Southwest Airlines overhauls Rapid Rewards program

Goodbye, A-List and A-List Preferred.

Southwest Airlines is scrapping its two-tier loyalty program starting next year and instead rolling out silver, gold and platinum levels that are similar to what other carriers offer, as the once-quirky airline seeks to increase revenue and reward its biggest spenders.

Southwest executives have been overhauling the airline, getting rid of longtime customer perks like two free checked bags and open seating. It’s now charging for some of those options, like rivals have been doing for years.

Along with the shift from two to three loyalty levels, the carrier is also changing the names of its tiers. Under the old version, travelers could be classified into A-List or A-List Preferred, which was the higher level.

“If you think about A-List and A-List Preferred, we don’t even have [boarding] groups A, B and C anymore,” Tony Roach, Southwest chief customer and brand officer, said in an interview. “So it was time to do a refresh to somewhat incorporate all the changes to seating and all these new experiences that we’ve been adding.”

Here’s what’s changing for the loyalty program:

• A-List and A-List Preferred Rapid Rewards status levels will go away on Jan. 1.
• A-List customers will be shifted to Silver status in the Rapid Rewards program. A-List Preferred members will get Gold status.
• A new Platinum tier will be added for the airline’s “most engaged” customers.

Customers can earn 1 Tier Qualifying Point, or TQP, per $1 spent on Southwest co-branded credit cards with Chase. Here are the new status requirements:

• Silver status will require 35,000 TQPs or 25 qualifying flights. Previously, A-List was 35,000 points or 20 flights. For Silver members, the points-earning bonus on flights will go up from 25% to 40%.
• To earn Gold, customers will have to reach 65,000 TQPs, down from 70,000 points for A-List Preferred, or take 50 flights. The points-earning bonus for those with that status goes from 100%, or double points earning, to 60% on qualifying flights.
• The new, top-tier Platinum status requires 140,000 TQPs or 100 qualifying flights. Platinum members will get a 120% earnings bonus on qualifying flights.

Silver status members will board in Group 1, while Gold members will board before Group 1. Platinum members will board before both Gold members and Group 1. Platinum tier also has unlimited Companion Pass trips.

Southwest’s Companion Pass — which lets a designated person fly for free, minus taxes and fees, with a traveler who has that perk — is also changing.

Companion Pass holders that have them in their accounts will be able to hold onto them for the duration of their term. But starting with the 2027 earning year, Companion Pass benefits will be earned through TQPs or qualifying flights, by hitting a milestone reward or with Platinum status.

Currently, a Rapid Rewards member has to earn at least 135,000 qualifying points or 100 one-way flights to qualify for the pass.

The airline is also expanding its partnerships with international airlines and building its first airport lounges. Southwest on Thursday offered a peek into the new lounges, which it has named Icon, and is working on with its credit card partner, Chase. The carrier is building Icon lounges in four cities around the U.S., with others in the works.

Southwest is also adding benefits for customers that are in between status tiers, similar to what American Airlines offers.

For example, after earning 20,000 points or taking 15 qualifying flights, customers can choose between 2,000 more Rapid Rewards points or two coupons to select a “preferred” seat, which is a standard legroom seat that’s closer to the front of the plane or a more popular aisle or window seat.

Customers will also get three Companion Pass trips after earning 95,000 points or taking 75 qualifying flights, which is below the Platinum threshold.

“That is definitely different from what we’ve done before,” said Nandika Suri, who heads Southwest’s Rapid Rewards loyalty program. She said the new strategy is “a way for us to actually recognize and reward customers … faster and more frequently in their journey to continue to engage with us.”

Airlines overall have consistently raised the requirements to earn status, requiring more spending, and have made similar changes to enter their airport lounges.

United Airlines on Tuesday said it would no longer allow customers to earn status in its Mileage Plus program based on flight segments next year and that it would only accept Premier qualifying points, which are earned from flight spending and on a co-branded credit card.

United also raised the requirements to reach Premier 1K, its highest frequent flyer tier outside of the invite-only Global Services, to 32,000 qualifying points, up from 28,000 this year.

— CNBC’s Caleigh Keating contributed to this article.