Should I hang on to my awards? worth more with high oil prices?
I have 4 awards that don't expire for a while. I'm deciding whether I should go somewhere this summer, or save them when fares spike in face of high oil prices.
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Quote:
Originally Posted by Kalun47
I have 4 awards that don't expire for a while. I'm deciding whether I should go somewhere this summer, or save them when fares spike in face of high oil prices.
What do people here think?
I'm planning to pay $50 each to extend my fall crop of awards (from last year's promo bonanza) for precisely the reason you cite.
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Quote:
Originally Posted by nsx
I'm planning to pay $50 each to extend my fall crop of awards (from last year's promo bonanza) for precisely the reason you cite.
Ditto. Moreover, I'll pay for near-term flights that I otherwise would have flown free. And I'm doing this with others' miles, as well (and praying that their requirements - and, um, "fuel surcharges" - don't materialize/increase).
Good thoughts and I'm sure you have thought this all through but I'm deathly afraid of unknown capacity controls had have gone the opposite way, burning them quickly.
I recently burned 3 RR ISP-TPA for $500 RT each instead of waiting for future ISP-MCI or PHX trips that would have been in the 600-800 range.
When the November schedule opened, you couldn't touch a spring Florida time fare so I got paranoid.
But I had little trouble securing seats a few days in advance. Some of the flights were fully full and others had 60 px.
I know you guys know what you are doing but don't let it backfire!
I think the idea that saving awards for a rainy day isn't such a bad idea anymore. I wish I could trade them on coupon connections, but don't have 90 posts yet.
I value the award at about $300 roundtrip. It's interesting to consider saving the award for later, but I think Southwest's fuel hedge is still going for another year, so high oil prices may not have near term effort on Southwest's fare (before your award expires).
I will probably keep an eye on the situation, but still use it if I can find a good value trip to use it on.
I believe the answer to the original question is so highly dependent on individual circumstances that there is no one-size-fits-all solution. I've recently discussed this very issue with a friend who, like me, lives on the "third coast." Personally, I have a devil of a time finding ways to get $200 value out of one award ticket. My plans are usually flexible enough that I can get to either coast and most places in between for $79-$99 each way, less when I can snare a DING! I tend to feel I've almost "thrown away" an award if I use it for a $79 (each way) fare. When the personal value of an award is at best $200, it's extraordinarily difficult to justify spending $50 (25% of its value!) to extend it for a year. The times when I don't have much control over when and where I fly (family health emergencies in FLA during Spring Break, for example), there are no award seats available anyway. Or, like my wife's upcoming trip to a hastily-arranged and moving target wedding, I can choose to use an award because SW was asking $164 OW for a flight where the legacies, with much better schedules, were all charging about $99. That is still not a very gratifying use of an award; only the change fee issue and schedule coordination with her sister pushed us over the line toward using (half) an award. (We bought a OW return for her on a legacy so she wouldn't have to get up at 3 AM to catch the only SW flight of the day on the route.)
My friend, OTOH, flies a lot of trips where the timing is largely dictated by the scheduling of (road) sporting events for the local Big University. He and dozens or more fellow local sports nuts are fighting for the same seats when the schedule opens or the time and place of a bowl game are announced. He views his awards as worth a minimum of $300 and has recently concluded that value will be going up quite a bit in the next few years due to fuel costs. So like some here he, too, is leaning toward stockpiling his awards and paying the $50 fee to extend them.
There are so many other factors that go into the analysis that it would take hours to compile a good list! So I'll just close with a couple tips for those whose situation suggests holding/extending is the way to go:
Don't assume the fee will always be $50; you could end up paying more.
Don't pay to extend an award before you must. As explained in the FAQ you can extend an award that is nearly 24 months past original expiration--maybe longer. (You do have to allow some time for the extension to be processed before you can use the reissued award.)
Consider organizing/helping with a group effort to request that SW allow paying the extension fee with ticketless travel funds. Why should that not be allowed??
Another non-fuel related reason to use up your award quickly is the planned overhual of RR in 2009. While any change can go either way, I think that chances for the RR program changing for the less favorable side is greater, since Southwest is now seeking codeshare with other partners and may need to adjust their reward structure to match that of other legacy carriers.
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Quote:
Originally Posted by ckpeter
Another non-fuel related reason to use up your award quickly is the planned overhual of RR in 2009.
Assuming this happens, the old awards could become even more valuable. For example, I could imagine conversion to a points-based program to include automatic (and free) revival of old awards as points equivalent to a mid-level redemption. Presumably you would have 30 days' notice before anything happens so that you'd have a chance to pay the $50 for a standard award if you wanted to.
I wouldn't save them because of fuel. Fuel could EASILY be cheaper next year and fares might not go up (you might note that SoCal real estate is much cheaper this year than last year, and oil prices are even less fundamentally-driven right now). And capacity controls could get even worse, along with a myriad of other unpredictable events.
On the other hand, I wouldn't burn a freebie on a $49 flight either. For most folks, I'd say if the roundtrip is going to cost you more than $250, given the $50 entension penalty, it's worth burning the credits now. YMMV.
Another non-fuel related reason to use up your award quickly is the planned overhaul of RR in 2009. While any change can go either way, I think that chances for the RR program changing for the less favorable side is greater, since Southwest is now seeking codeshare with other partners and may need to adjust their reward structure to match that of other legacy carriers.
Herein lies the very basic problem with all FF programs. The providers have done an outstanding job convincing use that points, miles, awards have some sort of static, comparable bankable value for the future.
But in practice, this is not true, rate and values can be changed unilaterally at any time subject to their one sided whims. I've been through many dramatic devaluations on the hotel side. Its like buying a 5 year CD at 5% and being told the rate is now 2%, you are still locked in for 3 more years and the principle is cut in 1/2 too.
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Quote:
Originally Posted by joshua362
Herein lies the very basic problem with all FF programs. The providers have done an outstanding job convincing use that points, miles, awards have some sort of static, comparable bankable value for the future.
Exactly, they are not "as good as cash", and the only thing keeping any of the airlines from changing the terms is the potential PR-problem they might get into for changing the terms too drastically.
Capacity controls can be killer, as nobody knows exactly how many seats the airline allocates on each flight, so you might have an award travel that you can't use. With less capacity it only stands to reason there will be even fewer free seats. Also the more free tickets floating around the less likely it is for you to redeem one, as you have more people competing for a limited number of seats.
My thinking is to use the tickets, they aren't cash, so no reason to save them for a rainy day. The only exception would be to keep enough miles or tickets to get you out of a bind, or when you absolutely must travel somewhere on short notice. Of course the only problem with this is if the flight is sold out you aren't going to be able to use an award. Cash, on the other hand will buy you a seat on a truly sold out flight, as most airlines will sell you a ticket on an oversold flight, but will not give you a free seat on an oversold flight.
We've also seen 100% inflation on some award tickets. Years ago if you had a Southwest reward ticket, the award coupon was your paper ticket, as long as there was a seat on the plane. You could go to the airport ticket counter with your award and get it exchanged for a ticket on a flight that would leave an hour later. Now with capacity controls you might have to use a Freedom Award which is two standard awards to get a ticket on a flight two months out that used to require only one ticket. Who is to say the "Freedom Award" might soon require 3 tickets? I'm guessing if the legacy carriers started charging 3 times their saver miles to eliminate capacity controls?
On a positive note at least Southwest doesn't chrge you for using the ticket, as say American does. Book an award ticket less than 7 days in advance and you will be paying $100 or more, plus you will have to pay an additional ticketing fee of $15 for calling American to book the ticket. So now your "free" ticket on American has cost you $115. Your free ticket cost you $115 in cash.
Yes award travel seats do have value, but they don't have the same value that a non-restrictive full fare ticket that some people seem to value them. They are more of a rebate from past business. They also don't have any value until you use them. So you may laugh at someone who uses an award ticket for a ticket that they could have purchased for $100, unless you use it for a higher value ticket they have at least received $100 for that piece of paper that you are saving to use later.
If you then pay $50 to extend the award, you are now going to have to get $150 of value just to break even with the person that you laughed at, otherwise you are out $50 cash. It's a little bit of a gamble, and also depends on how many award tickets you get a year. Someone who gets several doesn't value them as highly as someone who gets one every two years. So award tickets are only worth what you think they are worth.
You could go to the airport ticket counter with your award and get it exchanged for a ticket on a flight that would leave an hour later.
Truthfully I don't think it is all that different now, in most cases. I don't have enough data to prove the case, but my general impression is that reward seats do open up on less-than-full planes as the departure date draws near. I believe this particular perceived downside of capacity controls has been overstated.
Truthfully I don't think it is all that different now, in most cases. I don't have enough data to prove the case, but my general impression is that reward seats do open up on less-than-full planes as the departure date draws near. I believe this particular perceived downside of capacity controls has been overstated.
You cant go to the airport and use a free ticket unless there is an open seat for RR even if the flight isnt full.
