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Update: Southwest further devalued Rapid Rewards points effective January 1, 2024. Flyers now need to redeem 86 Rapid Rewards points per $1 of base fare.
Southwest Airlines just made some unwelcome changes to the airline's Rapid Rewards frequent flyer program. Southwest award flights now require 6% more Rapid Rewards points than before. And unfortunately, this isn't just an error. Southwest has confirmed this devaluation.
Here's what we know about this no-notice Southwest devaluation.
Redeeming Points with Southwest's Rapid Rewards Program
Southwest Airlines' Rapid Rewards frequent flyer program is revenue-based. The majority of U.S. airlines have transitioned to a revenue-based mileage program. However, unlike other airlines, the Rapid Rewards program has used a fixed formula for award redemptions for years.
If you're unfamiliar with this term, a revenue-based frequent flyer program ties earning and redemption rates to the flight price as opposed to the distance of the flight or the region(s) you're flying between.
Before this devaluation, Southwest priced Rapid Rewards award flights based on the following formula:
- Wanna Get Away: 76-78 points per dollar of base fare
- Anytime: 78 points per dollar of base fare
- Business Select: 78 points per dollar of base fare
Now, as a result of this Southwest devaluation, you'll need approximately 6% more points for award travel.
This isn't the first time Southwest Airlines has devalued its Rapid Rewards program. Southwest made similar changes to its Rapid Rewards program in 2018. At the time, Southwest also devalued the value of Rapid Rewards points by about 6%.
Southwest's New Rapid Rewards Award Rate Formula
After this week's devaluation, here's how many points you'll need for Rapid Rewards award flights:
- Wanna Get Away: 81-83 points per dollar of base fare
- Anytime: 83 points per dollar of base fare
- Business Select: 83 points per dollar of base fare
For example, let's take a flight from Atlanta (ATL) to Fort Lauderdale (FLL):
| ATL-FLL Flight Example | Wanna Get Away | Anytime | Business Select |
|---|---|---|---|
| Total Cash Price | $92.98 | $130.98 | $160.98 |
| Base Fare | $73.10 | $108.45 | $136.35 |
| Points Required | 6,068 | 9,002 | 11,318 |
| Points Required per $1 of Base Fare | 83 | 83 | 83 |
| Value of Rapid Rewards points | 1.44 cents | 1.39 cents | 1.37 cents |
The same Wanna Get Away fare previously would have required no more than 5,702 Rapid Rewards points. Now, it costs 6,068 points.
This may not seem like a big increase. However, when revenue-based programs are devalued, the devaluation can be more significant than we initially think.
Devaluations should not be needed when an airline already pegs the value of its points to cash flights through a revenue-based model. Things like fare inflation and market forces will naturally raise or lower the mileage price of award flights. The airline doesn't need to devalue the formula for calculating the award price.
Though this devaluation is said to have happened overnight with no warning, The Points Guy spoke with Southwest's Director of Marketing, Johnathan Clarkson. Clarkson told The Points Guy, “This week’s 6% hike isn’t directly related to the pandemic — there hasn’t been in adjustment in three years, so it could have happened around this time either way.”
The Bottom Line
Whatever the reason for this devaluation may be, it isn't great for the Rapid Rewards program. Now, travelers will need to pay at least 6% more points than they previously needed. Aside from Southwest's Companion Pass tier, I find the Rapid Rewards program to be one of the least lucrative programs offered by any U.S. airline. And this devaluation is further proof of the decreasing value of the Rapid Rewards program.
What do you make of these changes? If you're loyal to Southwest Airlines, do these changes motivate you to consider other frequent flyer programs?
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