gift Cards enabling Hotel stays, even travel to Hawaii.

I'm pretty sure that I've seen other general travel cards that don't work strictly on the 1% model. It's tempting for the card sponsor to keep payout at no more than 1%, but perhaps the recognition that RR Visa usage is weak will encourage SWA to go above 1%, at least initially. Also, I've seen some cards recently that give you bonuses if you allow your points to accumulate before you redeem them, so that's something else that could change about the way the card works, and contribute to the aspirational aspect of the new program. Most likely no bonus for transfers from Chase to RR, though. Maybe dollar-based redemption will only apply to award dollars banked with Chase and used for non-WN/non-partner awards. Maybe standard awards as we know them will continue to exist, but Freedom Awards will be replaced with dollar-based redemption.

Back to RR itself, however. Which airline has the most successful affinity card? Traditionally it was probably considered AA, but I don't know whether that is still the case. Knowing what we know about what makes other airline affinity cards so much more popular than the RR Visa, what carrots can we guess WN might dangle in front of cardholders' eyes to match that attractiveness?

International code shares and RR 2.0 have both been subject to IT/prioritization delays. Maybe it's a single IT delay, meaning they've long been intended to arrive together. I discovered tonight that was already suggested two years ago:Is it likely that RR 2.0 will occur at the same time as the first international alliance?

GK also said the work on the program itself should be done by year-end; then they have to get the employees trained before a 2011 release. The date has not been "shared" but I'm guessing a target has perhaps been set internally.

(apologies for any repetition of content in the post by iahphx found on the DMN site; I started this well before his post appeared.)

I'm pretty sure that I've seen other general travel cards that don't work strictly on the 1% model. It's tempting for the card sponsor to keep payout at no more than 1%, but perhaps the recognition that RR Visa usage is weak will encourage SWA to go above 1%, at least initially. Also, I've seen some cards recently that give you bonuses if you allow your points to accumulate before you redeem them, so that's something else that could change about the way the card works, and contribute to the aspirational aspect of the new program.

If you could earn $2 worth of WN travel for every $100 of credit card spending, that would be a game changer. $1 won't cut it, and $1.50 probably won't either. BA cards already earn 1.25 miles, and you earn a companion award at $30k.

Could Southwest make money offering a credit card that generous? Maybe.

I hope ftnoob is correct that changes from the survey are being considered. I haven't seen any, but that doesn't mean they don't exist. It just means that they are probably not being opinion surveyed.

A weakness of the surveyed structure is displacement of paying passengers by award redemption. Capacity controls limit that in the current program, but the new program would allow redemption on any flight at a points price proportional to the cash price.

If this feature is changed, or if a highly attractive redemption level for capacity controlled awards is added, customers will decide to redeem for capacity controlled awards and displacement of paying passengers will be reduced. That in turn could allow the credit card earning rate to be boosted to 2%, where the 2% estimate is based on a $250 to $300 cash price for a typical capacity-controlled RT redemption.

I don't know very much about legacies' FF programs, but I have friends who know A LOT, and they tell me in many ways (Aadvantage for example), those other programs are improving.

$2500-3000 spent right now on AA flights to places like SIN to make Exec. Platinum from scratch would get me miles and benefits probably worth well in excess of that figure. I would also creep closer to lifetime Elite.

WN had better step very carefully. I hope its higher-ups are getting some of the sense of the mood around here.

If they downgrade the Companion Pass much in RR 2.0, I am gone almost for sure.

If you could earn $2 worth of WN travel for every $100 of credit card spending, that would be a game changer.

I don't think that's enough, unless there are more perks on top of that.

I already value my RR credits from the WN credit card at about 1.25 - 2.5%, depending if it's spend with a partner, in addition to the $20-25 per credit for the value of the Companion Pass alone (average one Companion RT for my son per month, at $200). $20-25 value on $600-1200 spend is another 1.6 - 4.25%.

So that's already somewhere around 4-5% for me. And I live mid-continent. If I lived on a coast it might be higher because of longer/more expensive average flights.

Since I don't fly international much, I already like the WN Visa and the current RR pretty well. $2 on WN flights for every $100 is a downgrade for me.

I don't know very much about legacies' FF programs, but I have friends who know A LOT, and they tell me in many ways (Aadvantage for example), those other programs are improving.

$2500-3000 spent right now on AA flights to places like SIN to make Exec. Platinum from scratch would get me miles and benefits probably worth well in excess of that figure. I would also creep closer to lifetime Elite.

WN had better step very carefully. I hope its higher-ups are getting some of the sense of the mood around here.

If they downgrade the Companion Pass much in RR 2.0, I am gone almost for sure.

Deltas reserve Am Ex I just learned about is great. DL is getting my business for sure starting 1/1. You get 10K MQM after your first purchase, and each year you spend 30K you get 15,000 MQM and another 15,000 MQM if you spend $60K. I can easilly do that with all my business purchases. That would give me 40K MQM my first year and I will easily be able to get 10K to 35K in miles needed for gold or platnium.

The fee is $450 a year but you get a delta club membership which is worth almost that. Nice thing as well is if your flight is delayed on WN you are stuck sitting in the airport which stinks in an airport like DTW. If you have the delta club membership at least you have a relaxing place with free wifi and drinks and snacks. I had a DTW/LGA flight cancel on me friday due to bad weather. It kept getting pushed back and I had arrived early at the airport and used a day pass. The club was really nice and didn't mind the delays. When it finally cancelled I was able to go to the lounge desk and there were only a couple people in front of me. They got me on a EWR flight the next morning and was put in first class even though I am only blue on DL right now. If that would have been WN with a cancelled flight who knows the hold time or wait time I would have gone through.

If they downgrade the Companion Pass much in RR 2.0, I am gone almost for sure.

Yeah - behind change fees, that would be a huge drive-away point.

The number of CPs has always been relatively low,* as has the number of flights WN estimates will be taken with one,** at least for accounting purposes. However, for a number of people (like me) it's extemely highly valued. It's also a quirky, uniquely Southwest award - whose disappearance would look like another step to a post-Herb legacy-like era.

While it's probably not as useful to many business travelers (as borne by comments on FT and the popularity of the now-discontinued informal exchange program), it also seems to have value for some - at least if you read the "Freedom Story" write-ups in Spirit. It's also a pretty good aspirational award - when I tell people about it, they're absolutely amazed that such a benefit is available, even if they don't fly enough (or fly + maximize partner credits) enough to earn it.

*65,000 on 12/31/09, down 2k from '08
**"The Company estimates that an average of two to three trips will be redeemed per outstanding Companion Pass"
(both from annual report)

Deltas reserve Am Ex I just learned about is great. DL is getting my business for sure starting 1/1.

At the recent Ann Arbor FT DO there was much discussion of recent DL and AA offers. The scorn for WN for not offering anything international was thick; most folks won't even CONSIDER trying for the CP. They fly WN only if they are out of redeemable miles or the alternative legacy fares are crazy high, or sometimes because they can get a reasonable one-way, often to reposition for a MR on a legacy.

Double EQMs on AA and double MQMs on DL out of STL/RDU/PIT/BNA (plus the extra RDMs and elite bonuses) right now are just amazing offers on certain routes (for example to SIN, LIM, China).

Don't forget that on AA for Exec. Plat. you get 8 systemwide upgrades on most (maybe all) fares (economy to business, or business to first), worth quite a bit. One of our experts at the DO always looks to AA above others because of this.

Of course, if you live in a place like ATL, it's hard to rely on AA.

Simply adjusting the credit card earning rate won't do it. To get a high enough ratio to excite us would likely be cost-prohibitive for them.

But the recent trend on airline (and hotel) cards seems to be to to offer perks beyond redeemable miles (or points). A few examples...


The US Airways credit card gets you early boarding, bonus EQMs, club passes.
The Delta credit card lets you redeem your skypesos as cash towards tickets (1cpm), and also offers first checked bag free.
The Marriott card offers 15 qualifying nights (and thus silver status).
AA offers cardholders reduced rate redemptions to a changing list of destinations.


I think WN must follow suit if they want to beef up the credit card side of the business. Some ideas...

Automatic A list for $10K annual spend.
Boarding immediately after A listers for all card holders.
Making credit card earned credits count towards companion pass or A List count.
Reduced rate redemptions on the 2.0 reward chart.

Simply adjusting the credit card earning rate won't do it. To get a high enough ratio to excite us would likely be cost-prohibitive for them.

But the recent trend on airline (and hotel) cards seems to be to to offer perks beyond redeemable miles (or points). A few examples...


The US Airways credit card gets you early boarding, bonus EQMs, club passes.
The Delta credit card lets you redeem your skypesos as cash towards tickets (1cpm), and also offers first checked bag free.
The Marriott card offers 15 qualifying nights (and thus silver status).
AA offers cardholders reduced rate redemptions to a changing list of destinations.


I think WN must follow suit if they want to beef up the credit card side of the business. Some ideas...

Automatic A list for $10K annual spend.
Boarding immediately after A listers for all card holders.
Making credit card earned credits count towards companion pass or A List count.
Reduced rate redemptions on the 2.0 reward chart.


CC credits already count towards comapnion pass but not A-list

I don't know very much about legacies' FF programs, but I have friends who know A LOT, and they tell me in many ways (Aadvantage for example), those other programs are improving.

$2500-3000 spent right now on AA flights to places like SIN to make Exec. Platinum from scratch would get me miles and benefits probably worth well in excess of that figure. I would also creep closer to lifetime Elite.

WN had better step very carefully. I hope its higher-ups are getting some of the sense of the mood around here.

If they downgrade the Companion Pass much in RR 2.0, I am gone almost for sure.

I am gone for sure if they do anything to the Companion Pass. For me, it is aspirational as I take atleast one pleasure trip a month with my wife.

But here's another point. I live in the DFW area and have not been a big fan of AA for sometime now. With the Wright amendment coming to an end in the next couple of years, head to head competition between WN and American was something I thought would be a positive for the consumer. But with the way WN is acting of late I don't think it'll be nearly the positive I thought it would be. Used to, Southwest would have real fare sales. IMHO, they no longer do.

I'm very much interested in revisiting AA again as my love for Southwest is fading.

Simply adjusting the credit card earning rate won't do it. To get a high enough ratio to excite us would likely be cost-prohibitive for them.


I think WN must follow suit if they want to beef up the credit card side of the business. Some ideas...

Automatic A list for $10K annual spend.
Boarding immediately after A listers for all card holders.
Making credit card earned credits count towards companion pass or A List count.
Reduced rate redemptions on the 2.0 reward chart.


Point # 1 would work and easy for them to do. And to keep keep Real A Listers from complaining, just have them be low priority A List. Works for me.

Point # 1 would work and easy for them to do. And to keep keep Real A Listers from complaining, just have them be low priority A List. Works for me.

That would make sense having 2 classes of A listers. I wish Hilton would do that with Diamond. Make the people that actually Earn diamond through stays high priority diamonds for upgrades and those that get it other ways low priority.

No surprise there. People want free INTERNATIONAL tickets. Credit card points are about aspirational awards. RR 1.0 doesn't offer that since the ATA fiasco with all those canceled award tickets, and neither will RR 2.0.


:rolleyes:

Now how long have I been saying that RR is boring and useless for those who want to fly to places other than MCO, and LGB. What FF wants to fly domestic all year only to be rewarded(restricted) with yet another domestic flight.

You guys are just now figuring this out? :p

What FF wants to fly domestic all year only to be rewarded(restricted) with yet another domestic flight.

Those of us who don't have the time to get away for more than a couple days at a shot. ;) It's not worth it (to me, at least) to blow 100K AS miles on a BA-F ticket for a weekend in London.

Here are the conference call Q&A points related to RR 2.0, with my comments:

We want to drive more business travel on Southwest. I think the share shift we are seeing right now is mostly on the consumer side but, prospectively, we'll be growing out Wi-Fi on the fleet. We'll be upgrading our frequent flier program.

At first I thought "How could RR 2.0 be considered an upgrade by the customers?" Then I realized that it might be an upgrade for full-fare customers. When GK says "business travel" he probably really means "full-fare travel".

But when we've surveyed business customers over the last decade the single biggest point they made with us is they want a different frequent flier program. Single biggest issue and, we believe them.

Amazing. Here at FT we are pretty happy with RR the way it is. "Business customers" (full fare customers?) are not. I wonder if they will prefer RR 2.0 after they see it.

So, we have been in design and construction for some time now and looking forward to having that project wrap up this year and then launch next year.

If development is done by the end of the year, an announcement could come then and the new program could start in Summer 2010.

Q: ... whether there was infrastructure impediments or IT impediments to implement in the more sophisticated credit card or rapid rewards program, sooner rather than later.

A1: Yes. It's in full build and development, and we have been working on it for a couple of years but we made great progress and expect to launch with the technology enabled to do that.

A2: It is from scratch my friend and custom built for Southwest, for our unique design, and as Laura just said and I pointed out earlier, that construction is on track and scheduled to end this year. And, then we'll collect ourselves and train all of our Southwest warriors and launch this sometime in 2011, that date has not been shared yet.

Again consistent with a mid-2011 start. The fact that we have not seen a new opinion survey tells me that RR 2.0 is being implemented very much as it was surveyed. There's not enough time left in 2010 for any major change.

FWIW, I plan to re-activate my handful of expired awards in January 2011, which will extend their redemption window into the start of RR 2.0. The new program will likely cut my earning rate by a factor of 4. At that rate, expiring awards will no longer be a problem. :rolleyes:

:rolleyes:

Now how long have I been saying that RR is boring and useless for those who want to fly to places other than MCO, and LGB. What FF wants to fly domestic all year only to be rewarded(restricted) with yet another domestic flight.

You guys are just now figuring this out? :p

So far this year we have flown or booked 6 domestic vacation weekends, 3 on WN & 3 would have been on WN if we hadn't managed to use 150K rapidly devaluating SkyPesos.

:rolleyes: :rolleyes: Not everyone is a reflection of you. :rolleyes: :rolleyes: