WASHINGTON, D.C.: The U.S. government is scrutinizing the frequent-flyer programs of the four largest airlines-American, Delta, Southwest, and United-due to concerns over how points are valued and frequent changes to reward systems.
Transportation Secretary Pete Buttigieg has asked the airlines to provide detailed reports on their policies, fees, and how they manage loyalty programs to ensure these programs are transparent and fair to consumers.
Travelers often voice frustration that airlines regularly increase the number of points required for flights and limit seat availability for reward bookings.
“But unlike a traditional savings account, these rewards are controlled by a company that can unilaterally change their value,” Buttigieg said in a statement issued by the Transportation Department. “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.”
Delta responded by stating that member satisfaction is a top priority for its SkyMiles Program, while Southwest highlighted that its points never expire and that it books more reward seats than other airlines. The airlines’ trade group, Airlines for America, noted that millions of people benefit from these programs and said that carriers are transparent about how they operate.
Frequent-flyer programs were once primarily based on miles flown, but now they largely revolve around spending via airline-branded credit cards. This shift has turned credit card partnerships into a major revenue stream for airlines.
In May, the Transportation Department and the Consumer Financial Protection Bureau held a hearing on airline loyalty programs, with testimony from consumer advocates. Erin Witte of the Consumer Federation of America criticized the programs for straying from their original intent, saying, “It’s ironic that many of them have morphed into programs that are anything but loyal to their customers and instead make people feel like they need an insurance policy to keep the points they have earned.”
She said she was glad the Transportation Department was examining the programs.
Buttigieg has given the airlines 90 days to report on how they determine point values, fees, and any recent changes that affect the dollar value of reward points.