Frequent-Flyer Programs Under Federal Scrutiny

The Biden administration is currently looking closely at US airlines’  frequent-flyer programs. These programs are under federal scrutiny regarding how airlines devalue points travelers have earned. 

Transport Secretary, Pete Buttigieg, wrote a letter to the chief executives of American, United, Southwest, and Delta on Thursday. In this letter, the transport secretary is inquiring about features of these loyalty programs. This includes policies and fees related to these frequent-flyer programs. Information from this inquiry could result in future policy changes. 

Passengers have often complained about airlines hiking the necessary points for free flights. Some airlines, on the other hand, limit the number of seats that travelers can avail using these points. 

Transparency on Frequent-Flyer Programs

Buttigieg said that these programs bring value to travelers. Some even rely on them for vacations and trips. In a statement by the Transportation Department, he said, “But unlike a traditional savings account, these rewards are controlled by a company that can unilaterally change their value.” 

He also added,  “Our goal is to ensure consumers are getting the value that was promised to them, which means validating that these programs are transparent and fair.”

Airlines for America, a trade group representing all four carriers, said in a statement, “U.S. carriers are transparent about these programs, and policymakers should ensure that consumers can continue to be offered these important benefits.” 

Delta said that its program “means everything to us, and providing a meaningful rewards experience is the top priority within Delta’s SkyMiles Program.”

Southwest, on the other hand, said that it takes “great pride in our award-winning Rapid Rewards program, which includes flexible travel policies and unmatched availability of award seats.”

Consumer Financial Protection Bureau, in a report for the hearing, said that it received 1,200 complaints pertaining to credit card rewards last year. That’s 70% higher than pre-pandemic levels. However, this report doesn’t just cover airlines’ loyalty programs. It also includes other businesses such as hotels offering loyalty programs.