Upon a day of reflection, and looking how I have used award tickets over the last year, there is one thing that is really irritating me about the new system - it has placed such a large cost on last minute awards redemption that in practice it's no longer an option. While there is no explicit close in rewards fee - there are several implicit ones add something like 300% to the cost of the rewards.
Take SFO to PHX, the route I fly most often. My average (not good) 1-way WGA fare is like $120. Anytime fare usually $249.
Say i wanted to fly from SFO to PHX tomorrow. There are currently 5 flights showing Standard Award availability, and all 12 showing Freedom award availability.
1. Under the current system I can burn 1/2 an award ticket and fly to Phoenix. Equivalent cost in spend for me to get there is something like 8 one way WGA flights at ~$120 per flights, or $960 in flight spend.
2. Under the new system if i planned ahead and got a WGA fare at $120 it would cost me 7,200 points (6 points*10 flights*$120). To get those 7,200 points i would have had to flown 10 one way flights at $120, or $1200 in spend. Already a devaluation, even if i planned ahead - but one that would be evenly offset by the new A-list bonus.
3. If i didn't plan ahead under the new system, i need 24,900 points ($249*100), so would have need to have spent $4,200 (6 points*35 flights*$120) to pay for one short last minute trip. So, more than a 4x increase in my cost! 35 flights on the same route to get 1 single one-way reward! Certainly not a cost i would ever pay, and I'm not sure how Southwest finds it defensible?
Two things about this are really irritating to me:
1. It is a lose/lose situation. Southwest would benefit for me spending my miles on a flight that they are very sure will go out with empty seats (which a standard award being available a day in advance is indicative of) and I am able to take a trip that I otherwise would find cost prohibitive.
2. Southwest is not at all competitive with other airlines now for close in rewards purchasing. For the example above United has 5 flights on tomorrow SFO to PHX which i could take for 12,500 miles.
Seems like this could be 'fixed' by adding some close-in rewards discount fares where Southwest has capacity. Assuming it's not, i'll keep my credit card spend with Southwest - which yields me a companion pass, and generally move all my non-companion travel spend over to United.
(As a side note, all the math to figure this out really shows how poorly it was designed)
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In total, I'm probably indifferent to the changes - lots of offsetting pluses and minuses for me. I certainly understand some people's frustration (big devaluation for those always flying on cheap fares), and it is definitely too complicated. Requiring your customers to do multiply and divide by 6 and 12 to figure out earning and redemption is just plain stupid.
One question. If I have flow 50 flights from 3/1/10 to 3/1/11, will i receive the new A-List Preferred when the program launches?
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