What is the value of Southwest Airlines Rapid Rewards Miles?

Note: this post addresses the older version of the SWA Rapid Rewards program which is no longer offered.  Unless you are an airline historian, you should really be reading our new post, “How Much Are Southwest Airlines Points Actually Worth?“.

To earn a Standard Award good for one free roundtrip ticket on Southwest Airlines requires 16 credits. You earn 1 credit for each one-way leg of a trip. So, 8 round-trip flights would earn you a free Standard Award from the Rapid Rewards Program.

Southwest logo

Standard Versus Freedom Awards

Southwest Airlines’ Rapid Rewards Program offers two types of rewards, Standard and Freedom. As you might surmise, Standard Awards have blackout dates and other restrictions. Freedom Awards give you much more travel flexibility—if the seat is available, its yours. Of course the catch is that Freedom Awards require twice as many credits—32 to be exact—to earn.

Key Assumptions in Estimating the Value of the Southwest Airlines Rapid Reward Program

While there are many factors to consider in this type of analysis, PlasticIQ has tried to call out some of the major assumptions driving the value estimation:

  • For the market price of tickets, we use the average US ticket price, since Southwest primarily flies within the US. Check out PlasticIQ’s Detailed Analysis of Flight Costs for more imformation.
  • We assume that all travel is done via Standard Awards. This of course limits your travel flexibility and requires you to plan well in advance.
  • PlasticIQ assumes that you can successfully book Standard Awards during the high season only 25% of the time, with the remaining 75% of bookings occurring in the low season.
  • As Southwest Airlines awards credits and not miles or points (16 credits earns you a Standard Award), calculating the value of a credit is of limited value, since it can’t be compared very easily with other frequent flier programs. To address this, we look at the Southwest Airlines credit card, which provides the number of points (referred to as “Rewards Dollars”) to earn 1 credit—1,200 points in this case. Doing some simple math, we see that 19,200 points earns you a free round-trip economy ticket. By dividing the market price of a ticket by 19,200, PlasticIQ can estimate the true value of the Southwest Airlines Rapid Rewards Program.
  • PlasticIQ applies a 5% non-cash penalty to adjust for the fact that cash earnings are always superior to non-cash earnings, all else equal.
Estimated Monetary Value of Southwest Airlines Rapid Rewards Credits (Standard Awards)
From To Class Season Mkt ticket price Credit Req’d for RT Ticket Points Req’d per Credit $ Value/Point % Travel Contribution
US US Economy Low $268 16 1,200 $0.0139 75% $0.0105
US US Economy High $330 16 1,200 $0.0172 25% $0.0043
Total pre-penalty $0.0148
Post 5% penalty $0.0140

Thus, you can see that we estimate the value of Southwest Airlines Rapid Rewards dollars (which convert to Southwest credits at the rate of 1,200:1) at about $0.0140 per dollar.  This is a very compelling value for an airline rewards program!

Check out PlasticIQ’s Frequent Flyer Mileage Valuation Comparison to see how the Southwest Airlines Rapid Rewards Program stacks up against other frequent flyer programs. Of course, different airlines enjoy different reputations (e.g. # of direct flights, % on-time, courteous staff, etc), so you will want to take those factors into account when deciding which program(s) to focus on. Consider PlasticIQ’s work as the financial side of the equation, which means one less thing for you to figure out!

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