Hoping to appeal more to frequent business travelers, Southwest Airlines announced a major re-do of Rapid Rewards, its frequent flyer program, today. The program is switching from a flight-credit based program to a points-based program. Points earned are based on how much money you spend.
The new program is remarkably similar to that of San Francisco-based Virgin America and it’s part of a trend among all airlines to programs that are more based on how much members spend than how far they fly. Southwest’s new program also picked up a unique component from AirTran, which will allow members to “buy” tickets on other airlines to destinations not served by Southwest.
Here are some highlights from a news conference I attended yesterday where Southwest CEO Gary Kelly and program mastermind Ryan Green rolled out the new program:
>EFFECTIVE DATE: New program goes into effect on March 1, 2011.
>EARNING: Members earn points based on fare paid. For example, on a deeply discounted $100 “Wanna Get Away” fare between say, SFO and Denver, you’ll earn 600 points– six points per dollar. If you choose to pay the $200 “Anytime” fare, you’ll earn 2000 points– 10 points per dollar. And if you choose the most expensive “Business Select” fare of $220, you’ll earn 2,640 points– 12 points per dollar.
>REDEEMING: When booking a flight, you will be given the choice of paying with dollars or with points. Using Denver as the example again, if you book the least expensive “Wanna Get Away” fare that normally sells for $100, it will cost 6000 points. The less restrictive $200 “Anytime” fare will cost 20,000 points. Business Select fares ($220) would cost 26,400 points.
>FEWER RESTRICTIONS: Unlike programs offered by legacy carriers where seat availability is murky at best, Rapid Rewards members will be able to redeem their points for every seat on every flight with no blackout dates or seat restrictions. Points expire only if you don’t have earning activity within a 24-month time period.
>TRANSITION: Current credits and awards will maintain their value until they are used or expire. Members’ accounts will automatically be transferred to the new program on March 1, so you can keep your Rapid Rewards number and there’s no need to re-enroll.
>INTERNATIONAL FLIGHTS: One of Southwest’s biggest challenges with its old program was that it only offered award flights to Southwest-served destinations in the continental U.S. while competing airline programs offer flights to more attractive far-flung international destinations. With the new program, members can redeem points for flights to over 800 new destinations served by other carriers. Similar to some credit card loyalty plans and AirTran, Southwest has teamed up with a third party travel agent where members can use their points to “buy” tickets on other carriers. (Details are somewhat sketchy here, but if the program is similar to that of AirTran, tickets for international flights will require a hefty redemption of points. . . but at least it’s an option for members who’ve banked lots of points.) In order to take advantage of this option, you must hold the $59/year Southwest Rapid Rewards credit card.
>ELITE LEVELS. Those near top of the heap, A-List Preferred members, will get free Wi-Fi access on all Southwest flights (currently it has close to 100 planes with Wi-Fi with plans to have it fleet wide within two years.) Also, with the new program, members only have to fly 25 one-way segments (down from 32) or earn 35,000 qualifying points to qualify for the A-List. For the new A-List Preferred tier, you must fly 50 one-way segments or earn 70,000 qualifying points. To help build point banks faster, A-List members get a 25 percent booking bonus; Preferred members get a 100 percent bonus. Members who fly at last 100 one-way segments or earn 110,000 points get a Companion Pass, allowing one designated person to fly free with the member for a year.
For a peek and more details, check out the new site here: www.newrapidrewards.com