US government orders big US airlines to explain their frequent-flyer programs

The Biden medication is examining the 4 largest U.S. hose frequent-flyer programs and however they devalue points that consumers person earned and often alteration the fig of points oregon miles needed to publication flights.

Transportation Secretary Pete Buttigieg wrote to the CEOs of American, Delta, Southwest and United connected Thursday, asking each for a study connected policies, fees and different features of their loyalty program.

Consumers often kick that airlines rise the fig of points needed to gain a escaped formation and bounds the fig of seats that tin beryllium purchased with points.

Buttigieg said loyalty programs bring worth to consumers, and radical number connected them to wage for vacations and trips to sojourn family.

"But dissimilar a accepted savings account, these rewards are controlled by a institution that tin unilaterally alteration their value," helium said successful a connection issued by the Transportation Department. "Our extremity is to guarantee consumers are getting the worth that was promised to them, which means validating that these programs are transparent and fair."

Delta said loyalty of members successful its frequent-flyer programme "means everything to us, and providing a meaningful rewards acquisition is the apical precedence wrong Delta's SkyMiles Program." Southwest highlighted that its points ne'er expire, and said it books much seats with points than different airlines.

Airlines for America, a commercialized radical that represents each 4 carriers targeted by Buttigieg, said millions of radical bask participating successful the loyalty programs.

"U.S. carriers are transparent astir these programs, and policymakers should guarantee that consumers tin proceed to beryllium offered these important benefits," a spokesperson for the radical said.

Frequent-flyer programs were erstwhile based connected the fig of flights taken oregon miles flown. In caller years, however, they person been fueled by spending that consumers behaviour utilizing airline-branded recognition cards. Income from the recognition paper issuers has go an important root of hose revenue.

The Transportation Department and the Consumer Financial Protection Bureau held a proceeding successful May connected the hose programs, astatine which they raised galore of the issues covered successful Buttigieg's missive to hose CEOs. Witnesses included user advocates and officials from 3 smaller airlines, but nary representatives of the large 4 airlines that are covered by the caller inquiry.

One of the advocates who testified, Erin Witte of the Consumer Federation of America, said frequent-flyer programs started arsenic a reward for consumers who were loyal to 1 airline.

"It's ironic that galore of them person morphed into programs that are thing but loyal to their customers and alternatively marque radical consciousness similar they request an security argumentation to support the points they person earned," Witte said Thursday. She said she was gladsome the Transportation Department is examining the programs.

The consumer-protection committee said successful a study for the proceeding that it received much than 1,200 complaints astir recognition paper rewards past year, an summation of much than 70% from pre-pandemic levels. Many hotels, retailers and different businesses besides connection loyalty programs with recognition cards.

Buttigieg ordered the airlines to study wrong 90 days connected matters including however constituent values are determined, immoderate fees that consumers indispensable pay, and details of deals with banks that bargain miles from airlines and usage them to promote radical to store with their recognition cards.

The bid asks airlines to database immoderate changes successful their programs since July 31, 2018, including however each alteration affected the dollar worth of reward points.