Southwest Makes Major Changes to Frequent Flyer Program

A big change has been in the works for a while now and now we know when it will happen: March 1, 2011. And it looks interesting- there will definitely be major losers (those who buy cheap fares and redeem for expensive tickets) and big winners- very frequent busienss flyers who will earn more perks and better earning opportunities.

The new program, dubbed Rapid Rewards 2.0, is based on spend and not how many flights you take. Under the current program, which I wrote about here, you earn a free flight for every 8 round-trips or so.

The new system will award 6 points per dollar spent on base fare for Wanna Get Away fares, 10 points per dollar on Anytime and 12 points per dollar on Business Select.

Redeeming will also be different, with no blackout dates. If you want to purchase Wanna Get Away fares, you'll need to spend 60 points per dollar for Wanna Get Away fares (a $100 cheapo fare will cost 6,000 points), 100 points per dollar for Anytime fares (10,000 for a $100 ticket), and 120 points per dollar for Business Select fares (12,000 for a $100 ticket). If a seat is available for sale, it will be available with points at the stated rates.

An enhancement of the program is that points don't expire as long as there is any activity in the account within 24 months. This is an alignment to most major frequent flyer programs. I hate their current "24 month use or lose" policy, where you need to keep track of when you earn miles and make sure you use them within 2 years.

Another thorn in my side of their current program is the inability to redeem for international awards, but the big caveat is that you have the Chase Rapid Rewards Visa. These rewards will cost 100 points per dollar, so a $1,000 coach flight from NYC to London will be about 100,000 points. Not exactly sure how taxes or fuel surcharges will be handled, because points only work towards base fare. Taxes/fees on international tickets can be extreme, so using points for international awards may not make sense. I'll have to wait and see before I make final judgement on that aspect of the program.

Earning on the credit card will change as well. Right now you earn 1 Reward Dollars per dollar spent and 2 per dollar spent on Southwest. 1,200 Reward Dollars = 1 credit, so you get 1 credit per $1,200 in spend. With the new program, you earn 1 point per dollar spent and 2 points per dollar spent on Southwest. In the current system it takes $19,200 in spend to get a roundtrip flight, in the new system $19,200 in spend will get you $320 in Wanna Get Away fares, $190 of Anytime fares and $160 of business select fares.

Southwest is also rolling out a real elite program, which is much more generous than the current program. In addition to qualifying by flights, you can also qualify by Tier Points, which is similar to American and British Airway's programs.

A-list will now require only 25 paid one-way trips rather than 32 or 35,000 TQP within a calendar year. At this level you get all current A-list benefits (priority security and boarding) plus a special phone number for reservations, priority standby, and a 25% bonus on your flight points earnings.

The new level, A-list Preferred, requires 50 paid one-way trips or 70,000 TQP within a calendar year. At this level you get all current A-list benefits plus an extra-special phone number for Reservations, (possibly higher) priority standby, free Wi-Fi (when the aircraft is Wi-Fi capable), and a 100% bonus on your flight points earnings.

The lucrative Companion Pass feature will also stay, but with slightly different qualification requirements. Instead of earning 100 credits in a year, no matter which way, you can now get the pass with 100 paid one-way trips or earn 110,000 points (TQP or otherwise) within a calendar year. 100 credits = $110,000 in credit card spend. You cannot mix flights and credit card spend- it has to be one or the other.

The new revenue based system is similar to JetBlue and Virgin America's programs, but much moregenerous based on my initial research. I absolutely love the free wi-fi benefit with top tier elite status and hope other airlines follow suit, like their main ATL competitor, Delta. There are a ton more details that I don't have time to cover right now (about to hop on a flight to Buenos Aires), but you can review the new program here or read the analysis from the Flyertalk Southwest experts here.

Overall, the new program will benefit very frequent flyers, especially those who have the Southwest credit card and purchase expensive fares. I need time to process, but overall I'm not incredibly disappointed with the program, but then again I'm not a Southwest frequent flyer.

So what say you, Southwest fans?
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