Friday, December 10, 2010

Southwest Airlines - A Short-Haul Luv Affair

(This article is now outdated do to the New Rapid Rewards Program launching on March 1, 2011.  I'm just leaving it up out of nostalgia for the old program - which was truly one of a kind.)

Breaking Down the Rapid Rewards Program vs. the Majors

There is a lot to luv about being a frequent flyer with Southwest Airlines.  The Rapid Rewards program has changed a little over the years, but it continues to grow and evolve along with the airline. Now that Southwest has so many destinations (and is about to pick up a few more with the acquisition of Airtran) a lot of people are wondering how they stack up against the big 4 airlines: American, United/Continental, Delta, and US Air.
When it comes to total destinations, Southwest can't compete with the majors simply based on international exposure.  Internationally all of the majors have hundreds of destinations; whereas Southwest will pick up its first international destinations in Cancun, Aruba, Puerto Rico, and Montego Bay after the AirTran acquisition closes.

Domestically, Southwest's services 69 destinations before the acquisition of Airtran, which will add several more.  This compares favorably against American's 81 domestic destinations.  Southwest also has greater reach across the country than US Airways, whose 100+ destinations are primarily bunched up on the East Coast.  However, Delta's acquisition of Northwest and United's acquisition of Continental have given them a distinct advantage in servicing almost every city in the US.

What Southwest lacks in global reach it makes up for in ease of use.  The airline is well known as a low fare provider, and has recently carved a niche by also being low-fee and low-hassle.  Those factors along with the award winning Rapid Rewards Frequent Flyer program should give this airline strong consideration for your flying needs.

Rapid Rewards first differentiation from the majors is that as opposed to counting up miles flown, Southwest just counts the segments flown.  Each one way ticket is worth one Rapid Reward credit.  Round trip flights give you 2 credits.  (There are no credit's given for stopovers or plane changes along the way to your destination).  In order to get a Standard award ticket you need to earn 16 credits.  As we apply this to some practical situations, you'll see that Southwest is superior for short flights.

Let's say you often fly a short route like Los Angeles to San Francisco or New York to D.C.  After 8 round-trip flights on Southwest, you'll have earned 16 credits for a free Standard ticket that you can use to go anywhere in the country.  On a major airline you'll earn the minimum 500 miles per segment, earning you just 8,000 miles.  This means you'd have to fly an additional 17 times just to get 25,000 miles for a saver ticket!  This is why Southwest is so popular for short haul flights - you can earn 3 tickets for every one ticket on a major airline.

Southwest award tickets are also the easiest in the industry to use.  If you plan in advance at all, your chance of finding Standard award availability is very high.  If you fly last minute on a crowded route, you can combine 2 Standard Awards into one Freedom Award and get on any flight that has a seat.  If you cancel an award ticket, it just goes back into your account and no fees are applied.  This allows you to book early on for "possible" trips knowing there is no risk if you decide later on to cancel.

Southwest has always been known as a low fare airline, but now they are reinventing themselves as a low fee airline and low hassle airline.  They are the only US airline that doesn't charge you for checked baggage, and doesn't charge you change fees if you want to change your flight.  These can run into hundreds of dollars on other airlines.

Have you ever tried to cancel and rebook a flight with a major airline?  It's a nightmare - an expensive nightmare.  With Southwest, if you ever decide not to take a flight, you can just cancel it and use the money any other time within a year.  If you cancel a $300 ticket from Miami to Chicago you can reuse that money the next week to fly from Baltimore to Las Vegas.  You don't pay any fees, and you don't have to fly out of the same airports.  It is completely hassle free!  Often times, I'll book 2 Southwest flights on the same day just in case I oversleep or my meeting runs late.  The only stipulation is that you have to use the credit within a year.

Another little known benefit for Southwest flyers is the Southwest Companion Pass.  If you manage to earn 100 Rapid Rewards points in a year, you can designate one companion that flies for free with you on any Southwest flights.  You can change your companion up to three times a year, and there are NO blackout dates.  Even if you're using an award ticket, your companion can fly with you for free.  The best part of this deal is that all hotel, rental car, and credit card points earned count towards the 100 point threshold.  I know people who have paid their taxes using the Southwest Signature Visa Card in order to meet the qualification requirements.  If you can make it happen, this is definitely the best deal in town.

OK.  So now that we know all the great things about Southwest like the companion pass and the ability to earn cross country flights by just flying little segments, where's the catch? Well there are a few.  First of all, there aren't any elite tiers on Southwest Airlines.  There's only one group called the A-List, which is derived from the Southwest boarding process.  Southwest is unique in that they don't do seat assignments.  Instead, you are assigned a letter and number based on the order in which you check-in for the flight.  You then board in that order.  A1-A60 board first, followed by B1-B60, followed by the C Group.  You can pay a little bit extra ($10-$25) to fly Business Select and be put into A1-A15 giving you your choice of seats on the plane.  Otherwise, you can check in online up to 24 hours in advance, and believe me, people check in the minute that clock strikes 24 hours.  That is the only way to get into the A group.  If you wait till you get to the airport, you'll be choosing a middle seat.

If you fly 32 segments in a year, you qualify for A-List membership, which means you'll always be in the A group even if you check in late.  However, that is the only tier.  If you fly 100 segments a year you will be treated just the same.  A-List membership also allows you to cut the security-line at certain airports, but that's about it.  Southwest does not have any first class cabins, and it doesn't give any bonus credits to its frequent flyers.  This is where the majors have an advantage.

Using a similar example from earlier, lets say you often fly coast to coast from New York to Los Angeles, or San Francisco to D.C.  After 5 flights on a major airline you would earn 25,000 miles that are good for a saver ticket in the United States.  You would also become a tier one elite member eliminating those annoying baggage fees, and also giving you priority check-in, booking and other preferential treatment.  You'll also be eligible to score free upgrades to first class and get discounted access prices for the comfy airport lounge.  Once you're elite, you'll start earning bonus miles for every flight and begin working up to the next elite level for even more perks and points.  Eventually you can cash in all of those miles for a trip anywhere in the world.  However, on Southwest after those 5 long cross country flights you'll only have 10 credits and will still need three more round trip flights before you see any benefits.

The other advantage the majors have is that as long as you show a little activity in your account every year or so, your points will never expire.  On Southwest, after you earn your first credit, you need to earn your 16th credit within 24 months or the credits will begin to expire.  After the 16th credit, you have one year to use your Standard ticket or it will expire as well.  The downside is that you have to move quickly.  The upside is that Southwest makes it very easy to use your free tickets every year.

So what do you make of all this?  I recommend you do what I do.  Never fly a major airline less than 1,500 miles each way.  Instead, use Southwest's low fares, low fees, and low-hassles for all of your short flights.  On longer flights I choose to accrue points on the major's that I can save up for international travel.  Until, of course, I earn another Standard ticket on Southwest.  I'll gladly use that to fly across the country for free!

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