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Southwest Revamps Frequent-Flier Program

“I only need 2,000 miles to make it to the next elite level on American,” he said of his airline frequent-flier status for 2011. “Any suggestions?”

I looked at my watch. “Simple,” I said. “Hustle over to the airport right now, get on a plane and fly 2,000 miles somewhere by midnight, pal.”

For many business travelers who carefully tend to their frequent-flier programs, the new year is often a time of high anxiety. Especially for those who fly often, frequent-flier programs are complicated and sometimes perplexing, and never more so than when it comes to ensuring that you have racked up enough actual flying miles by the end of one year to qualify for a specific level of elite status the next.

Southwest Airlines, alone among the major carriers, has always made simplicity a selling point. Easy to book, easy to change itineraries without a penalty fee, no charge to check a bag. Likewise, its Rapid Rewards frequent-flier program, introduced in 1987, has been as simple to use as a pizza parlor coupon book. Take 16 flights, get one free.

So why has Southwest spent $100 million to redesign Rapid Rewards, introducing better benefits, for sure — but also adding a lot more complexity?

Quite simple, said Gary C. Kelly, the chief executive. Southwest Airlines established itself as a popular short-haul, point-to-point carrier, but its strategy in recent years has been to add longer haul routes in an aggressive push to lure business travelers from the network carriers. In talking to business fliers who use other airlines to determine how they might be persuaded to become loyal Southwest customers, Mr. Kelly said, “Consistently, they told us the No. 1 thing that we could do is to enhance our frequent-flier program.”

Southwest has always carefully tended its reputation for excellent customer service and low fares, though competitors often match the fares, if not always the service. Southwest has a fleet of 541 Boeing 737s, in models that seat up to 137 people. Recently, Southwest announced that it was buying 20 new 737-800 models that can seat up to 189, for delivery in 2012, as part of its expansion of longer-haul routes out of major business travel markets.

Essentially, the program is built around awarding points based not on trips flown, but on money spent. Customers who buy the more expensive “business select” fares, for example, receive more points than those who opt for cheaper fares.

One new feature that Southwest is strongly emphasizing is that there are “absolutely no blackout dates” for award redemptions as there are on other airlines. Points can be redeemed for award seats on any date, any flight. (Details of the new Rapid Rewards program changes can be found at a Southwest Web site, www.newrapidrewards.com.)

Southwest’s planes, which have been flying less full in recent years as competitors’ flights have become jammed, are now flying close to the high occupancy rates of the other domestic carriers. In December, for example, Southwest’s planes were 80.4 percent full on average, up 4.2 percentage points from December 2009. Southwest carried 7.1 percent more passengers in December 2010, with only a 5.6 percent increase in available seats. This suggests that to keep its pledge, assuming demand grows, Southwest may need to give away a certain number of seats that it could sell.

In my opinion, frequent business travelers will find many things to like about the new Southwest frequent-flier program, which takes effect March 1. Competitors acknowledge that Southwest is aggressively moving to take a share of their lucrative business travel markets and that they are impressed. But of course, they do have some skepticism. They note, for example (ahem), that Southwest does not have premium-class cabins to provide those upgrades that motivate elite-status customers.

Nor does Southwest have international destinations, though its planned acquisition of AirTran will add some Caribbean routes. The new frequent-flier program does enable holders of a Rapid Rewards credit card to redeem points for international flights on other carriers, but these will basically be booked by third-party travel agents.

“Delta SkyMiles offers program amenities frequent fliers want most, like a first-class cabin, unlimited complimentary upgrades and a robust international network,” said Chris Kelly Singley, the general manager for corporate communications at Delta Air Lines.

As for my friend, Tom Miller, he briefly toyed with the idea of a quick trip but decided that we should have dessert instead. “It isn’t worth the tsoris,” he said.

E-mail: jsharkey@nytimes.com

Southwest’s New Rewards Plan Dismays Some Loyalists

The announcement was about priority in boarding the airplane. It might as well have been about the seating protocol for dinner at Versailles in the 18th century. There seemed to be about 10 degrees of hierarchy, starting with first class and military in uniform, followed by three categories of elite status, plus various levels of status on partner airlines, and then lesser tiers determined by things like what kind of a credit card travelers used.

Whew, I thought, standing in the well-ordered Southwest queue, I’m glad to be out of that rat race.

This is the first year in the last dozen that I do not have any airline elite status, a stratified peerage system where status level is determined by the number of miles flown each year.

This year, I have abdicated my rank, though with fond memories of the good old days — when airplanes weren’t so full and elite status usually got you a free upgrade to first-class from a cheap coach ticket. Back then, I sometimes had top-level Platinum status on Continental Airlines. It was swell.

But then I considered, with the wisdom one achieves with advanced age, what I had had to go through to acquire that status. Oh, what a scramble used to ensue to hit those mileage-flown benchmarks by Dec. 31 to requalify for elite status for the coming year.

In December 2004, for example, to get the last 11,300 miles, I embarked on a two-day marathon, a cheap-fare itinerary arranged as a year-end mileage run. Mileage runs are trips intended specifically to rack up extra elite-status miles at the cheapest possible fare, with no regard to destination.

I made that mileage run in two exhausting days: Newark to San Francisco to Houston to Seattle to Anchorage, then to Seattle again and back to Newark. Yes, I earned Platinum for 2005, but I also earned derision from some sensible people, my wife among them, who wondered why any sane person would do such a thing.

Status, was why. The next year, I needed 23,000 miles and I concocted a three-day itinerary that would have required eight stops, including two in Tokyo. But my wife said, “Don’t you dare.” Prudently, I listened.

So, as I said, no more. Now I live near an airport where Southwest Airlines makes the most sense for me to fly. And Southwest, famously, does not play the annual status game, or at least at the level of intensity, or in the same wearisome manner, that the other major airlines play it.

Or does it?

Southwest is now making a major push to increase its share of the lucrative business travel market. As part of that drive, Southwest this year announced an overhaul of its Rapid Rewards frequent-flier program, previously famous for its simplicity. One benefit in the program resembled a pizza parlor coupon promotion: Buy 16 flights, get one free.

Starting March 1, a new Rapid Rewards program takes effect. Its details are complicated; its revenue rationale is simple. “When you buy certain fare products, you earn more points,” Ryan Green, Southwest’s director of customer loyalty, explained when the revision was announced in January.

For my trip to Washington on Southwest, I flew from Tucson on a Business Select fare — a fully refundable, $958 round trip. The cheapest Southwest fare, called Wanna Get Away, wasn’t available for the times I needed — probably because Southwest’s planes have been flying at their fullest in recent months. By comparison, the coach fares for the same trip on either Continental or United ranged from $904 to a hilarious $1,999, and would not have been refundable if, as turned out to be the case, I needed at the last minute to change my departure by a day.

Business Select also got me priority boarding, meaning that I was able to grab exit-row seats with extra room that allowed me to work on my laptop. I no longer have that benefit on Continental or United.

Anyway, we shall see how it goes, as Southwest layers on complexity and revises its loyalty program. For now, there is considerable dismay from some Southwest loyalists who think the game is being rigged to introduce a new form of de facto elite status, to “reward people for buying higher fares,” as one disgruntled customer complained recently on the airline’s blog.

E-mail: jsharkey@nytimes.com

Alexandria, LA (AEX) to Houston, TX (IAH


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