Here's How Southwest's Variable Award Pricing Works

Southwest has made a quiet but significant change to how it prices award flights — and unfortunately, it’s not great news for Rapid Rewards members.

While Southwest has always used a form of dynamic pricing (where award rates roughly reflect the cash price of a ticket), the airline is now going all-in on fully variable pricing based on demand. That means your points are worth more during off-peak times when flights are cheap and less during high-traffic travel periods.

Let’s dig into the numbers to see how this change affects the value of your Rapid Rewards points, and why flexible travel credit card points may be your new best friend.

Southwest’s New Pricing Structure

Under the old system, Rapid Rewards points were consistently worth about 1.3 cents apiece toward Southwest award flights. With dynamic pricing in play, that consistency is completely gone.

Take these two one-way flights from Baltimore (BWI) to Chicago (MDW):

• One flight costs $115 or 8,000 points — that’s a value of 1.4 cents per point, which is actually slightly better than before.

• Another flight on the same route is priced at $209 or 16,500 points — now you’re looking at just 1.2 cents per point.

So while the system is technically still tied to the cash price, the gap between low-demand and high-demand flights is widening, making it harder to consistently get good value for your points.

Off-Peak Flights

Let’s not write Southwest off completely. Some off-peak redemptions still offer solid value.

For example, a short-haul flight from San Francisco (SFO) to Los Angeles (LAX) runs $89 in cash or 5,500 points. After factoring in the $5.60 in taxes, you’ll be getting a respectable 1.5 cents per point.

That’s actually better than the old average. But let’s be real — how often are you cashing in your points for an $89 flight? Most of us save points for more expensive redemptions, and that’s where this new pricing model stings the most.

Peak Travel

Flying during busy periods like school breaks or holidays? Get ready to drain your points.

Let’s say you’re flying over Thanksgiving weekend from New York (LGA) to Dallas (DAL). That ticket might cost $464 in cash or a whopping 41,500 points.

That translates to just 1.1 cents per point, which is just a super low value. And sadly, this is the kind of return you can expect more often with Southwest’s new award chart.

Why Flexible Points Are More Valuable Than Ever

As more airlines shift to more dynamic award pricing, diversifying your rewards with points that can transfer across multiple airlines is a lot more appealing.

Flexible rewards programs like Chase Ultimate Rewards, American Express Membership Rewards, or Capital One miles give you the freedom to shop around for the best redemptions, even when a program like Southwest drops the ball.

For example, the Capital One Venture Rewards Credit Card has a pretty sweet offer right now: Earn 75,000 miles once you spend $4,000 on purchases within 3 months from account opening, equal to $750 in travel.

You could transfer those miles to Turkish Airlines and book a United flight from Boston (BOS) to Honolulu (HNL) for just 10,000 points instead of burning 30,000 to 50,000 Southwest points for the same route. As long as there’s saver-level award availability, that price is fixed.

Bottom Line

The days of easy, reliable redemptions with Southwest are sadly slipping away. Yes, you can still find good deals, especially during off-peak times, but you’ll have to hunt for them. As someone who’s been loyal to Southwest for years (and has a decent amount of points saved up), this stings.

If you’re still loyal to Southwest, try to be flexible with your travel dates and pounce on deals when they pop up. But if you want to maximize the value of your points, load up on flexible rewards, explore transfer partners, and let your travel credit cards work their magic.