Using Chase Ultimate Rewards To Book Southwest Tickets at up to 1.8 Cents Per Point
Update: Some offers mentioned below are no longer available. View the current offers here.
I used to fly Southwest frequently during my college days, because they always ran super-cheap fares between Pittsburgh and Philadelphia and I'd get a free roundtrip award to anywhere in the US after 8 of my short, inexpensive flights.
In March of 2011 Rapid Rewards changed to a fixed-value points program, meaning that you now earn points that can be redeemed for any flight instead of earning capacity controlled flights awards. The catch? Each point has a fixed value (up to 1.8 cents when redeemed for Wanna Get Away, 1 cent for Anytime and .8 cents towards Business Select) so no more flying 8 cheap roundtrips and then redeeming for an expensive flight- everything is now pegged to the cost of the fare.
Southwest left the American Express Membership Rewards program in July 2010, but was added as a 1:1 transfer partner of Chase Ultimate rewards on January 5, 2012, and when I did my transfer the other day the points showed up in my account within 3 minutes. (Note: transferred points do not qualify for the Companion Pass, which is one of the best benefits in the airline loyalty program world.)
I generally transfer most of my Chase points to United (business/first class Star Alliance awards) and Hyatt (15,000-22,000 for top tier Park Hyatt free night awards), however, I recently used points to book a flight for a family member and think it made a lot of sense. I booked a $222 one-way flight for 12,000 Chase -> Southwest points and $5. In my scenario, I saved $217 by using 12,000 points, valuing them at 1.8 cents a piece - pretty good for a domestic coach award.
There was a US Airways option that I could have booked using 12,500 Chase -> United miles, but the flight times were horrible and US Airways charges much more for bags, $25 for the first and $35 for the second vs. $0 for up to two free checked bags with Southwest.
For Southwest flyers who redeem for Wanna Get Away fares, that means the current Ink Bold 50,000 point sign-up bonus would equal $900 in Southwest flights and the Chase Sapphire Preferred® Card 40,000 bonus would be $720 - not bad for two cards that have the $95 annual fee waived the first year and certainly better than getting the Chase Southwest Plus or Premier card that currently only offers 25,000 points ($450) and has a $69 annual fee. There are often 50,000-point Southwest deals, so I'd wait until one re-emerges, especially since credit card sign-ups currently count towards Companion Pass qualification.
While a lot of people (myself included) may choose not to fly Southwest because of their fixed-value award program, lack of advanced seat assignments, lack of international routes and no first/business class, the bottom line is that Southwest can make a lot of sense for those looking to fly domestically and check bags. I still think United and Hyatt are the most valuable transfer partners of Ultimate Rewards, but I'm happy to have Southwest as an option- especially since they are one of the only airlines to fly into Islip airport in NY, which is incredibly convenient if you are visiting the Long Island and want to avoid the inevitable NYC summer traffic.