Southwest Airlines new Rapid Rewards program: what it means for travelers

by McLean Robbins on

Today Southwest Airlines announced changes to its popular rewards program, Rapid Rewards. the all-new program, which promises to eliminate blackout dates and allow redemption for international flights for the first time, will launch March 1 and will will allow members to redeem points for any seat on any flight, with no blackout dates or seat restrictions.

AOL Travel has covered the basic information about the Rapid Rewards program restructuring, but we’re offering a bit more insight into what the program will mean for travelers.

A Brief History of the Rapid Rewards Program

Southwest’s frequent flyer program, Rapid Rewards, previously allowed customers to earn a free roundtrip ticket to any of their domestic destinations after the accumulation of 16 credits per 24-month period. The program also allowed a half-credit for using a Southwest partner to book car and/or hotel stays. Members also earned one credit per $1,200 spent on Chase’s Rapid Rewards-branded credit cards. Select merchants can earn double reward points.

In February of 2006, Southwest issued capacity control limits on its Rapid Rewards redemptions. This potential travel blackout will be removed with the new program. Details of how the Rapid Rewards program will integrate the A+ Rewards program of recently-acquired AirTran Airways have not yet been released.

According to FlyerTalk.com member NSK:

Rapid Rewards 2.0 is a perfect fit with Southwest’s brand as a no-gimmicks airline. The program may not be the most generous, but it is simple and completely free of any hidden catches. Unlike mysterious capacity controls, price-based redemption provides us an excellent ability to predict ability to redeem for free travel.

How Is Rapid Rewards 2.0 Different?

Southwest has assured its customers that existing credits and travel awards will remain available for use after the new system takes effect on March 1. Instead of a one-for-one system, travelers will now accrue points based on the fare and type of fare purchased, and redemptions will work the same way.

Wanna Get Away fares, the cheapest available, will accrue 6 points per dollar; Anytime fares 10 points per dollar, and Business Select fares 12 points per dollar. Travelers can also earn miles from shopping and dining partners.

Members’ accounts will automatically be transferred to the new program on March 1, 2011; no re-enrollment is needed. Points will not expire unless members have no earning activity in a 24-month period.

Truly frequent fliers will benefit from enhanged A-List and Companion pass award availablity. A new status, A-List Preferred, will accure 100% earning bonsuses. A-List Preferred can be achieved by flying 50 one-way trips or accruing 70,000 tier points. The highlight of this elite status is the 100% earning bonus as well as priority standby, sercurity and early boarding status, free Wi-Fi and a dedicated phone line.

Similar to other airline reward programs, members can also purchase points through the new program in 1,000 point groupings. The minimum purchase is 2,000 points.

A major program change is the ability redeem award points any of the more than 800 destinations in the Chase travel program, including internationally. More information about the Chase integration is expected to be released early next week.

Will the New Rapid Rewards Program Mean to Consumers?

Initial consumer feedback indicates that Rapid Rewards 2.0 makes earning and achieving reward travel slightly more complex, but more in line with other major carriers like American Airlines, United and Continental. A positive outcome suggests that because award redemption is now based on length of flight, travelers wishing to redeem awards for short-haul travel won’t feel as if their certificates are used in vain.

The basic component of the program – one free trip for every eight – is still in place.

Frequent flier Mark V. suggests that for long-haul and travelers frequently purchasing Business Select seats, the new program will actually enhance overall customer experience, allowing for faster rewards.

NSK says that “Elimination of extraordinary effective rebate ratios makes [Rapid Rewards] 2.0 much less interesting to FlyerTalkers than programs that still offer such opportunities,” but acknowledges that the program’s greater ease of redemption may be appealing to travelers who “decide that they prefer a program that delivers what it promises without any drama.”

Mark V. champions Southwest Airlines’ transparency in rolling over old credits in to the new program, stating that the shift is “nothing like what other airlines have done in the past. Earning opportunities are still there, and current points are not being devalued like mainline carriers have done in the past.”

NSK admits that “although the new program is significantly less rewarding than Rapid Rewards 1.0 for short-haul discount fare customers, it is financially sustainable and it is customer-friendly enough that we will learn to love it.”

Travelers hoping to use short-haul travel to accrue longer rewards tickets will suffer most, Mark V. notes. “The sport of flying cheap to get free awards is pretty much over.”

Naturally, we at Gadling will keep you updated on new developments as they arise. Feel free to weigh in with your opinion in the comments section below.

[Image via Flickr user ColumbusCameraOp]

Airlines have best quarter ever … thanks baggage fees!

by Tom Johansmeyer on

Every time you pay to check an extra bag you’re making someone’s life better. The latest data from the U.S. Department of Transportation reveals that the third quarter of 2010 was the most profitable for the U.S. airline industry since the department began keeping score in 2002. The industry’s operating profit margin hit 10.5 percent in aggregate. Low-cost carriers, as a class, had an operating profit margin of 11 percent, its best performance since hitting 11.2 percent in the third quarter of 2006.

How did the airline industry pull this off? Recovering economic conditions helped, of course, but so did the stuff that passengers have gotten comfortable complaining about. More than $900 million in third-quarter revenue came from baggage fees, with another $590 million from reservation change fees. Then, there was another $646 million in ancillary fees. It all adds up to more than $2 billion for a single quarter.

So, while we’re all complaining about these extra fees, it looks like many of us are paying them, too.Spirit picks up the highest percentage of its revenue from ancillary fees at 26.9 percent, up from 24.2 percent in the second quarter of 2010 and 20.6 percent in the third quarter of 2009. Allegiant was next at 9.7 percent. Delta and US Airways derived 7.7 percent of their revenues from ancillary fees, with Southwest at 6.7 percent.

Of course, the money isn’t just going into the pockets of airline employees and executives. The six network airlines spent 25 percent of their operating expenses in the third quarter on fuel. United Airlines spent the most on fuel among network carriers – 25.7 percent of total revenue – with Allegiant leading low-cost carriers at 44.1 percent.

Before you feel too sorry for airlines when it comes to fuel costs, remember those profits. Four network airlines had double-digit operating margins, along with four low-cost carriers.

[photo by Tracy O via Flickr]

Which airline made the most money on baggage fees?

by Tom Johansmeyer on

Last year, baggage fees were used by airlines to make up for lost fare revenue, as the recession kept people on the ground. This year, it’s just been a great source of extra revenue, as passenger traffic and fares are up – and the fees haven’t gone away. Almost all airlines are getting in on the action, some more egregious than others.

Well, data for the third quarter of 2010 is in, and we can finally take a look at who’s hitting us hardest … and for how much. The numbers will probably shock you. The top baggage fee-grabber owned close to 30 percent of the total baggage fees charged in the United States, a market that has reached $2.6 billion for the first three quarters of the year, and the top five dominate with approximately 80 percent of the total fees charged for bags, according to data from the Department of Transportation.

Let’s take a look at the top five airlines for baggage fee snatching (and then the rest):1. Delta Air Lines, $733 million: in fairness, Delta is the largest airline in the United States, so it’s to be expected that it will generate the most revenue.

2. American Airlines, $431 million: the third-largest airline hits the #2 spot for baggage fees, implying an aptitude for prying open customer wallets yet to be recognized by its competitors.

3. US Airways, $388 million: again, this is an impressive take, as evidenced by the distance between US Airways and Continental, in the #4 spot.

4. Continental Airlines, $258 million: this almost makes the airline look downright reasonable, especially when it’s year-to-date baggage fees aren’t even as substantial as what Delta raked in during the third quarter alone!

5. United Airlines, $239 million:

And, the rest:

6. AirTran Airways: $112 million

7. Alaska Airlines: $81 million

8. Spirit Air Lines: $56 million

9. Frontier Airlines: $44 million

10. JetBlue Airways: $43 million

11. Allegiant Air: $43 million

12. Hawaiian Airlines: $40 million

13. Virgin America: $27 million

14. Southwest Airlines: $23 million

15. Republic Airlines: $18 million

What’s the latest news with the airlines? Click here to find out!

16. Horizon Air: $13 million

17. Sun Country airlines: $9 million

18. Mesa Airlines: $2 million

19. Continental Micronesia: $2 million

20. USA 3000 Airlines: $2 million

[photo by The Story Lady via Flickr]

Southwest launches “12 days of luv” Twitter promo

by McLean Robbins on

We at Gadling are big on contests – particularly when the prize involves deeply discounted travel. As the song goes, for 12 days in December, your “true love” is supposed to give you gifts. Well, this year, Southwest Airlines wants to be your own “true LUV,” minus those silly Turtle Doves and annoying Drummer Boys.

They’re giving away 12 $1,000 gift cards, one each day during the “12 Days of LUV” promo (sponsored by Visa).

To enter, follow their Twitter account (@southwestair) and submit a themed FUN holiday photo that corresponds with the tweeted request. To be included in the contest, Twitterers must include the #12daysofluv hashtag and the requested original photo in their tweet.

The judges will be judging on the following qualities:

* Creativity and Originality: 20%
* Entertaining: 25%
* Southwest Appeal: 35% photo should reflect our Culture and Fun-LUVing Attitude.
* Rules: 20% Read and complied with the official rules.

Sounds simple, right? Now get tweeting.

Oh, and don’t forget to follow us while you’re at it (@Gadling).

[Flickr via YoLoPey]

Airlines, airports and passengers: nothing but gains this year [INFOGRAPHICS]

by Tom Johansmeyer on

There are a whole lot more of us flying this year: 4.3 percent more, to be exact. That’s the increase in domestic air traffic from September 2009 to September 2010, according to the latest data from the U.S. Department of Transportation. In that month, U.S. airlines had 57.3 million passengers, leading to the largest year-over-year gain since September 2007. Meanwhile, international passenger traffic on U.S. flights surged 9.4 percent year over year.

For the first three quarters of 2010, scheduled domestic and international passengers were up 1.5 percent, suggesting that the recovery has gained momentum throughout the year. Domestic passengers gained 1 percent, with international passengers up 5.3 percent. Relative to 2008, though, passenger traffic is off 6.8 percent.

So, who wins? Of course, the airlines have had a relatively fantastic year, especially the worst of them. Delta, considered bottom of the barrel, surged from #3 in September 2009 to #1 in September 2010, with more than 9 million enplaned passengers, up 68.6 percent year over year (but don’t forget that the Northwest merger plays a role in this. Delta‘s also the top dog for the first nine months of the year for the same reason, followed by Southwest, American Airlines and United Airlines.


Atlanta Hartsfield-Jackson International Airport remains the busiest in the United States by a considerable margin. Close to 32 million passengers passed through in the first nine months of 2010, an increase of 1.1 percent year over year. Atlanta led Chicago O’Hare, which came in second, by more than 9 million passengers so far this year. For the greatest gains, look to Charlotte: it was eighth on the list but posted a growth rate of 6.5 percent YTD.

Las Vegas was the only airport in the top 10 for the first nine months of 2010 to post a year-over-year decline. The number of enplaned passengers dropped by a rather substantial 3.6 percent year over year, hardly surprising given the fact that the Las Vegas tourism business has been slammed by the recession. Also, outbound traffic from Las Vegas is likely constrained by the local economy, which has been battered pretty badly (as real estate prices indicate).


Even though the number of passengers increased for airlines and airports, the number of flights operated slipped 1.2 percent from the first nine months of 2009 to the first nine months of 2010. Likely, the airlines were tightening up their flights, making better use of available seats and cutting expenses.

[photo by Yaisog Bonegnasher via Flickr]