The Milenomics Podcast Network

Checking in Episode 29: Southwest Changes With Brian M

Added 2025-05-05 20:38:31 +0000 UTC

0:47 Background on Southwest Changes

Elliott Management
- During past ~1-year increasing ownership stake
- Demanded and, eventually, forced Southwest changes
Southwest resisted changes at first
Now, Southwest has announced nearly all changes suggested by Elliott

02:23 Which Changes Are Already in Effect?

Redeyes
Icelandair partnership [meh] Back to the 1990s! https://www.wsj.com/articles/SB850869885629683000
No-Notice Lower earnings on WGA and WGA+ fares
- Early March 2025 Cut earnings on newly booked WGA+ and WGA fares with no-notice. https://frequentmiler.com/southwest-slashes-points-earning-on-wanna-get-away-fares-with-no-notice/
  - Wanna Get Away (BASIC) fares will now earn 2 points per dollar rather than 6.
  - Wanna Get Away Plus (CHOICE) fares will now earn 6 points rather than 10.
  - Anytime (CHOICE PREFERRED) fares will remain unchanged at 10 points per dollar.
  - Business Select (CHOICE EXTRA) fares will now earn 14 points per dollar rather than 12.
Dynamic pricing on award redemptions [generally lower]
- vary across its fare products
- Varies depending on high- and low-demand travel periods
- Rounded to a 500 or 1,000 interval.

05:25 Which Changes Go into Effect for Fares Booked beginning May 28, 2025?

Changes to Fare Types
- With further changes to become fare “bundles”: https://www.southwest.com/customer-enhancements/assigned-seating
- 5/28/25 - Introduction of Basic Economy (elimination of WGA)
  - No changes to Basic fares
  - No Same Day Change/Standby on Basic Fares
    - For WGA, Same-Day Standby was included but SDC cost fare difference
    - Likely NO EXCEPTION for A-List and A-List Preferred
  - No advance seat assignments (when assigned seating begins)
- 2 Free Checked Bags ending for most passengers on non-BS fares
  - Except: A-List, A-List Preferred, and Credit Card Holders
  - BS Fares = 2 free checked bags [WAIVED] (all other fares must pay/waive/reimbursed)
  - A-List Preferred Members = 2 free checked bags [WAIVED] for Tier Member and up to eight additional Passengers traveling on the same reservation
  - A-List Members = 1 free checked bag [WAIVED] for Tier Member and up to eight additional Passengers traveling on the same reservation
  - Rapid Rewards Credit Cardmembers = 1 free checked bag [WAIVED] for Cardmember and up to eight additional Passengers traveling on the same reservation
  - Companion Pass Companions = 0, 1, or 2 free checked bags [PAID, then REFUNDED] based on the associated Companion Pass Member's Tier Status or Fare; but, the Companion will need to pay the applicable fee(s) at the airport, and the fee(s) will be refunded to the original form of payment.
    - TBD - What if Companion Pass Member is a Credit Cardmember…does that benefit confer to the Designated Companion?
- Flight Credits will begin to have expirations of 6-12 months based on booking date (expiration is fly-by; not book-by)
  - Expirations become
    - Business Select* – 12 months
    - Anytime* – 12 months
    - Wanna Get Away+ – 12 months
    - Basic – 6 months
    - BS and AT fares are refundable; so, paying with existing flight credits is disadvantageous because one would lose the refundability back to a credit card
  - Expect the return of customer-unfriendly policies when combining Flight Credits (earliest expiration date applies)

20:14 Which Changes Go into Effect for Fares Booked beginning Q3 2025?

Changes to become fare “bundles”: https://www.southwest.com/customer-enhancements/assigned-seating
- Basic == Basic
  - No seat assignment until check-in (unless? Tier/mid-or-high-CC member), Standard seat assigned at check-in, this fare is nonrefundable and will not allow for changes. However, if Customers need to change their flight, they will be able to upgrade to Choice, Choice Preferred, or Choice Extra
- WGA+ == Choice
  - ability to select a Standard seat at the time of booking, Transferable Flight Credit, and flexibility to make same-day changes.
- AT == Choice Preferred
  - ability to select a Preferred seat at the time of booking, earlier boarding, ticket refundability, and day-of travel perks similar to those of Choice Extra
- BS == Choice Extra
  - ability to select an Extra Legroom seat at the time of booking, two checked bags for free (weight and size limits apply), earlier boarding, ticket refundability, day-of travel perks, and the highest Rapid Rewards® points earn ratio.
Bookings for 2026 Flights with Assigned Seating
Cardmember benefits changes
- Chase Priority and Chase Performance Business Cards looking good
  - Std/Pref seat selection at booking
  - Extra Legroom within 48 hours of departure
  - Similar to A-List benefits

35:03 Which changes have been announced but not yet implemented?

During 2nd Half of 2025 – Extra Legroom, "Preferred", and Standard seating
Tier Benefits Changes
- SDC on Basic likely gone
- Same-day standby remains
2026 – Boarding Changes
- From stanchions to 9 boarding groups
2026 – Assigned Seating on Flights

35:52 Which changes do we expect but haven't yet been detailed?

Checked Baggage Fees Amounts
Extra Legroom & "Preferred" Seating Fees Amounts

39:50 What actions should we take before May 28, 2025?

GC Keep as is
LUV Vouchers:
- use and book WGA+ or above, cancel to create transferable non-expiry credits
Organize Flight Credits (aka TTFs)
- Make transferrable before expirations are re-instituted
- Determine whether multiple smaller amounts (especially, if you may need to transfer) or fewer higher amounts will work better for you
- Transferring requires the entire Flight Credit is transferred; but,
- Applying a Flight Credit should not contaminate the residual with an expiration date
- Remember Points bookings taxes/fees for small denominations
Book any WGA fares for through E.O.S. that may need to be cancelled
- May 15, 2025 - SWA expects to extend schedule through 1/26/26
Add Companions to any flights through E.O.S.
- Taxes/fees may be name-locked, expiring Flight Credits post 5/28
Consider whether you need Checked Bags on flights through E.O.S.
- Book under rules applicable through 5/27/25
- Do you have/need a Chase Co-Branded Credit Card re Checked Bags
- Will a Status Match-Challenge make sense for you? [Checked Bags, Seat Assignments]
Use Chase Credit Card EBCI and Upgraded Boarding benefits as those will be going away and you may get a second bite at the apple
Decide whether any specific Chase card benefits are worth pursuing/keeping and/or whether A-List/A-List Preferred may be worth it in light of Changes
Don't Wait!
- Southwest has already shown willingness to make negative changes overnight with no advance notice (earnings on paid fares, for example)

53:26 How should our strategies and tactics change beginning May 28, 2025?

Existing Reservations booked prior to May 28, 2025
- Any flight beginning in May 2025 could have extra legroom seats as Southwest retrofits ~800 aircraft beginning in May 2025….but, assigned seating won't apply until flights sometime in 2026 and only on fares booked later in 2025
  - Each day, more planes with [30-up-front & 16-exit-row] extra legroom seats (and, mostly [129], 1" less-legroom seats…from 32" to 31") will be flown by Southwest and those extra legroom seats will be subject to open seating (and seat-saving)
    - plans to start by reconfiguring its 737-800s and 737 MAX 8s, and then after the summer of 2025, will start reconfiguring 737-700s
    - If Southwest doesn't prevent pre-boarders from sitting in extra legroom seats, expect extra legroom seats (other than exit rows) to be taken by pre-boarders and A1-A15.
- Will the benefits of a change be worth the loss of features of the fare associated with the existing reservation
  - 2 Free Checked Bags
  - Flight Credit limitations
  - Lower earnings for paid fares
Fewer people will check bags due to costs; so, expect
- slower boarding
- more bags in the overhead and
- More gate-checked bags
New Reservations beginning May 28, 2025
- Award Bookings will have the big advantage of points being returned to the account without expiration; but, also will generally have the benefits of and limitations of the fare conferred
  - Basic Award fares will likely be freely cancellable; but, not changeable
    - Can be meaningful for
      - Ease of refaring
      - Keeping promo codes associated with reservations
  - Will the taxes/fees of an Award Booking be limited by the Flight Credit restrictions implemented 5/28? [TBD]
- Careful of Flight Credits Expirations Dates
  - Combining multiple into a single reservation will likely contaminate all with the earliest expiration date
  - Southwest Flight Credits (formerly Ticketless Travel Funds) have several nuances that should be understood before going after them - including,
    - Flight Credits expire 6-mos or 1-year after the original date of booking [this is a travel-by, not a book-by, expiration timed from the date of booking] and
    - Flight Credits can be used only to book flights for only the passenger from the original reservation (or the RR member to which they were transferred, if transferrable and transferred).
    - A maximum of 3 forms of payment [like Dell] can be combined for a new reservation.
    - When Flight Credits combined into a new reservation, all combined Flight Credits take on the earliest expiry from any of the combined Flight Credits.
    - For those who are not used to Flight Credits, it can be more complicated than one might logically expect to use Flight Credits.
- Book as multiple-pax or single pax?
  - Baggage fee waivers for tier members/CC holders apply to all pax on same reservations
    - But, no stacking of 1+1 if you're A-List & have a credit card
  - BUT, if only 1 fare available at lower prices, difficult to re-fare
- Is a "Basic" Fare worth booking (over WGA+)
  - 6-mos expiration
  - No advances seat assignments
  - No SDC; no Same-Day Standby
  - Yes, probably, if on points and don't need seat assignments
- If booking a AT or BS fare, consider using a credit card because using a Flight Credit, LUV Voucher, or Gift Card will not be refundable; but, paying with a credit card will mean the fare is refundable.
- Look for promos on SWA that don't show on Google Flights
When Assigned Seating Flights Begin in ("first quarter" of) 2026
- Q3 2025 - Southwest may begin selling assigned seating
- Goodbye stanchions with A,B,C groups in favor of 9 boarding groups.
  - Justin Jones believes this will speed-up turns
- Tier Seat Selection Benefits will apply to Companions
  - A-List (+ same PNR) ability to choose Extra Legroom within 48 hours
  - A-List Preferred (+same PNR) ability to choose Extra Legroom at booking
- Chase Cardmembers
  - all Rapid Rewards Credit Cards will include new complimentary seating and boarding benefits, when available, as well as new ways to earn.
  - Select cards will also include complimentary seating upgrades, within 48 hours of departure, when available. .
- Goodbye open seating in favor of assigned seating
- Hello seat assignment fees, extra legroom seats, and "preferred" seats
1:02:56 Keep using old tricks:
- Companion Pass remains
- Points don't expire - Policy Changes Q&A | Southwest Airlines
- (maybe?) +/- 14-days free changes if a reservation is impacted by a schedule change. (2 changes?)
  - Q1 Earnings announcement included expectation of reduction in 2025 schedule
- (maybe?) ability to turn non-transferrable Basic fare Flight Credits into "one-time" Transferrable Flight Credits by using to book a WGA+ or higher fare?
- Companion pass (CPQPs chase like AA Loyalty Points)
- Beware the auto-cancellation bot (runs nightly on impossible bookings)
- Avoid Phone bookings
- Book as One-Ways (except for promos, PUJ, year-shifting shenanigans, etc.)
- Static URLs for
  - Fast Check-Ins
  - Searches on Southwest's website, especially, URL Manipulation trick for the mornings of schedule extensions
- Likely still subject to a maximum of 3 payments per passenger.
- Back to Points as the preferred booking currency (versus discounted gift cards, no TTF expiration, and transferrable TTFs during pandemic had shifted pendulum to paid fares)
- Rows 1, 9, 17 (and Close Behind) If You’re Thirsty
- 365/yr wifi Credits with Chase Performance Business
- Status Matching
  - Can be done every 12 mos (from expiration of promo status
  - Status valid instantly for "90 days" - but, actually good for the rest of month approved and each of the 3 following months, so, 7/1 match is 123 days but a 1/31 match is ~89 days....time accordingly (submit early in a month).
- Accompanied Minors can easily be on a separate reservation
- Same-Day Change / Same-Day Standby now likely requires WGA+ (even for elites).

1:11:32 Questions to be Answered?

When will flights with assigned seating begin (expected in Q1 2026)?
When will bookings require assigned seating (expected in Q3 2025)?
How much will seat assignments cost?
When Flight Credits expire, will the previous unofficial unpublished policy return that, if TTFs expire, then, after expiration, Southwest (phone rep) has consistently offered to re-issue them (within 6 mos after expiration) as a LUV Voucher valid for 6 mos, less a $100 fee taken out of the amount if the expired TTFs?
Fee amounts for checked bags? [expect $35-$50 per bag]
Will taxes/fees on award tickets be refundable to original form of payment? Or, will those be subject to be returned only as Flight Credits subject to transferability and expiration policies of those fare types?
Checked Bags refunds process for Companions of CP Members
Will there be a period of time when the schedule booking window extends into when flights will (eventually) have assigned seating; but, the booking process doesn't have assigned seating yet? How can that be leveraged?
CP Companions - Seating benefits
- References to Tier and Cardmember seating benefits often mention “up to 8 passengers on the same reservation”
Southwest May Look to Retain/Attract Passengers
- Discount Promos
- Elite Status matches, challenges, and promos
  - Monitor: https://www.southwest.com/loyalty/myaccount/promotions
- More partnerships