For the first time in decades, Southwest is struggling.
The nation’s largest domestic carrier has been unable to take advantage of a shift in pandemic era changes to consumer demand for premium cabin travel.
The airline’s stock price has dropped from $63.42 per share in April 2021 to $29.95 today. That contrasts with big gains made by Delta and United’s shares over that time period.
After coming under activist investor pressure from hedge fund Elliott, the airline is ending the open seating cattle call, adding red-eyes, selling its flights on other websites, and making more changes in an effort to shift to a more traditional carrier.Â
Oddly, it isn’t planning on adding a first class cabin, as JetBlue and Frontier are doing.
It has added more fees, though has avoided adding change and bag fees. Don’t expect that to last.
Last month, the airline laid off employees for the first time in its history.
Over the years, Southwest has devalued the value of its points from 60 per dollar to 86 per dollar.
Now, without warning, they have reduced how many points you earn from flying on paid tickets.
- On typical Wanna Get Away fares, non-elites will now earn 2 points per dollar instead of 6 points per dollar. A-List elites will now earn 2.5 points per dollar instead of 7.5 points per dollar. A-List Preferred elites will now earn 4 points per dollar instead of 12 points per dollar.
- On Wanna Get Away Plus fares, non-elites will now earn 6 points per dollar instead of 8 points per dollar. A-List elites will now earn 7.5 points per dollar instead of 10 points per dollar. A-List Preferred elites will now earn 12 points per dollar instead of 16 points per dollar.
Full-fare Anytime fare earnings remain unchanged. Non-elites earn 10 points per dollar, A-List elites earn 12.5 points per dollar, and A-List Preferred elites earn 20 points per dollar.
On full-fare Business Select fares, earnings will go up. Non-elites will now earn 14 points per dollar instead of 12 points per dollar. A-List elites will now earn 17.5 points per dollar instead of 15 points per dollar. A-List Preferred elites will now earn 28 points per dollar instead of 24 points per dollar.
That is one paltry rebate for Southwest’s typical Wanna Get Away fare. If you value Southwest points at 1.3 cents each, that means earnings have dropped from 7.8% back to 2.6% back.
Worse yet, this was done without warning and will retroactively apply to previously booked travel. If I had previously booked paid Southwest travel, I’d certainly file a DOT complaint about that unfair and deceptive change.
So much for Transfarency. More like Unfareancy.
The most profitable part of airlines these days are their mileage programs, but the constant and no-warning devaluations will eventually kill the golden goose.
What will Southwest downgrade next? Free bags or no change fees on Wanna Get Away Fares? Will they just change the name of their most popular fare to basic economy?
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13 Comments On "LUV Lost: Southwest Slashes Mileage Earnings Without Warning"
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On FlyerTalk, we have one report yesterday of earning at the old rate for a pre-existing reservation. We have no reports yet of earning at the new rates. Transparently incompetent execution.
Dan, is there a concern of SW going bankrupt so mileage points and Credit should be used sooner than later?
Nope, they’re too big to fail and miles have never gone away in a Ch 11.
i like the header “luv lost”
Thanks 🙂
And why they abandoned nj/phl to Florida beats me
Low yielding routes.
Ugly move (and one of the worst I’ve seen in recent years) They should be getting a serious backlash on this. I just booked with them a few days back and it actually highlights the number of miles you’ll earn with each option. I wonder if there’s really a case for a DOT complaint as I’m sure they’re covering themselves in the fine prints.
Certainly DOT worthy for anyone that loses out on points.
Would have to spend $2000 so I could qualify for one way short hop between Southern California and Northern California…No thank you.
Yup, pretty brutal.
The reason why southwest was so successful was because of Herb Kelleher. He was a true visionary that did things differently. He was really shrewd in business.
When Southwest expanded its presence to primary markets it lost touch with what made it a successful airline. The more they make unfriendly customer moves, the less difference they will be from JetBlue, Spirit, and Frontier.
Want to be successful? Let’s do what all the failing airlines are doing.
All true, but they maxed out that business model, so growing required entering major airports.