The travel blogosphere is all aflutter today after it was discovered that Southwest had posted the following ominous announcement to its website concerning the pricing of Rapid Rewards award flights (my emphasis):
We created Rapid Rewards because we think you deserve to actually feel rewarded. And, from time to time we must make some updates to our program. Beginning April 17, 2015, the number of Rapid Rewards Points needed to redeem for certain flights will vary based on destination, time, day of travel, demand, fare class, and other factors.
So many questions ...
- Southwest's award prices are already keyed to 1) the price of a comparable revenue ticket, and 2) the fare type. Aren't all the variables referenced in Southwest's announcement already baked into the market price of a ticket?
- Which flights will be affected?
- How much will the prices for "certain" award flights rise?
In response to my query to Southwest's corporate communications team for elaboration, I received the following:
In an effort to stay competitive in the current market conditions and provide the most Customer-friendly redemption policies in the airline industry, Southwest Airlines has slightly increased the number of Rapid Rewards Points needed to redeem flights. The number of points needed will vary based on destination, time of day, demand, fare class, and other factors, though, in many cases, the current redemption rate will remain the same. Rapid Rewards continues to provide its Members with the most flexibility to redeem their points with no minimum point balance requirement to redeem for reward travel, no blackout dates, and no fees for booking close in to your travel date... This truly is primarily a change to the way we calculate the rate that we don't plan to make again.
What that means, in P.R.-speak, is that the company has no further comment at this time. When can Southwest's customers expect a more robust explanation of the new pricing scheme? As we go to press, the company spokesperson is checking.
What We Know
Southwest's cryptic pronouncement leaves much to imagination—too much.
What we know is that prices for at least some Rapid Rewards awards will increase, and that the system for pricing awards will not only be more complex but will be stripped of whatever transparency it currently possesses. The price of an award ticket will no longer be predictable. It will be whatever Southwest says it is.
Last year, Southwest reduced the value of Rapid Rewards points by around 15 percent. This upcoming change to award pricing is certain to further cut into the value of those points. And it will make the program that much more complicated and cumbersome in the process.
Rapid Rewards was once one of the simplest, most straightforward of the airline loyalty programs. It was also, not coincidentally, one of the most popular. What remains of that popularity today will take a significant hit on April 17, when the program moves even further from its roots.
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