Southwest has always been one of the most customer friendly airlines in the US, but last night they did something that most would consider to be the opposite of customer friendly.
They rolled out a devaluation without any advanced notice.
Southwest Rapid Rewards will now be worth about 6% less than what they were before. Unlike the changes in 2018 that only decreased the value of Wanna Get Away fares, this appears to apply to every class of airfare that Southwest offers: Wanna Get Away, Anytime, and Business Select.
Southwest does not utilize an award chart and instead they price the flights based on “dynamic pricing.” This means that the price of an award tracks pretty closely to the cash price of a flight.
That is still going to be the case going forward but the general value that you might get with each point will be dropping from 78 points per dollar to 83 points per dollar.
I said general because the exact value that you get from Southwest redemptions really does change with the price of your ticket. Cheaper tickets can offer you pretty high value such as around 1.7 cents per point while other more expensive tickets may fall around 1.3 cents per point.
Because this devaluation is so minimal, I would still expect to get around those rates on redemptions.
Despite the devaluation, Southwest Rapid Rewards is still a great program with a lot of value to offer. They offer you two free checked bags, make it very easy to rebook awards whenever the prices drop, and the value of the Companion Pass (which can be easily earned with credit cards) is unrivaled.
The devaluation itself is no surprise and we are probably going to see a lot of these occur over the next 12 months.
Many people continued to earn lots of points and miles through the pandemic even though travel had virtually stopped. This means there will be a surplus of points out there and so I would just be prepared for more of these devaluations going forward.
Because it seems like programs are becoming bolder about not providing notice, my advice would be to be very careful about transferring points over to frequent flyer programs until you can quickly book your flights/hotels.
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Daniel Gillaspia is the Founder of UponArriving.com and creator of the credit card app, WalletFlo. He is a former attorney turned full-time credit card rewards/travel expert and has earned and redeemed millions of miles to travel the globe. Since 2014, his content has been featured in major publications such as National Geographic, Smithsonian Magazine, Forbes, CNBC, US News, and Business Insider. Find his full bio here.