The U.S. Department of Transportation announced an inquiry into America’s four biggest airlines on September 5, 2024, ordering information about their loyalty programs to protect customers from “potential unfair, deceptive, or anticompetitive practices.”
Transportation Department Evaluating “Fairness, Transparency, Predictability, and Competitiveness”
In announcing the probe of American Airlines AAdvantage, Delta Air Lines SkyMiles, Southwest Airlines Rapid Rewards, and United Airlines MileagePlus, Transportation Secretary Pete Buttigieg said while many flyers rely on their airline rewards for their travel, it’s important to ensure fairness across the board.
“Points systems like frequent flyer miles and credit card rewards have become such a meaningful part of our economy that many Americans view their rewards points balances as part of their savings,” Buttigieg said in a statement. “But unlike a traditional savings account, these rewards are controlled by a company that can unilaterally change their value. 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.”
The Transportation Department is demanding each airline submit information in four key categories to learn more about how they do business with the public. The first area investigates the devaluation of points, which can come in the form of charging more points for award flights, adding blackout dates, limiting who can use points, or adding expiration dates.
The agency also wants to know about hidden and dynamic pricing, along with extra fees charged by the airline to book award travel. Regulators are concerned that without transparency between the dollar value of points as it applies to air travel, flyers don’t truly know the value of their points as they collect and use them. Moreover, additional fees associated with using and maintaining their points could create additional devaluation for flyers.
Finally, the DOT is asking airlines to provide information about their previous mergers, and how airlines integrated merged rewards programs, partnerships, and “how they monitor, analyze, and/or react to other airlines’ competing rewards program.”
The Transportation Department is requesting information from the four carriers by December 4, 2024. The airlines have not provided a public response to the probe’s requests.
Source: frugal travel guy