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Points prices increase relative to total fare as some taxes become part of base fare

Points prices increase relative to total fare as some taxes become part of base fare

Old Mar 28, 20, 5:25 am
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Points prices increase relative to total fare as some taxes become part of base fare

Booked a $313 Wanna Get Away Southwest fare two days ago for 20,970 points; but when I checked that same fare today it was reduced to $275 but cost same 20,970 points. Same pattern holds with several other fares I checked. While the points to cash formula has varied somewhat, this would appear to be a devaluation.
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Old Mar 28, 20, 6:04 am
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Originally Posted by freebee View Post
Booked a $313 Wanna Get Away Southwest fare two days ago for 20,970 points; but when I checked that same fare today it was reduced to $275 but cost same 20,970 points. Same pattern holds with several other fares I checked. While the points to cash formula has varied somewhat, this would appear to be a devaluation.
Can you provide details?
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Old Mar 28, 20, 6:09 am
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I checked 4 or 5 fares to different places ( I was shocked at how cheap the fares are ) and they were all either 76 or 77 points per dollar. No devaluation there.
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Old Mar 28, 20, 7:11 am
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Originally Posted by freebee View Post
Booked a $313 Wanna Get Away Southwest fare two days ago for 20,970 points; but when I checked that same fare today it was reduced to $275 but cost same 20,970 points. Same pattern holds with several other fares I checked. While the points to cash formula has varied somewhat, this would appear to be a devaluation.
What did WN say when you called to ask?

Sounds like an IT glitch to me. Better to check out the facts first and remember that incompetence usually comes before malice.
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Old Mar 28, 20, 7:14 am
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Iím betting itís just taxes.
Federal excise tax relief ó The Act also provides relief to air carriers from certain federal excise taxes that normally apply to transportation services, such as the taxes and fees on airline passenger tickets, the cost of carrying cargo and the purchase of aviation jet fuel. The excise tax holiday period begins on the date of enactment and ends on January 1, 2021.
http://www.natlawreview.com/article/...ation-industry
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Old Mar 28, 20, 3:16 pm
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Yes, there is a temporary devaluation between 3/28/20 and 12/31/20 because excise taxes on cash fares no longer apply.

Excise taxes, including:

Excise taxes are suspended for tickets purchased between
03/28/2020 and 12/31/2020

  •  
    • 7.5% of base fare for domestic travel within the Continental United States and between the Hawaiian islands; prorated for travel between the Continental United States and Hawaii.
    • Arrival/Departure Tax of $9.50 each way for travel between the Continental United States and Hawaii.
    • U.S. Transportation Tax of $18.90 each way for travel between the Continental United States and Puerto Rico.
    • Federal segment fee of $4.30 that will be imposed on each flight segment. Flight segment is defined as a takeoff and a landing.
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Old Mar 28, 20, 4:13 pm
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THANKS for thread. (other comments removed by poster)

Last edited by NoStressHere; Mar 28, 20 at 5:31 pm
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Old Mar 28, 20, 4:41 pm
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Logically, one has to expect a (sneaky?) devaluation in the near future. When things get back to "normal", they'll value cash paying customers over point redeemers more than ever. Watch for a big devaluation followed by double points promotions to placate the collectors.
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Old Mar 28, 20, 5:19 pm
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Originally Posted by joshua362 View Post
Logically, one has to expect a (sneaky?) devaluation in the near future. When things get back to "normal", they'll value cash paying customers over point redeemers more than ever. Watch for a big devaluation followed by double points promotions to placate the collectors.
I disagree. It's a bad time to tick off customers. Also accounting rules mean that Southwest reports income when you fly on a points ticket.
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Old Mar 28, 20, 5:31 pm
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Originally Posted by NoStressHere View Post
I would hope the original poster would update the title. WN did not devalue points, things just changed (taxes).

And those taxes are what feeds those very long threads about how much a point is worth.!

You can't say the points are worth just as much today as they were yesterday. They're not.

As soon as I reprice the tickets, I get WN funny money back. Try the same thing with points at the same base fare as yesterday and nothing happens.
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Old Mar 28, 20, 5:48 pm
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Absolutely a devaluation in points right now.
Yesterday a fare for BNA - OAK in April was $98 or 5,007 points.
Today that same fare is $84 or 5,694 points.
Seems like poor taste to devalue points at the point in time.
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Old Mar 28, 20, 6:10 pm
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Originally Posted by HighFlyinChar View Post
Absolutely a devaluation in points right now.
Yesterday a fare for BNA - OAK in April was $98 or 5,007 points.
Today that same fare is $84 or 5,694 points.
Seems like poor taste to devalue points at the point in time.
Could you post the base fare for each? Otherwise, what you posted does not, by itself, indicate any devaluation as the points ratio is connected only to base fare (not all-in fare).
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Old Mar 28, 20, 6:41 pm
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On my intra-CA routes, base fare went up (vs this morning) to cover the excise tax holiday. The total cash fare is the same as yesterday, but higher than this morning.
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Old Mar 29, 20, 6:43 am
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I would not call this a devaluation by WN. The federal gov't has removed the taxes from paid tickets.

The "free" tickets did not have those to remove - or at least I do not think they did.

And, those taxes is why is was always a challenge to assign an EXACT point value.

The ratio has changed, but not because WN did anything. The federal gov't did.
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Old Mar 29, 20, 6:59 am
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Originally Posted by NoStressHere View Post
I would not call this a devaluation by WN. The federal gov't has removed the taxes from paid tickets.

The "free" tickets did not have those to remove - or at least I do not think they did.

And, those taxes is why is was always a challenge to assign an EXACT point value.

The ratio has changed, but not because WN did anything. The federal gov't did.
Basically correct. Award tickets are still subject to $5.60 each way TSA taxes, as are revenue fares. The waived taxes are the $4.30 US domestic segment tax and 7.5% US domestic excise tax on revenue tickets (these never applied to award tickets -- of course 7.5% of zero is still zero). Passenger Facility Charges (PFC's), which are $4.50 per departure airport for most airports, have not been waived on revenue fares. However, these also were never applied to award tickets.

The reason that segment taxes and PFC's are not collected on award tickets are due to historical rulings on so called "zero fare" tickets. The TSA tax was implemented in 2001 after these rulings were made and is not subject to them. This is the reason why it is collected on award tickets in addition to revenue fares.

International fares are not subject to $4.30 segment tax and 7.5% excise tax. They have flat departure and arrival taxes (currently $18.90) which have been waived. Customs, immigration, and APHIS surcharges on international fares have not been waived.

Last edited by xliioper; Mar 29, 20 at 7:10 am
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