Boraxo

In my view this is borderline fraud as I don't recall any disclosure that the converted funds would immediately be devalued 6%. Time to call my class action lawyer. WN's lawyers have already been shot down in federal court once this month (for failure to provide refunds on cancelled flights) so I am sure there will be a feeding frenzy.

Hmm, let's say you bought $500 worth of tickets. And WN cancelled your flights. But unlike other airlines you were not offered a refund but $500 in TTF that expires next year. And then the airline offers to convert your $500 to RR points that are equivalent to $500 in airfare. Of course you jump on this opportunity because you have no idea when you are going to fly again because at this point in time there is no vaccine and you don't want to risk losing $500 TTF that expires.

Less than 6 months later, your converted TTF points are now worth $470 and even worse WN doesn't even tell you they just stole $30. Of course for many people it is a lot more than $30 down the drain.

For me $30 is not going to break the bank but nobody likes being defrauded.

Loose Cannon

I must disagree as I still get to check two bags up to 50lbs in the hold free of charge on Southwest.

expert7700

Agreed, if it is not a big deal (per Southwest) or wasn't the intent to raise redemption cost during Covid, then un-do the change and reinstate it on 09/22/2022 or whatever the travel fund expiration date was extended to before we converted to points.

If it is not a big deal, I would like to know exactly what total $ accounting writedown was allowed when the points on the books are worth 6% less.

The other poster said we had 6 months to use the funds after the conversion deadline, but I think that was in late December.

Southwest ACTIVELY promoted changing a travel fund that would expire in Sept 22 directly into points that would expire NEVER. Then LESS THAN 4 MONTHS LATER devalued them.

If folks light WN up on social media on this "kick people when they were down" devaluation, or if big news outlets pick this up, it may get reversed.

m907

It's not fraud because the terms and conditions of the program grant them the ability to do whatever they darn well please, I'm sure.

Bad business practice and customer unfriendly, yes. But don't toss around legal terms like fraud lest you devalue the term.

bwallet

I'm sure that this was done for accounting purposes. Points represent a liability on Southwest's books. By devaluing points, they reduce their liabilities and instantly improve their balance sheet.

LegalTender

By any means necessary. Devaluation decreases purchasing power, and the airline’s liability. SWA marketing boss Jonathan Clarkson acknowledges, "Customers have been earning points at similar rates throughout the pandemic, even though air travel has declined."

The hot-air defense is we're ALL profiting:

joshua362

Everybody wins!

Often1

Which specific provision of the terms & conditions did WN violate? Specifics matter.

Putting aside personal feelings and views of the industry, all that matters is whether this is a breach of contract.

The procedural ruling against WN in federal court on a wholly unrelated matter is not only irrelevant but wholly expected and says nothing whatsoever about the merits of that case.

nsx

I posted this on VFTW:No-notice devaluations are the flip side of penalty-free cancellation and redeposit of award tickets. Southwest lets you cancel a trip with no penalty up to 10 minutes before departure.

If any airline offering free redeposit announces a devaluation, customers will make speculative bookings to beat the deadline. Some of those will cost the airline money in lost sales.

I see one avenue for a program to provide notice without promoting as many speculative bookings. Announce a devaluation which will apply only to travel dates X and later. In other words, the award cost is tied to the travel date rather than the booking date. This would require new software.

LegalTender

Southwest saw a tsunami. An unprecedented stint of flying planes filled with customers who aren’t paying for their flights.

ZERO warning beforehand wasn't the unforgiveable sin. Telling loyalty members that it has nothing to do with COVID-19, was.

nsx

Trying to interpret this post. I for one booked a lot of trips in 2020 using points rather than money because I had no way to know when or if my regular travel would resume. I believe that under current accounting rules Southwest recognizes substantial revenue every time a points seat is flown. Not as much as a cash ticket, but at least half as much. A flight full of passengers using points is NOT a zero-revenue flight.

ElmhurstNick

Fortunately I'm down to under 4000 points right now, and do not plan on requalifying for A-List this year even with the reduced qualification segment number, as I working on burning balances with AA, DL, and UA. Southwest is the #4 carrier at RDU and I don't use them for connections.

NoStressHere

Maybe.

I would like to see how an airline can take the "points" I use to fly and buy jet fuel with it. Kinda doubt Exon will take points vs cash. LOL!

nsx

I agree that points redemptions do not show up in cash flow, which is the more crucial metric for 2020 and 2021.

Often1

What are called "devaluations" here are ultimately just ticket price increases. Nobody flags price increases, Rather than focusing on the vagaries of FFP's, just ask yourself what you would do if you knew that you need to fly from A to B next week and are told that you can purchase a ticket for $100 today which will cost $150 tomorrow. Which one would you do.

The focus on accounting is part of the issue, but cash position matters too. As demand picks up, WN needs to generate cash. Seats filled with redemptions do help to wipe liabilities off the books and that is good. But, they do not generate revenue and cash will be king for the economic recovery.

I strongly suspect that fares are headed up over the next 18-24 months and that this is simply part of the Covid recovery fare increase. That doesn't change the impact on passengers, but the overall trend is not limited to WN.