nsx

I had thought that airlines had pushed devaluation almost as far as they can go without changing the earning rate on co-branded credit cards. At one point or mile per dollar of purchases, your earnings need to have a value that competes with the 1 to 2 cents you can get from a cash back card such as Barclaycard Arrival.

At a redemption price of 100 points per dollar, you would earn 1 cent of airfare per dollar of purchases. Why would anyone choose that over a cash back card? Inertia. Once the inertia is overcome, those cardholders will never come back to points or miles. Southwest is on dangerous territory here.

Southwest and the other major airlines offer one value proposition for their award tickets: ability to cancel and redeposit much more flexibly than for paid tickets. If that ends, I may switch entirely to cash back cards for my purchases.

ursine1

I suspect Southwest won't be forthcoming with the details regarding the upper limit. While "there are still many flights which will stay at the current redemption rate," I'm sure many more will be much, much more expensive points-wise, most likely in the way nsx has suggested.

I predict a thread here where we post and discuss how high these new factors go.

terpzone

the redemption rate is already too low for me to consider using the branded credit card for anything other than southwest purchases.

synergistic

Ugh, I can't believe they'd put us all in an uproar like this without giving us the actual details of the upcoming changes. I've been vaguely worried about a devaluation as it is, given that I'm about to get CP - but it didn't even occur to me that they'd move away from a fixed points to cost redemption model.

I'm anxious to hear what they're planning, and I'll definitely book as much as I can predict before the change. Suppose I'll try to hang on to my standard awards as long as I can, in case any of my favorite routes are priced out of my budget. Sigh.

darthbimmer

Big on another devaluation and on the maddeningly vague way they're describing it.

tatterdema

If using points along with a CP, new rules are that the cost will be double the points.

Joking....maybe? That's the problem with such a vague release. Possible it is not as bad as our minds make it out to be. I personally liked RR2.0 better than the first one, but the uproar was huge. That of course was before they started stealing my points.

ursine1

I think we have as much detail right now as we will ever have, until the system is implemented and we can actually see the points prices. It won't be something WN can announce or even spell out for that matter; the points redemption rates will vary dynamically, similar to the way WGA fares do.

We'll know the upper limit (possibly, if there is one) and a general idea of how the factors apply (possibly, if there is a discernable one) once we have actual experience with it.

Bye bye transparency.

formeraa

I guess this is what we get when there are only 4 major airlines left. I wish the government had not approved any mergers in the past 10 years. I suspect that fares would be lower and the "perks" would be better than they are today. This is really getting ridiculous -- WN knows they have the most liberal change and baggage policies. So, they are determined to stick it to us in the FF area. I'm not sure that I will be renewing my RR credit card.

Tanic

I'm thinking of switching to Amtrak Guest Rewards and there's not even any train stations near me.

luckypierre

This is a really unfortunate announcement for frequent SWA flyers and heavy branded credit card users. Based on what the airline industry has done in the last 203 years, I am not in the category of those who are attempting to see a silver lining in the announcement.

I have always admired Southwest for their general straightforward business model-avoidance of fees that obscure real ticket prices, etc. This suggestion of dynamic pricing and the obfuscation associated with it is totally inconsistent with such practices. Have a child at a college on one of the coasts who always flies home for Mom's bday and the WGA fare is around $300 so you plan around that number? Forget it about it! It might be $300 or it might be the points equivalent of $600. Hard to say until you step up to the plate.

synergistic

Does anyone know if the footnote "Point differential may apply" to the line "We don’t charge a fee of any kind if you wish to change or cancel your reward flight at any point" is the same verbiage as it has always been? I'm suddenly worried that they will start charging a higher redemption rate for the ability to cancel an award booking.

tatterdema

I think it is the same, meaning if you change to a same day or last minute, the points will be higher.

tatterdema

Bwaa hahahaha. Just posted on facebook:

we definitely appreciate your feedback, and I'm sorry to know that you're so disappointed. From time to time, we must make some updates to our program, but our goal will always be to provide the most flexible, Customer-friendly redemption policies in the airline industry. As you know, the criteria being used to determine the redemption rate for each flight will vary, but http://southwest.com will always show the lowest fares available, and you’ll always be able to redeem for any flight as a benefit of Rapid Rewards. -Daniel

Bolding mine. Of course they will always show the lowest rate. They are the ONLY ones that will show a rate....

My imagination is getting the better of me. I am thinking flights before 6am and after 10pm on Tues, Wed, and Thurs will be at the lowest redemption level.....

ursine1

My reading of that statement is that changing a points flight may result in a new points calculation that could be based on both a new points fare as well as a new points redemption multiplication factor.

Original fare:
$99 x 70 points = 6930

New fare examples:
$99 x 90 points = 8910
$149 x 70 points = 10,430
$149 x 90 points = 13,410

(exclusive of taxes; rates for example only)

MHTBri

So glad I took the Mosaic challenge on JetBlue last year. Now I can give even less of my business to SW after this move!