When Southwest dropped its open seating and began selling seat assignments, it also made a number of other policy adjustments. That included a pretty major change to how flight credits work.
As a frequent Southwest Airlines flyer, I had taken for granted that flight credits lasted forever. But then the airline switched things up.
“Flight credits are funds you can use toward future airfare. Flight credits created on or before May 27, 2025 do not expire. Flight credits created from reservations booked or changed on or after May 28, 2025 have a specified expiration date. All travel must be completed by the expiration date,” the airline shared on its website.
It’s not a small change because now that I fly much less often, if I have to cancel a flight, I may not have plans that require air travel before my credit expires. That could force me to take a less-than-necessary trip, or result in me losing what I originally paid.
How do Southwest Airlines credits work?
Southwest shared when a flight credit would be issued on its website.
You may receive a flight credit when:
- You cancel a flight.
- You downgrade your fare.
- You cancel a purchased seat as part of a flight cancellation.
The airline also shared how you use those credits.
“When booking a flight, choose the option to apply a flight credit on the payment screen and enter the confirmation number associated with the flight credit,” the airline posted.
- Each Passenger can use a total of three forms of payment per booking, and each flight credit counts as a form of payment.
- If you have more than one flight credit associated with the same confirmation number (if you received a flight credit for a purchased seat), you will need to enter each flight credit separately.
- All travel must be completed by the expiration date of the flight credit.
When do Southwest Airlines flight credits expire?
When your flight credit expires depends upon how you paid for your flight and what class of ticket your purchased.
This is how they work for the more expensive Choice Preferred or Choice Extra fares:
- Booked with a credit card, PayPal, Apple Pay, Flex Pay, or Klarna: Transferable Flight Credit will expire 12 months from the date you originally booked the reservation.
- Booked with a Southwest LUV Voucher: Transferable Flight Credit will adopt the expiration date of the voucher used to book the reservation.
- Booked with a flight credit or Transferable Flight Credit: Transferable Flight Credit will adopt the earliest expiration date of any flight credit used to book the reservation.
- Booked with a gift card: Transferable Flight Credit will not expire.
For the cheaper, Choice fares, it works a little differently:
- Booked with a flight credit or Transferable Flight Credit: Transferable Flight Credit will adopt the earliest expiration date of any flight credit used to book the reservation or will expire 12 months from the date you originally booked the reservation, whichever comes first.
- Booked with a gift card: Transferable Flight Credit will expire 12 months from the date you originally booked the reservation.
There is one caveat to all of these rules.
“If your flight is significantly disrupted and you cancel your reservation and choose a flight credit or Transferable Flight Credit (depending on the type of fare purchased), your flight credit or Transferable Flight Credit will be valid for five years from the date you originally booked the reservation,” according to Southwest.
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Here’s how to extend a Southwest Airlines flight credit
View From the Wing’s Gary Leff explained how Southwest passengers can hack the Flight Credit system.
“Southwest’s ticketing rules create a way to make non-transferable credits transferable. And frequent flyer experience shows that adding even a small amount from a Southwest gift card to a credit can create a transferable credit with no expiration date,” he wrote.
Leff walked his readers through the process:
The original passenger should:
- Book a Choice Preferred or Choice Extra ticket in the name attached to the old credit.
- Apply the nontransferable credit to that reservation.
- Cancel at least 10 minutes before departure and return the funds as a flight credit.
- Find the new credit under My Account, then View Travel Funds, and select Transfer.
“Both people must have Rapid Rewards accounts. Southwest requires the entire credit to be transferred, allows only one transfer, and the transfer can’t be reversed. The recipient gets a nonrefundable credit. You can do this even with a credit from a Basic ticket. But that doesn’t reset an expiring credit,” he added.
Leff also noted that the company’s new business model accounts for some credits not being used.
“The airline recognizes revenue when credits go unused. It recently made a $285 million flight breakage adjustment: It had assumed 15% of credits would expire, while newer data suggested 12%. Breakage is part of the model,” he added.
Why Southwest changed its flight-credit policy
Southwest has moved to a model with more ancillary revenue, and the Q2 filing explicitly says changes to flight-credit policies affected customer redemption behavior and breakage estimates.
While I preferred the old no-added-fees, open-seating model, Southwest’s changes have worked, according to comments made by CEO Robert Jordan during the company’s second-quarter earnings call.
“Our business now benefits from a broader and more diversified set of revenue and commercial levers than at any point in our history,” he said. “The results demonstrate that the transformation is working.”
He noted that the airline generated nearly $2 billion in operating cash flow during the first half of the year despite a “record” $900 million year-over-year increase in second quarter fuel expense.
Atmosphere Research Group President Henry Harteveldt thinks Southwest made the right moves, even if some passengers don’t like the changes.
“When combined with its assigned seats, extra-legroom seats, and its improved on-time performance, returning to free checked bags — even if limited to one free checked bag — for all passengers could give Southwest an enormous competitive advantage in the marketplace,” he told The Washington Post.
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