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Home  >  Award Travel • Southwest Airlines  >  Southwest Airlines Devalues, Expect Others To Follow
Award TravelSouthwest Airlines

Southwest Airlines Devalues, Expect Others To Follow

Matthew Klint Posted onApril 14, 2021 12 Comments

Airlines will devalue this year…because they can get away with it. We’ve already seen it with United and Delta. Now we’ve seen it with Southwest Airlines. Expect more. Spend your miles now.

Southwest Airlines Devalues Without Notice…Others Will Too

Although a familiar mantra on Live and Let’s Fly, I’ll repeat it again: miles and points are a depreciating asset, not a nest egg. Think used car, not stock or mutual fund (or even bond).

Today, Southwest Airlines demonstrated why. Points are worth 6% less this morning than they were last night. Southwest, which operates a revenue-based loyalty program, devalued without notice (except to The Points Guy).

I don’t fly Southwest or collect Southwest points, so this isn’t a big deal to me in terms of my own flying patterns or cache of points. Nevertheless, every time a carrier devalues without notice it represents a degradation of trust and respect and sets further precedent for other carriers to copy.

Southwest wasn’t the forerunner of no-notice devaluations. Indeed, United devalued earlier the pandemic. So did Delta. So did Virgin Atlantic.

And they do it because they can get away with it…because revenue or distance or zone-based redemptions do not change the fact that consumers have amassed heaps of miles during the pandemic that they are now trying to use. But yes, it is particularly egregious when a revenue-based program devalues without notice because there is an even stronger implied promise that your points are worth a certain, fixed amount.

Folks, Kyle’s analysis on Sunday was prophetic: spend your miles now. There will be opportunities to rebuild your balances at future points. In fact, you can always cancel and redeposit if prices do not rise. But think about your travel for the rest of 2021 and into 2022. Book the space now. There are millions of Southwest Airlines customers this morning who wish they had not waited…

CONCLUSION

Instead of 76-78 Rapid Rewards points per dollar, you now need 83 points per dollar. It stinks. But it is not unexpected. Quite the contrary, I expect other carriers will continue to devalue.

My prediction? Alaska Airlines will devalue WITHOUT NOTICE (despite assurances otherwise) and we will see an announced award chart devaluation at American Airlines later this year. Singapore Airlines, Air France-KLM will devalue and Delta and United will again jack up partner award rates. I sure hope I’m wrong, but I’m preparing for the worst…

image: Southwest

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About Author

Matthew Klint

Matthew is an avid traveler who calls Los Angeles home. Each year he travels more than 200,000 miles by air and has visited more than 135 countries. Working both in the aviation industry and as a travel consultant, Matthew has been featured in major media outlets around the world and uses his Live and Let's Fly blog to share the latest news in the airline industry, commentary on frequent flyer programs, and detailed reports of his worldwide travel.

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12 Comments

  1. anonymous Reply
    April 14, 2021 at 11:00 am

    They “Wanna Get Away” with it like the other airlines do.

  2. Dan Reply
    April 14, 2021 at 11:03 am

    Toldja. Disneybucks.

  3. Harley Hay Reply
    April 14, 2021 at 11:37 am

    I use BofA Travel rewards or cashback cards. I don’t “invest” in airline credit cards where those points are worth hardly anything. Airline credit cards are only good for the SUB.

  4. T Reply
    April 14, 2021 at 11:39 am

    I hope Matthew and Kyle are not upset with me, but why are we surprised that United and other carriers devalue? These days, when one signs up for a credit card, he/she will get 70,000, 80,000, 100,000 bonus miles easily. When airlines give out miles easily, then those miles are not value anymore. I agree that one should burn miles from time to time, but our purpose is to use it in urgent case or special route, not just burn it for the sake of using the miles. Yes, we should book award trips, but would you want to book a round trip from Newark to Boston for 50,000 miles or more? We supported United (and other carriers); we trusted United would make some good changes that benefit guests; we learned hard lessons from United and were betrayed so many times; yet we continue to support it. Who are to blame?

  5. Jason Reply
    April 14, 2021 at 11:47 am

    So much for “transparency” as Southwest always touted.

    Used to be 60X, now 82X…. that’s a nearly 30% devaluation; not including the massive fare increases. The average redemption cost has to have more than doubled in the past few years.

  6. DCA Will Always Be "National" Reply
    April 14, 2021 at 12:13 pm

    Further, WN also benefits from a form of halo effect; they’re not searchable on OTAs and lots of the traveling public still (wrongly) assume they’re the cheapest on any route they fly and will head straight for the Southwest site. On nearly all routes I fly, WN is *sometimes* cheaper, but not by much – $20 here or there, and definitely not frequently enough to warrant me even considering them as a primary option. I want an assigned seat. I want to wait in the nice part of a terminal. And I’m willing to pay a few extra bucks for that the 1 out of 7 or 8 times WN is cheaper.

  7. Philly380 Reply
    April 14, 2021 at 12:19 pm

    other bloggers promote discount miles, etc. It’s crazy if anyone bite on those deals, especially no one know when they can redeem points for nice international trips, and I’m not interested in less than normal flight experiences such as see crew wear PPE and make me feel like i’m in ICU unit instead of F or J seat.

    I focus on stashing MR / UR points and will transfer them out when international travel is back to relatively normal. Alaska is def gonna devalue that make people weep for hoarding miles over years.

  8. Al Reply
    April 14, 2021 at 12:42 pm

    Never understand how miles/points people tend to freak out whenever airlines or hotels “devalue” their currency as if it’s something so conspiratorial or such a deceptive thing to do or is so out of the ordinary. Do grocery shopping bloggers inundate the airwaves with posts pointing out Orange Juice just went up another 7 cents? “DAIRY CABAL INCREASES BUTTER PRICES BY 24 CENTS WITH NO NOTICE!!!!!” Seriously? EVERYTHING in this kind of economy eventually and steadily goes up in price. It’s happening everywhere and ALL THE TIME. But for some reason, it’s just not acceptable, completely surprising and just plain evil when airlines and hotels join in such inflation. Such a strange view.

    • Matthew Klint Reply
      April 14, 2021 at 12:47 pm

      Are you seriously drawing a link between a loyalty program that incentivizes customers based upon the implied promise of a certain return for your points/loyalty and a grocery store or gas station?

  9. Slappychasez Reply
    April 14, 2021 at 1:31 pm

    @Matthew – what do you consider an acceptable level of points to maintain in an airline or hotel program for last minute or urgent awards with no clear use for next 6-12 months?

    • Matthew Klint Reply
      April 14, 2021 at 1:37 pm

      Less than 200K. I currently have quite a bit more in Hyatt, United, British Airways, and Air France-KLM, but I am going to get busy booking. It’s a good way to organize and get excited about the rest of the year and 2022.

  10. PM Reply
    April 15, 2021 at 1:25 pm

    An approach along the lines of ‘airlines will devalue their miles soon’ misses a really important point: the value of miles for long-haul business class redemptions has already plummeted as the drop in business travel has sent fares crashing. Business class prices between Europe and S. America are literally half what they used to be two years ago, plus there are a lot of time-limited campaigns like ‘companion offers’, premium economy sales and so on.

    The added value offered by awards is that they tend to be more flexible than revenue tickets, and that may be pretty important when lots of countries keep changing their entry restrictions. Other than that, revenue tickets often seem to make more sense at their current price points.

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