Southwest Airlines Rapid Rewards points are worth, on average, about 1.4 cents per point. That has been our Reasonable Redemption Value for several years, so I recently took that concept for a test drive by collecting hundreds of data points over different routes and fare types, expecting to report at least a slight devaluation since the last time with published the value of Southwest points. However, after spending hours collecting data, I was somewhat surprised to find that Southwest Rapid Rewards points are mostly holding steady at around 1.4c per point, with limited opportunities to get as much as 1.6c per point (or possibly even more).
Southwest Rapid Rewards is a revenue-based program
Southwest Rapid Awards has long run a revenue-based program whereby the price of an award is determined relative to the cash price of a ticket on the same flight. That is to say that more expensive flights cost more points and less expensive flights cost fewer points.
However, that isn’t to say that points have a uniform value. On the contrary, value per point can vary a bit from flight to flight. Since some flight taxes are waived for award redemptions, it has long been the case that inexpensive flights with high taxes have often yielded opportunities to get higher value out of points. Generally speaking, the cheapest flights offer opportunity for the highest value per point.
In the past, we’ve seen some international routes to offer value that reached as high as 1.9 cents per point. In our most recent analysis, the value of points topped out at just over 1.6 cents per point. You can read more about why some International flights yield high value per point in a previous analysis of the value of rapid rewards points.
Our methodology
In order to refresh our Reasonable Redemption Value for Southwest Rapid Awards points, we collected hundreds of data points over a range of routes to analyze the value of points as compared to Southwest cash prices.
For this analysis, I selected a variety of city pairs that included both long and short domestic itineraries (including popular nonstop routes like San Francisco to/from Los Angeles, hub connections like Baltimore-Washington International Airport to Las Vegas, and major cities to/from smaller markets like Orlando to/from Albany, etc) and select international itineraries (including Chicago Midway to/from Cancun, Sacramento to/from Cabo San Lucas, etc).
For each city pair, I collected flight examples for a random Wednesday one month in the future and for a Friday during peak summer travel dates.
For each example date, I selected two to three desirable daytime flights departing after 8am where possible (or as close as possible) to analyze in each direction as follows:
- Nonstop City A to City B (departing daytime after 8am)
- 1-stop City A to City B (departing daytime after 8am)
- “Cheapest” flight City A to City B departing during reasonable hours if it wasn’t either of the above
- Nonstop City B to City A (departing daytime after 8am)
- 1-stop City B to City A (departing daytime after 8am)
- “Cheapest” flight City B to City A departing during reasonable hours if it wasn’t either of the above
The purpose of the constraints (such as a daytime flight departing after 8am) was to collect examples of desirable flights that a traveler would be likely to want to book rather than solely measuring cherry-picked flights chosen for value over convenience (although I did include a “cheapest” option departing during reasonable hours to see whether it made a measurable difference on results, but it didn’t have a significant impact).
For each selected flight, I recorded each of the available Southwest fares both in terms of cash rate and award price:
- Wanna Get Away
- Wanna Get Away+
- Anytime
- Business Select
I further recorded the taxes on award flights, which are typically $5.60 each way for domestic flights, but which vary internationally. Additionally, itineraries with a long layover sometimes include $11.20 in taxes even on domestic itineraries (I did include one such example for analysis and it yielded results close to the average, though I generally avoided including such flights for analysis since the long layover rarely made them a reasonable selection for the stated criteria).
I then used a spreadsheet to subtract the taxes from the cash rate and divide it by the number of points required to book the flight as an award in order to determine the value per point for each flight in each fare class. Here’s an example of one route in one direction:
While the analysis here only gives us a glance at one sliver of time, it provided enough consistency through the data points as to provide a reasonable expectation as to the value of points.
Average values
At a high level, when considering all data points collected, here were key outcomes regarding the value of Rapid Rewards points in the observed data set:
- Average value: 1.39c per point
- Median value: 1.37c per point
- Minimum value: 1.27c per point
- Maximum value: 1.64c per point
Notably, the average and medium value were within 2 hundredths of a cent despite a range of almost 4 tenths of a cent between the minimum and maximum, indicating that the vast majority of data points were pretty close to the middle of the range. In other words, across all fare class, points are generally worth about 1.4c per point. We will thus maintain 1.4c per point as our Reasonable Redemption Value for Southwest Rapid Rewards points since this is the value you can reasonably expect to receive overall when using points.
That said, it is worth noting that depending on your usage patterns, you may find points to be worth a bit more or less.
For instance, while the above analysis included all fare types, the value per point increases a bit when only considering the cheapest “Wanna Get Away” fares:
- Wanna Get Away Average: 1.43c per point
- Wanna Get Away Median: 1.39c per point
- Wanna Get Away Minimum: 1.30c per point
- Wanna Get Away Maximum: 1.64c per point
Personally, I most often prefer to buy Wanna Get Away Plus fares since they qualify for a free same-day change. Those flights yielded slightly lower values than Wanna Get Away, but the difference wasn’t significant:
- Wanna Get Away+ Average: 1.4c per point
- Wanna Get Away+ Median: 1.38c per point
- Wanna Get Away+ Minimum: 1.29c per point
- Wanna Get Away+ Maximum 1.55c per point
Savvy travelers may utilize Southwest free same day changes to leverage the value per point offered by Wanna Get Away+ fares to book a fare yielding better value per point and then same-day change to a flight that may have offered lower value per point at the time of booking, but the analysis obviously didn’t consider any more advanced techniques such as this.
Generally speaking, opportunities to get higher-than-average value were found on flights costing less than $250 one way. Again, as the price of a flight decreased, the value per point generally increased.
How much are Southwest Rapid Rewards points worth?
Our Reasonable Redemption Value for Southwest Rapid Rewards points remains at 1.4c per point since both the average and median values round up to the same figure. While there are some opportunities to receive more value, it is reasonable to expect to get around 1.4c per point in most situations.
Some may assign slightly higher value to points when considering the fact that points bookings are highlight flexible in that they can be cancelled up until about 10 minutes prior to departure and in the event of cancellation the points are immediately returned to the member’s account and are available for use to book any flight for anyone, whereas flights booked with cash will yield a credit that in some cases (Wanna Get Away fares) can only be used to book travel for the originally-ticketed passenger.
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Apart from card open bonus / referral bonus , any other points u accumulate through spend to achieve the spend requirement to get companion pass, i consider those points as 2.8x per $.
Once i get the companion pass, i dont spend anything on my card, unless i get multiplier like 3x or 5x bonus spends.
Look at the table. Would the point values be clearer if they were expressed in pennies to one decimal place than the unrounded dollar values shown?
I wasn’t really intending for the table to be a key part of the post, just to show what it looked like.
A little related to this: I logged into my Southwest account this morning and found a promo for 3000 bonus points on $1K spend between Feb 01 and Mar 31 on my Rapid Rewards credit card. Must register. That essentially makes it a 4x card everywhere on the next $1K, and at this valuation puts it similar to 6.4% return on spend.
I always fly Southwest with a companion pass. If you include the companion pass, I would value the points at 2.8 cents for 2 people, 2.1 cents for 3 people, and 1.9 cents for 4 people flying in the group.
I love the Southwest companion Pass and we’ve long had one in my household, but your math is flawed there. The value of points
does not double when you have a companion pass. The points replace the same amount of cash.
Let’s keep the math simple: pretend a flight costs $100 or 10,000 points.
If you don’t have the companion pass, and you need two tickets, you can use 20,000 points to buy those two tickets or you can use $200 to buy those two tickets. In that case, using 20,000 points keeps $200 in your pocket. You’re getting 1c per point.
If you do have the companion pass, and you want to buy the same two tickets, you can use 10,000 points to buy those two tickets or you can use $100 to buy those two tickets. In that case, using 10,000 points keeps $100 in your pocket. You’re getting 1c per point.
Having the companion pass doesn’t double the value of your points any more than it doubles the money in your bank account. It’s a great deal for sure, but the fact that it works equally whether you’re using points or cash means that it replaces the same amount of cash either way.
Respectfully, I think your logic is flawed; the companion pass unlocks a higher redemption value. You have to compare the cost without the companion pass to the cost with the companion pass, having the pass doubles the value when flying with two people. This might be worth a discussion on the podcast, it reminds me of the travel is free (sort of) episode.
Nick is correct. Since the companion pass works equally with cash and points, the points per cent value does not change. Comparing the redemption value using the companion pass with points to not using the companion pass with cash is not apples to apples.
Companion pass is like a BOGO free coupon. The value is in the companion pass. It saves how much you spend using points/dollars
This has been discussed on previous podcasts and blog posts. (https://frequentmiler.com/no-the-southwest-companion-pass-doesnt-double-the-value-of-your-points/).
Another way to think about it is if you had the Sapphire Reserve and a Companion Pass and you were going to book a ticket for yourself and a companion on Southwest, would you rather book with Southwest points or through the Chase Travel Portal?
For Southwest points, the cost of an example $147.10 ticket is 9,434 points plus $5.60 (Which is actually good value at close to 1.5 cents per point). You transfer enough Chase points to Southwest from your Sapphire Reserve to book one ticket and then pay $5.60 to add your companion.
Alternatively, you can book yourself a ticket with the Chase Travel Portal at 1.5 cents per point if you have a CSR. This would be 9,812 Chase points with no additional cash cost. You can then add your companion for $5.60.
Would you rather pay 9,434 points plus $5.60 for yourself plus $5.60 for your companion with Southwest points or 9,812 points for yourself plus $5.60 with Chase points?
As you can see, the options are pretty much equivalent in cost. Barry above said two tickets with a Companion Pass is worth 2.8 cents per point. If that is so, how does buying the ticket through the Chase travel portal at 1.5 cents per point look just as good of a deal?
Given that you can readily buy gift cards at 10% off at Costco, this gives cash an advantage. Additionally, you dont earn rewards on award tickets.
Thus, points are worth less than 1.4 cents.
You should obviously take that into consideration if that’s your preference, but I disagree with you there.
Personally, I rarely consider using a gift card to pay for a flight because I want credit card travel protections.
Further, although I do have a Costco membership now for online purchases, I don’t live anywhere near a Costco, so for years I didn’t have a Costco membership and most people where I live don’t. Obviously my situation isn’t applicable for everyone, but the bottom line is that not everybody has a Costco membership and access to those discounted gift cards.
I further find points to be more valuable to me because it is much less of a hassle in the case of cancellation since points go back in your account immediately and can be used for anyone. After spending several hours booking and canceling and transferring flight credits to be able to buy tickets for five people recently, I find that to be much more hassle than the 10% discount is worth.
For those reasons, I find booking with points preferable to booking with cash. You do miss out on a tiny rebate in terms of points point that could be earned on a cash fare, but I don’t find those earnings to outweigh the strengths of points noted above.
Obviously you can and should adjust based on your own valuations of those factors.
I’ll add to that that my money is where my mouth is on that so to speak. I had a few thousand dollars in Southwest flight credit in my account from using airline incidental credits over the past couple of years and I didn’t even attempt to use that until I had exhausted our Southwest points balances to the point where I needed to use that credit to book flights. Like I said, the hassle of moving those credits around was the barrier that in practice made me book with points even though I had existing credit in my account – so I’m not just theoretically saying that I prefer points, my actual real life practice has been to use them ahead of Southwest credit.
Hi Nick, I agree with you regarding the 10% discounted Costco giftcard not being equivalent to cash in the same way we shouldn’t compare a Hyatt award booking with an “advanced purchase rate” since that cash booking option is non-refundable.
However, I do want to highlight the second part of Jason’s comment regarding opportunity cost of booking with cash and getting points (both from credit card and Southwest miles). I did notice in one of Greg’s recent posts that was discussing RRV of a hotel brand (I think it was Hyatt but can’t find the post now) and I saw the RRV calculated as (cash price – taxes/fees)/(points price + points you would have earned had you paid cash) which makes sense because you will earn points by booking cash both through the credit card and the loyalty program. Why isn’t this methodology used for airline RRV’s?
You can certainly factor it in if you want to. There are so many variables that we decided it was impossible to account for it in a meaningful way. For instance, if you’re going to book one or two flights a year, you likely won’t earn enough points to be able to redeem them for a flight – so the points earned from spend may be completely meaningless.
I think of Delta as being a good example of that for me. I don’t currently have Delta miles. I think I’ve maybe only once ever redeemed Delta miles. If my option for a Delta flight is to pay $200 or use 20,000 miles (presumably transferred from Amex for me). Let’s just say I could earn 1,000 Delta miles by paying for the flight and our RRV for Delta miles is 1.3cpp. Should I account for that as having earned $13 back? I certainly wouldn’t personally – those 1K miles are meaningless for me since I’m probably not going to fly Delta often enough to make use of them. They certainly aren’t worth thirteen bucks to me – they may expire unused.
Obviously many other people would make easy use of those miles – but then how do we account for it? The earnings on an individual paid flight are likely to be so insignificant for many people, so I personally almost never consider what I could earn by paying for the flight.
Again, you aren’t wrong to consider it – but I think it makes more sense to leave that to the reader to decide.