Rapid Rewards Enhancements!

Old Nov 7, 07, 10:21 am
  #1  
Company Representative - Southwest Airlines
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Rapid Rewards Enhancements!

Hi guys,
Time to put an end to your speculation on all the enhancements to Rapid Rewards! Gary Kelly is holding a press conference at 11:00 this morning. Here's a link to the webcast: http://www.videonewswire.com/event.asp?id=43960

Just a disclaimer - this is mainly for the media and the questions will be screened, so sorry if we can't take yours.
High on Luv is offline  
Old Nov 7, 07, 10:23 am
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Thanks for sharing! I will be posting notes to this thread for those who can't watch/listen (assuming nothing changes in the next half hour and I am still able to watch/listen).
curbcrusher is offline  
Old Nov 7, 07, 10:59 am
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Time to put an end to your speculation on all the enhancements to Rapid Rewards! You spoke, and we listened. We are excited to introduce the Rapid Rewards A-List and Freedom Awards.

Members who fly 32 one-way flights within 12 months are automatically added to our A-List and will receive reserved boarding privileges for one year. That means we’ll automatically reserve your boarding pass for you, ensuring you get the best available boarding number without having to check in exactly 23:59:59 before your flight. While we can’t guarantee you will get an A (if you all fly together somewhere, for instance), in most cases you will!

We’re also giving you back the freedom to use your Awards any time you want, except for a few blackout dates. You can now convert two Standard Awards to one Freedom Award. The new Award will be available in your account as soon as you complete the transaction!

More information about this and other new changes is available on southwest.com. We hope you’re as excited about all this as we are! We can’t wait for you to try it all out!
High on Luv is offline  
Old Nov 7, 07, 11:07 am
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Originally Posted by High on Luv View Post
We’re also giving you back the freedom to use your Awards any time you want, except for a few blackout dates. You can now convert two Standard Awards to one Freedom Award.
No I don't see that as "giving you back", if they really wanted to give us back the freedom to use our awards any time we wanted like it used to be then they wouldn't charge us double the awards.
yanxfann is offline  
Old Nov 7, 07, 11:08 am
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Both changes are good, especially A-List. I appreciate that it is not a pay-for-A scheme (not to say such a beast isn't still coming).

Freedom Awards are a welcome option. The biggest issue I see is that these rule-busters are still limited by blackout dates. They should be removed to make these truly "free."
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Old Nov 7, 07, 11:09 am
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Call notes...

New radio/TV/print commercials that start tomorrow...

Commercial highlighting new Business Select fares
- Fully refundable
- Extra RR credits
- Free drink

Commercials highlighting open seating, new boarding process

Gary Kelly now speaking

Customer productivity, Customer comfort and Customer choice
New boarding process starts system-wide tomorrow
Gate makeover will be complete at largest airports tomorrow, smaller airports to follow

Tomorrow morning, new presentation, new fare display: business select, business and "wanna get away"
Business Select will be among first to board, extra RR credits and free drink

RR enhancements, starting tomorrow
A-List as High on Luv described
no more racing to check in 24 hours ahead
99% will get As when they fly
32 one-way segments or 16 roundtrips

Freedom Awards as HoL described
blackout dates around Thanksgiving and Christmas

Flight schedule
SFO-LAX svc started Sunday
DEN new destinations
Tomorrow schedule opens to May 9

These changes are just the beginning of changes to the WN product
differentiating its product without changing its low-fare, customer service philosophy

Kevin Krone speaking

fare display
currently 8 fare classes
down to three displayed fare classes, but behind the scenes expanded to 15 fare classes
discount fares into "wanna get away" column
if the business select benefits are important to you, you now have that option
wanna get away shows fare range, customer will apparently be given the option to purchase only the lowest option on that flight
"no reason to show a $59 fare when $49 is available"
(interesting that WN changes its fare matrix shortly after AA changed theirs to mostly match WN - curbcrusher)
business select looks like a roughly 20% premium over business (existing full fare)
example slide shows DAL-AUS, biz select is $124, business is $109
slide shows that biz select can be sold out while business can still be available

southwest shortcut
price points will be listed by day instead of current listing of just fare class

biz select
extra RR credits are based on flight mileage
same day flight changes

A-List

Freedom Awards
you select the specific awards you want to combine into a freedom award

Gary Kelly now speaking
reiterates that this is just the beginning
18 months of effort to get to this day
this is the fist step of the "execution stage"
expect more changes and revenue enhancement opportunities over the next 8 quarters

Q&A:
Boosting fare cap?
We don't have a fare cap anymore

Business Select, are they higher than previously existing fares?
Yes b/c of value add

What's the difference?
Not a fee, it is a fare. Some are as little as $10 more than existing full-fare (these are introductory fares), some as high as $25-30

What percentage of biz select tix per flight?
Start off offering about 10%.

Biz select is a rev mgmt tool?
There may be flights where it makes sense to sell less than 10%. Each flight, each day will be treated individually with regard to biz select availability. So 10% is just a ballpark percentage across the system, I suppose

Expiration date on Freedom Award?
Will take expiration date of earliest expiring award
Can extend both and convert at same time for $50 fee

Companion Pass changing?
Exactly the same as it is today. No change.

How did you come to these changes?
Been talking for a long time, did not want to penalize existing road warrior customers. Hence A-List to reward them and provide incentive to others to fly WN more.

Unintelligible question (has new fare structure been tested)?
Has not been tested. Tomorrow is first time they will be rolled out. Should occur at midnight.

Costs associated with these developments?
These changes are being done within the existing, announced capital budget
Tens of millions of dollars, costs will be amortized
Expecting hundreds of millions of dollars in annual incremental revenue as result of today's changes - expect at least $100M/year
Expects biggest gains from today's changes to be in newer markets where travelers are not as

unintelligble revenue question
revenue management changes coming with tomorrow's schedule extension
fare category changes were done to be more industry consistent
would be daunting to customers to see fifteen fare buckets
new fare matrix shows customers there is a benefit to paying more

Do partner credits count for A-List? How many A-Listers exist today?
Credits do not count. Existing A-List percentage is modest, and will not be disclosed

How to FAs know that someone is a Biz Select customer?
Customer will receive drink coupon along with boarding pass (it will print out with BP)

Sales force efforts?
Galileo distribution is now live
Sales blitz on corporate America

Discounted corporate contracts a possibility?
That may happen, but the discount fares already exist
Kelly says corporations want productivity for employees
OTP may be better than a year ago despite all the news of flight delays - "they're not talking about WN"

Do you expect to generate more biz travel or poach existing?
we want a little bit of both
will go into corporations and ask why they're not using WN and what it would take to get that business

Worried about alienating non-biz travelers by squeezing them out of A?
This has been put together to ensure that doesn't happen
hence limited biz select seats, and A-List being awarded only to true road warriors
boarding priority is not important to all people
some customers say they don't care about having a middle seat, they just want the lowest fare

Concerned about rolling this out during a potential biz travel slowdown? Do you see a slowdown?
These enhancements needed to be made, regardless, will be ready for next generation
Steps have been taken to prepare for slowdown, such as expansion slowdown
More variable scheduling approach may be coming - schedulers are working on this
more frequent optimizations possible
fleet use may also be variable as a result, so finance is working on possible sales and leasing strategies

Is it fair to see you've never offered corp discounts?
Not accurate to say "never", but policy has always been no and that has worked well
It is time to revisit that policy

Competition for biz traveler more intense today?
It is easier to attract leisure traveler for any airline - low fare meets their needs
Far more difficult to meet needs of price insensitive traveler
WN still wants all comers, these changes will just make WN more attractive to price insensitive travelers

Does this mean WN will now have two classes of passengers?
No, all seats are still the same, all customers will be treated the same
this is just another fare class; flights have always been filled with customers flying on different-priced/fare class tickets

Call over

Last edited by curbcrusher; Nov 7, 07 at 12:04 pm
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Old Nov 7, 07, 11:11 am
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Yeah I'm listening to the call, don't see the press release posted yet. I guess they are starting with a bunch of new ads. I am most interesting in 'extra RR credits' for Business Select fares.
pitflyer is offline  
Old Nov 7, 07, 11:17 am
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Do only flights count towards the 32 one-way count, or is it any 32 credits, including car rentals, credit cards, etc. (as it is for CP)?

This is a great program, as opposed to the much talked-about "pay-for-A" method, where there would be some fee to be on the A-list! In this method, you pay by flying a lot, not just an outright fee. Thanks!

Southwest has to be the best airline in the air. Look how they monitor FT to get ideas and to respond to customer's needs. Is anybody doing this over at United? I don't think so!
FCfree is offline  
Old Nov 7, 07, 11:24 am
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Originally Posted by pitflyer View Post
Yeah I'm listening to the call, don't see the press release posted yet. I guess they are starting with a bunch of new ads. I am most interesting in 'extra RR credits' for Business Select fares.
There is a chart posted on southwest.com Click thru the clock onto "Introducing Business Select"
stef is offline  
Old Nov 7, 07, 11:31 am
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Good information up on southwest.com

Highlights:

2007 Blackout Dates
November 21,24,25,26
December 21,22,26,28,29

2008 Blackout Dates
November 25,26,29,30
December 1,24,26,27,28

2-1 Freedom conversion expiration date is the earliest date of the 2 "input" awards. Unless you pay $50, and then it can last a year.

A-list qualification is based on paid flights only.
SWSNA is offline  
Old Nov 7, 07, 11:34 am
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http://www.southwest.com/new/?ref=HP_hero_110707
OPNLguy is offline  
Old Nov 7, 07, 11:41 am
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Kevin just said that approx 10% of the seats will be Business Select fares, but that will vary. Southwest will set the % based on many factors. It will be set on a per-flight basis.
FCfree is offline  
Old Nov 7, 07, 11:44 am
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Looks like "Business Select" is a "pay-for-A" deal to me.
uncertaintraveler is offline  
Old Nov 7, 07, 11:47 am
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Is it now going to be impossible to get an A boarding pass for non "Business Select" passengers? If there are a ton of Business Select folks booked who get an automatic A pass, will there be an A's left?

Do RR credit card credits count toward the 32 in one year to be Business Select? It doesn't look like it to me. I don't fly 16 RTs a year but go over 100 credits annually thanks to the credit card.

Lee
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Old Nov 7, 07, 11:47 am
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Originally Posted by uncertaintraveler View Post
Looks like "Business Select" is a "pay-for-A" deal to me.
Yes, as I listen and think about it, I would have to agree. But, at least there is another alternative (32 one-way flights) too. Fly 32 one-way flights on the "Wanna-get-away" fare and you get on the A-list.
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