I just did the math. Assume a trip that costs $400 minimum (wanna get away price) versus a Business class fare at $800 for the same trip. To redeem points for a free flight on the same route:
You would need 24,000 points to redeem an internet fare ticket at $400.
But in accumulating points you would need to fly 10 round trips at $400 times 6 points each to get 24,000 points. That means you will have spent $4,000 total before earning the ticket.
A Business class member (whose ticket is likely paid by the company) can earn points 4 times faster. So they only have to fly 2.5 times and pay a total of $2,000 to earn the same benefit -- $800 times 12 points for each round trip.
What's worse, news articles say SW is counting on business travelers to use their points for the lower fares so they don't use up the higher cost capacity seats. Since flights are capacity controlled, and business class travelers will be accumulating free tickets at a rate 4x faster that means higher rates to purchase and/or redeem lower costs seats for those who can least afford the increase. Which will freeze out families, leisure travelers, and college students who rely on those rates to travel - the bulk of their current fan base.
What's wrong with this picture? I think Southwest needs to hire an MIT grad to help them understand what this will math will do to their elasticities of demand with their core fan base.
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Why not just call the lower prices "Steerage" class and be done with it. How is it that a business traveler whose company pays for a ticket can then redeem those points for a lower priced ticket which is capacity controlled.
Why not just tell families like mine (there are four of us who fly a lot) to just go away?
I've paid for the stupid $10 early check-in. We fly our daughter home from school on the airline even though the schedule isn't as good as other airlines and she has to transfer instead of flying nonstop - all because of the EXISTING RR program.
Your staff are great. Your management team has non of Herb's vision. Unless your prices are going much lower, there isn't a compelling reason to fly SW as our exclusive airline anymore. But then I guess SW hopes that business will make up for all of the rest of us great "unwashables."
We all know this change is to try to keep the AirTran business travelers happy during the transition. But with so many other options, does that REALLY compensate for the number of flyers you are kicking to the curb?
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