Upcoming Southwest devaluation – additional thoughts / speculation

I wrote the other day about an upcoming Southwest devaluation.  Right now the points are worth about (but not exactly) 1.43 cents per point, and as of April 17th, they will be changing to…. well… nobody is quite sure

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. However, there are still many flights which will stay at the current redemption rate. And don’t forget that when fares go on sale, so do the points needed for redeeming for a reward flight on those fares.

Obviously that does not say a whole lot, and the general consensus is that there isn’t a whole lot more to it – there does not appear to be any inclination on the part of Southwest to share any additional information.  Basically, it’s just like what Delta did a few weeks ago when they removed their award charts from the site – whatever “the computer” says the flight costs, that’s what it costs.  Disappointing!

(SEE ALSO: Finding the hidden Delta award charts)

Mommy Points reaches out to Southwest

Mommy Points apparently has a contact at Southwest, so she reached out to him/her, but didn’t get a whole lot more information.

It would be impossible to summarize how the displayed prices to consumers vary between BUR and LAX (or between any two airports for that matter), because each flight’s inventory is individually managed, and a fare filed in BUR may not be the same fare filed in LAX (and vice versa).  Further, both parameters are subject to frequent changes (inventory can change instantly in real time; filed fares can change up to 4 times per day).

In addition, our service offering (number of flights, nonstop routes, connect opportunities) between the two airports may not be comparable. In the same way that it’s often more expensive to book a flight to New York vs. Albuquerque sometimes point redemption will vary based on what I referenced in the statement: destination, time of day, demand, fare class, and other factors. But I can’t reemphasize enough that in many cases, the current redemption rate will remain the same.

Additional speculation on Southwest devaluation

There is a Flyertalk thread on this, and at only 9 pages (at the time of this writing), it is much more manageable than the 250+ page thread on the “Great Dane” United flight sale.  There’s some good speculation / thoughts on this, most of which is probably not worth the (virtual) paper it’s printed on.  There’s some good thoughts (and a hilarious video) in the post and comments of a recent View from the Wing post, as well.

Some of the more interesting speculation:

• Probably the speculation that makes the most sense is that right now Southwest gets a lot of point redemptions on busy flights where they would prefer to have paid fares.  So on those busy fares (by route, day or time of flight or other factors), they will jack up the point redemption rate (to 80, 90 or more points / $1).
• You can already see some of this in the fact that even in the lowest tier (Wanna Get Away) fares, there are 4 fare buckets.  So one thought is that as the price goes up (i.e. more and more people have booked the flight), then in addition to already requiring more points to redeem the flight (Because the price is higher), the points required will be at a higher multiplier
• On the other hand, some people were suggesting that it would be the opposite (probably indicating how “valuable” this kind of speculation is 🙂
• Another thought is that this is in preparation of Southwest working with a partner, so they need a way to manage inventory that is released to its (potential) partner
• Perhaps Southwest is moving towards a model where 1 point = 1 cent (100 points / $1), at least on some flights
• There was suggestion that this is in preparation for service to Hawaii, which will be priced at a higher multiplier

All of this is fun and well, but unless Southwest gives us more information between now and April 17th, we would be best served to expect the worst for this Southwest devaluation.  If you have any planned trips on Southwest (here are my 2015 travel plans), I’d book them sooner rather than later – I’m sure that the redemption price isn’t going to go DOWN!

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