New Southwest Pricing

A few days ago my friend Leslie from Trips with Tykes and Disney Deciphered reached out with some things she had noticed with the new Southwest pricing. We knew that they were going even MORE dynamic in the coming months, but I don't think people expected it to happen already. Well, gone were the random Southwest award flight prices pretty much overnight. Now every single flight ends in 500 or 1000. Leslie and I searched through hundreds of Southwest flights to see if we could see any patterns, and I wanted to share some of what we noticed with you. I'll also go over a clarification on their bags policy that has come out since the initial announcement.

Changes To Southwest Rapid Rewards Pricing

It was kind of interesting take a look at all of these flights. Here are some of the things we noticed on the new Southwest pricing after searching hundreds of flights.

Even Number Awards, In 500 Point Chunks

In the past Southwest Rapid Rewards were always worth a tight range like 1.3 cents to 1.5 cents in value. This is when you include the taxes and fees covered by the awards at least. That would fluctuate slightly depending on the route, but it pretty much always fell in that range. That would lead to some random award prices for flights, since it was so closely tied to the cash rate. Think of a flight booking for 6,319 Rapid Rewards etc. That is the first thing Southwest ended with this change over. Now every flight is rounded to the nearest 500 points. Another way Southwest is now just like all of the legacy carriers.

Are They Rolling Out Bucket Fares?

One trend I noticed, at least in Wanna Get Away fares – where my focus was, is that there seemed to be a feeling of fare buckets being implemented. Something like $180-$190 all pricing out at 12,500 Rapid Rewards points. It didn't lock in completely, especially when there were only a few tickets left on a flight, but it did seem to corelate some. Could this be where they are going once basic economy goes live? Maybe. It could also just be a part of the pricing being rounded to the nearest 500 points. That means that we will get better value towards the higher end of these ranges (or buckets).

Hawaii Was Destroyed

Southwest has not been making money on their Hawaii flights like they had hoped and that shows in the new pricing. These routes were pretty much always the low end of the Rapid Rewards value spectrum in our searches. Often coming in at under 1.2 cents per Rapid Rewards points. Getting value for your points to Hawaii seems to be a thing of the past. Use whatever you have left in your account elsewhere for better value.

International Flights Still Have Some Meat On The Bones

On a positive note, we noticed that international flights still showed some promise. This is usually where we found the upper end of the point valuations. It remains to be seen if these are hit in a later update, or if this is by design. If you are sitting on a stash of Rapid Rewards points then this is where I would point your focus.

Point Valuations Vary Widely, But Are Pressured Downward Overall

We saw valuations of the Rapid Rewards points dip down towards 1 cent per point and upwards of 1.7 or 1.8 cents per point. It seemed like Hawaii was often in the 1.1 or 1.2 cents per point range and international flights would fall into the 1.5 or 1.6 cents per point often. Everything else seemed to be around the 1.3 to 1.2 range. The further into the calendar you went the worse it seemed to get too. Some of the better valuations domestically tended to be over the next few months, when the prices were already kind of set.

Overall Conclusion On The Rapid Rewards Program Changes

It is safe to say that they are trying to peg these points at around 1.2 cents per point, which is bottom of the barrel in airline miles – right next to Delta Skymiles. That is without having much international reach or partner airlines to speak of to make up for it. All of that goes along with the worst earning and elite loyalty perks in the business too.

Good News On The Bags Policy

Southwest did clarify some things on their baggage policy. There is a bit of relief on the baggage charge, at least for those who can get free bags still. I know it is weird to say that something that used to be free, and now has a charge, actually has a positive – but it does. They are giving people that have access to free bags coverage for up to 8 passengers on the same reservation. To get access to this perk of free bags for up to 8 additional people you need to have one of the following:

• Business select flight – 2 bags
• A-List Preferred – 2 bags
• A-List – 1 bag
• Credit card holders – 1 bag

Companions of Companion Pass members will need to pay for their bag(s) even if the Companion Pass member has access to free bags. If the passholder has access to free bags then their companion will then be refunded immediately for the charge to their method of payment for it. Dumb, I know. Remember how I said Southwest had the worst tech in the industry…

We still don't know what the charge for bags will be, but expect industry norms at a minimum.

New Southwest Pricing: ToP Thoughts

The new Southwest pricing seems worse, and less predictable, then I had imagined. It looks like a lot of things will fall into certain fare buckets on the redemption side, but that they can slide a bit depending on the popularity of the flight / route. That means you will get the best value for your points at the top end of the fare buckets, especially on flights that are not as full or popular. It also appears that Hawaii will always be deemed in demand by Southwest and that they think of international flights as less than.

While this all still seems kind of murky, what is crystal clear is that your Rapid Rewards points are worth less today than they were a week ago. Likely by 10% – 20% depending on the routing. That is before you even consider how they will be much less flexible in a few months too.

Lesson learned! Burn your Rapid Rewards on international flights if you can before the worst of the changes hit on May 28th. Then don't look back…

Let me know of your thoughts over in the ToP Facebook Group.