More Details Emerge on the Changes Coming at Southwest

On Thursday this week, Southwest released a video with Executive Vice President of Customer and Brand Tony Roach that gave answers to some common questions being asked about the upcoming major changes that have been announced. While many questions remain unanswered, we did get some important insight into the changes that will take effect on May 28th.

Who gets free checked bags?

We already knew that A-List Preferred members would continue to get 2 free checked bags and A-List members and primary credit card holders would get 1. Now we know that these benefits will extend to up to 8 additional passengers traveling on the same reservation, which is reasonable and competitive with other airlines’ policies.

How much will checked bags cost?

I’m not sure why they addressed this question if they can’t answer it before they are active but will also give more details as it gets closer which would presumably also be before they are active. However, they will be “in line with industry standards” so we can expect the second bag will cost more and overall the pricing will probably be in the $35-50 range.

What if my flight was booked before May 28th?

Southwest won’t begin selling flights with bag fees until May 28th so if you book before then, bags will still fly free. Surely this will create some confusion for flights booked well into the future but at least it honors the terms of the sale that was previously made (**cough, unlike changing the points earning rate overnight for flights already booked a few weeks ago, cough**).

However, I strongly suspect that if you change your future flight after May 28th, you would then be subject to all of the new policies. Hopefully we get clarity on this because if you find that your future flight is cheaper but plan to check bags (and don’t get any for free), changing your flight to save $20 on your fare won’t make sense, especially considering the new flight credit expiration policy.

Will Companion Pass reservations also get free checked bags?

The short answer is “yes”, but it won’t be as easy as it could be. Because the companion ticket is on a separate confirmation number (why??), the benefits won’t directly extend to the companion. Instead, you will have to pay for the companion’s checked bags and then later you will get a credit. I expect this will be fairly smooth, but still seems a little silly that they can’t automate the IT. Perhaps worse will be the in-airport experience. If you don’t pay via the app, will you be able to use the automated kiosks and bag drop, or will you have to wait in the full-service line? I would assume the latter which is disappointing.

What will variable point redemption rates look like?

We didn’t really learn anything new from the original announcement, although the choice of words was interesting. Lower demand flights “will” have a lower redemption rate and peak demand flights “may” have a higher redemption rate. Some flights may have the “same or similar” rate as they do today. That last part is interesting to me. The word “some” instead of “many” or “most” could be a clue that we aren’t just talking about the 10% of lowest and peak demand but real variable redemption value across the majority of their flights.

As I wrote last week, this is the change that actually concerns me the most. With fully dynamic pricing today, you already pay much more for a peak demand flight. Variable redemption will be like a multiplier, and I predict this will be a largely negative change. Even though the question also asked, “when will this go into effect”, this was not addressed in the response so for now we can assume it will also start with new bookings as of May 28th.

My open questions

I plan to reach out to Southwest to try to get some more answers to these questions:

What will happen with flights booked before May 28th that are changed after May 28th? Will they lose the benefits that are being lost at that time such as flight credits that do not expire and free checked bags?

Will Basic fares be generally reduced from current Wanna Get Away fares due to unbundling of the current benefits like free checked bags?

How will the customer ensure their checked bag is free for a flight booked today but flown well after May 28th? Will that be automated in the computer system?

What is the rationale for variable point value when your program is already fully dynamic? Peak flights may already be 5-10X the cash or points price of low demand flights so adding a multiplier that further erodes the value of points is a major disappointment. At minimum, what is the commitment to the floor of 1 Rapid Rewards point; 1 cent, 1.1 cents, other?

The video mentions that peak flights “may” have a different redemption rate and lower demand flights “will” have a different redemption rate. The choice of words is interesting. Have you not decided yet how this will work on peak demand flights?

What will be the new seating benefits for cardholders? Do you really not know at this time or are you just choosing not to announce it? If the benefits are strong, it may prevent people from cancelling their cards due to the overall negative changes so not announcing it could be taken as a sign that the benefits won’t be very exciting. At minimum, can you give some insight into the differences that might exist across the card portfolio, with 5 different Chase cards available at a range of price points?

What about you, what questions remain unanswered in your mind about the changes happening at Southwest?

TL;DR: We received an update on the changes coming to Southwest Airlines, confirming that additional travelers on the same reservations will get the baggage allowance of an elite member or cardholder, and that the changes will go into effect for new bookings on May 28th, but not much else at this time.