Southwest Airlines revises its Rapid Rewards program

Goodbye, A-List and A-List Preferred.

Southwest Airlines is abandoning its two-tier loyalty program starting next year and instead rolling out Silver, Gold and Platinum tiers similar to those offered by other carriers, as the once-quirky airline seeks to boost revenue and reward its biggest spenders.

Southwest executives have overhauled the airline, eliminating long-standing customer perks like two free checked bags and open seats. It now charges for some of these options, as its competitors have done for years.

Along with moving from two to three loyalty tiers, the carrier is also changing the names of its tiers. In the old version, travelers could be classified as A-List or A-List Preferred, which was the highest level.

“If you think about A-List and A-List Preferred, we don’t even have A, B and C (boarding) groups anymore,” Tony Roach, Southwest’s chief customer and brand officer, said in an interview. “So it was time for an update to somewhat incorporate all of the changes to the seats and all of these new experiences that we’ve added.”

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

• The A-List and A-List Preferred Rapid Rewards status tiers will disappear on January 1st.
• A-List customers will upgrade to Silver status in the Rapid Rewards program. A-List Preferred members will achieve 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, for every dollar spent on Southwest co-branded credit cards with Hunting. Here are the new status requirements:

• Money status will require 35,000 TQP or 25 qualifying flights. Previously, the A-List had 35,000 points or 20 flights. For Silver members, the points bonus on flights will increase from 25% to 40%.
• To win Gold, customers will need to reach 65,000 TQP, compared to 70,000 points for A-List Preferred, or take 50 flights. The points bonus for those with this status increases from 100%, or double the points earning, to 60% on eligible flights.
• The new high-end Platinum status requires 140,000 TQP or 100 qualifying flights. Platinum members will receive a 120% revenue bonus on eligible flights.

Silver status members will board in Group 1, while Gold members will board before Group 1. Platinum members will board before Gold members and Group 1. Platinum level also offers unlimited travel with the Companion Pass.

Southwest’s Companion Pass – which allows a designated person to fly for free, minus taxes and fees, with one traveler receiving the benefit – is also evolving.

Companion Pass holders who have them on their account will be able to keep them for the duration of their mandate. But starting in the 2027 award year, Companion Pass benefits will be earned through qualifying TQPs or flights, reaching a milestone award, or with Platinum status.

Currently, a Rapid Rewards member must 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 preview of the new lounges, which it called Icon, and which it is working on with its credit card partner, Hunting. The carrier is building Icon Lounges in four U.S. cities, with more on the way.

Southwest is also adding benefits for customers who fall between two status levels, similar to what American airlines offers.

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

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

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

Overall, airlines have steadily raised the requirements for status, requiring more spending, and have made similar changes to access their airport lounges.

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

United also increased the requirements to reach Premier 1K, its highest loyalty tier outside of global invitation-only services, to 32,000 qualifying points, up from 28,000 this year.

—CNBC Caleigh Keating contributed to this article.