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Program Score Card: Southwest Rapid Rewards

by on August 9, 2010 · 7 comments

in Program Score Cards, Southwest

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Update: earn 50,000 bonus points after spending $1,000 in the first 3 months with the Chase Southwest Rapid Rewards Plus Card.

Southwest is an airline that has captured the hearts of millions of flyers looking for a sensible airline that has straight forward fares and rules. However, in appealing to the masses with simple fares, open-boarding and coach-only aircraft, they’ve also alienated some business travelers who cherish elite program benefits such as premium seating, priority boarding and first-class upgrades.

Whether you love or hate Southwest, they post some pretty impressive stats and annually rank very high in customer service polls. In 2009 they were the largest airline in the world in terms of number of passengers carried. They operate over 3,500 flights a day and have posted an annual profit for the last 37 years.

Southwest operates on efficiency- they only fly Boeing 737s and they operate on an extensive point to point network, so you don’t always have to fly through a hub to get to where you want to go. They have a corporate culture of customer friendliness and they are one of the few airlines that don’t charge for the first two checked bags.

Currency= Rapid Reward Credits (Sign up link here- you will get 2 free Rapid Reward credits)

Earning:
Flights: 1 credit per flight: 16 one-ways/ 8 round-trips = a free round-trip flight, which can actually be redeemed as two one-ways. Business Select fares (which offer priority seating, security and beverage) =2 credits per flight (1.25 for flights less than 750 miles).

Credit Cards: Official Rapid Rewards Visa- 16 credit sign-up bonus, apply here.
You can also transfer 10,000 Hilton points for 1 Southwest Credit, so if you signed up for the American Express Hilton cards, you could earn Southwest Credits, but at a much slower pace than the official visa.
Southwest also runs many promotions, especially when launching new cities.

Unique feature: Companion Pass- Accrue 100 credits through any means, whether flight or partner activity, and get a companion pass that allows another person to fly with you on and of your flights- whether paid or award.

Positives-
+ Generally, very good award availability
+ Ability to redeem for one-way awards
+ Free drink coupons given out when you reach an award
+ Many partners, including hotels (Hilton, Marriott, Choice), rental cards and a dining program
+ The companion pass is great for business travelers who like to bring along their partners on company paid trips- free flight to go along with the company paid hotel room. It is also actually valid for 13 months.

Negatives-
- No international awards (only domestic 48 states)
- No first/business class awards
- Awards are capacity controlled. Even Freedom awards (two regular awards) are blocked for 15 days of the year.
- Expiration policy of credits is strict- you have 24 months from the date you earn a credit in order to hit 16 credits, or else that point expires. For the infrequent traveler, points will continuously expire unless 7 more roundtrips are made within two years of the first flight.
- Awards also expire after one year from the date they were earned.
- You cannot directly buy a credit if you are short of an award
- Credits are a relatively large unit of measurement, so its harder to earn in small values. For example a $10 meal through Delta Skymiles Dining gets you 30 miles. You don’t start earning 1/4 Rapid Rewards credits until you hit $100 in dining.

Elite Status a.k.a. the A-List
A-List-
Earn 32 flight credits within a year and you automatically get A-list status.

Positives-
+ Priority boarding after Business Select passengers, usually A boarding zone
+ Priority “Fly By” security lane access at participating airports

Negatives-
- You still board after the Business Select group of up to 15 people, which means the exit rows or your favorite seat could be taken
- Short list of benefits- I think they could waive expiration policies on credits and awards for A-list members or give free drinks/snacks

Overall Summary:
The Rapid Rewards program is perfect for the short haul domestic flyer who values on-time arrivals more than first class upgrades. I find the number of partners and ways to earn credits to be extensive and the Companion Pass program unique and  extremely valuable.

Southwest treats their average customer pretty well, so the Elite program doesn’t need to compensate for much. There is less of a class distinction between elite and non-elite customers, which is why many business travelers shudder at the thought of flying with the masses (picture chaotic scenes of men in business suits having to deal with screaming children and families in coach class all day!). Whether you agree or not with Southwest’s corporate culture- its obviously working for them and I don’t foresee their business model changing anytime soon.

The Rapid Rewards program is great if you are a hardcore domestic flyer and like to redeem domestic awards. It is straight forward and flexible program that gives it’s members lots of ways to accrue credits. They are going to announce a 2.0 version of the program that will include an international travel component, so I’ll certainly update you all when those details are confirmed.

Overall scores:

Points: A-
Elite Program: B-
Overall Grade: B+

First steps for Southwest to get the overall score moving towards an A:
1) Adjust credit expiration policy to be more flexible, so any activity on the account extends the credits. It’s too confusing to track when you got each individual credit.
2) Get rid of capacity controlled awards
3) Increase the number of partners to allow for international/ Hawaii travel
4) Increase the amount of Fly By security zones
5) Give A-list members, or a create a higher elite level, the opportunity to earn points at a greater level or perhaps have no expiration on credits/awards for elite members or give them free drinks in-flight

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