Last week, the blogs (and even mainstream press) carried the really good news that Southwest and Chase were offering a sign-up bonus that gave 30,000 points – and the awesome Southwest Companion Pass! While this is good news for people that want the pass for this year and can only get one Chase card, it may have also been a great strategy for how Southwest is going to deal with the launch of Hawaii flights and all of those people with the Companion Pass.
Southwest’s Latest Move May Be a Smart One for Hawaii and the Southwest Companion Pass
There has been a lot of speculation and even worry about the upcoming launch of Hawaii flights with Southwest, in relation to the Southwest Companion Pass. This is due to the fact that having the Southwest Companion Pass could unlock some unbelievably good deals for travel to Hawaii. Would Southwest limit the use of it on flights for Hawaii? Would it be business as usual?
With the new credit card offer launch, I think they may have just made a really smart move in how they will handle the Companion Pass for Hawaii flights. Let’s break it down.
The Problem for Southwest for Hawaii and the Companion Pass
For Southwest to be competitive, they are going to have to come close to matching other airlines’ prices for Hawaii flights. The problem is that these flights are typically popular and having people with the Companion Pass bringing along someone for free is going to take away valuable seats that Southwest could easily sell.
But, if Southwest were to limit these flights from Companion Pass eligibility, they would really anger a lot of their flyers. Southwest has constituently tried to not do that in their approach to things like baggage fees (there are none for 2 bags) and change fees (there are none).
So, how does Southwest continue to offer great value to Companion Pass holders while not losing a ton of money on these Hawaii flights?
Time to Clear the Decks for Southwest Companion Pass Through Credit Cards!
The easiest way would be to eliminate the eligibility of credit card sign-up bonuses towards qualification for the Southwest Companion Pass. The problem with that is that Southwest has actually just started advertising that this is possible so it would be a really hard about-face to all of a sudden exclude that.
The next best thing would be to launch a credit card offer that is so enticing that people have to sign up. The flip side? Limit the offer so that it does not extend too far.
And this is what Southwest and Chase have done! This latest offer gives the Southwest Companion Pass as part of the sign-up bonus but limits its validity to just 2019 (where normally, the Southwest Companion Pass is good for the year it is earned and the next year).
What Does This Offer Do for Southwest?
Since Chase now limits customers to one card bonus from a card family every 24 months, signing up for the latest Southwest personal credit card offer will prevent you from getting another sign-up bonus on any of the 3 personal cards for 24 months. This means the only sign-up bonus that these customers can get for Southwest for the next 24 months would be the business card offer.
This will severely limit the number of people who will be able to earn the Southwest Companion Pass through credit card bonuses for the 2020/2021 timeframe. For Southwest, this could be great news for their Hawaii flights since that will be the timeframe when they are really getting those flights up and going and attracting paying customers.
But, Can You Still Earn the Southwest Companion Pass for 2020 with This Offer?
Fortunately, you are also earning 30,000 points with the current Southwest personal card offer. This means that you “only” need another 80,000 points by December 31, 2019 to earn the Southwest Companion Pass for 2020 as well.
The Southwest Business credit card offers 60,000 points so that would get you most of the way there and then the spending required to get both the personal and business bonuses would help even more.
If you are going for this offer, I would strongly consider getting the Southwest Business card this year as well so that you get the pass for 2020 as well. Otherwise, you will need to wait until the spring of 2021 before you can get another Southwest personal card bonus.
I am not sure if I am just reading too much into this offer or not but it strikes me as unusually generous just before Southwest is anticipated to start offering flights to Hawaii. I would actually think I am pretty close to the reasoning behind this offer and I think it is genius of Southwest in their marketing of it.
This gives them some room to get paying customers and the customers that earn the Southwest Companion Pass by actual spending for their first full two years of Hawaii flights while also getting a lot of new credit card customers for 2019.
If you do apply for the current offer, you can still be smart about it and be prepared for Hawaii flights with Southwest Companion Pass by getting the Southwest business card as well. This way, you will have the Southwest Companion Pass for 2019 and 2020. By the way, with an expiration date on the offer of February 11, think it may be a safe guess that Hawaii flights will be announced right after that? 🙂
What do you think of this idea? Smart or just coincidental?
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