They started out well. But here are 5 key ways airline loyalty points schemes are screwing you now.

What went wrong with airline frequent flyer programs?

Dissatisfaction with loyalty programs has reached a fever pitch. It has become crystal clear that for many airlines, the loyalty has only been flowing from customers, not to them. 

This realization has even spurred unprecedented action in Washington—perhaps because lawmakers are often frequent flyers, too.

Earning miles has never been easier, while burning miles has never been harder.  Loyalty programs have effectively devolved into pyramid schemes.

Five ways airline miles programs went wrong

If you’ve been collecting miles for more than a few years, you’ve undoubtedly noticed all of the following trends.

1) The goalposts on redemption keep getting pushed further and further back.

Members join in good faith and remain loyal to a given airline for years, if not decades, but then the rules change mid-game, and the amounts of miles or points for trips and upgrades is constantly being hiked.

What’s more, availability becomes tougher, as Frommer’s and others have noted in recent years. In 2023, Delta announced draconian changes, including making it harder to achieve elite status in SkyMiles and denying access to airport lounges. This was followed by American announcing consumers could earn miles only on bookings from “preferred” travel agencies. In both cases, the outcry forced Delta and American to backtrack—at least for now.

Last year, Sen. Dick Durbin (D-Ill.) and Sen. Roger Marshall (R-Kans.) introduced the Credit Card Competition Act, and they publicly linked it to airline award programs by stating that airlines are engaged in “unfair, abusive, and deceptive practices” regarding their loyalty programs, including devaluing points. 

In fairness, it’s worth noting that Southwest Airlines responded to other carriers’ negative publicity by actually making redemption a bit easier.

2) Airline consolidation has meant the membership has expanded, and in some cases even doubled, thanks to mergers and acquisitions.

If you’re a frequent flyer on American Airlines, you’re not just competing with other AAdvantage members. Because over the years, that program has also subsumed multiple other carriers such as US Airways, America West, TWA, etc. Yet American, of course, is not operating as many flights as those four airlines operated combined used to fly, so naturally, the availability of miles and redemption has not kept pace.

In May, the U.S. Department of Transportation and the Consumer Financial Protection Bureau held a joint public hearing on airlines and credit card reward programs. Panelists included Ultra Low Cost Carriers Allegiant Air, Breeze Airways, and Spirit Airlines, as well as my own organization, American Economic Liberties Project. A central theme of the testimony was a lack of competition in the consolidated credit card market.

3) Decreasing availability of empty seats for redeeming upgrades and trips has made the pyramid scheme analogy quite appropriate.

When American Airlines launched the frequent flyer program revolution with its introduction of AAdvantage in 1981—widely regarded as the first major carrier program—average US airline passenger loads were 59.3%. There were often plenty of empty seats available.

Today, average load percentages are in the 80s or even higher on domestic routes, and virtually at 100% during peak times, such as the summer and year-end holidays.

Therefore, 43 years ago, 4 out of 10 seats in airplane cabins were empty. But now, it’s more like to 1 out of 10.

How can all members possibly expect to redeem their points? They can’t. Only a few can—just like in a pyramid scheme. Don’t believe it? Just search for “frequent flyer pyramid scheme” and you’ll see pages of airline pundits and program member comments stating that exact thing.

4) Transparency of program rules has all but disappeared.

Up until the 2000s, airlines published detailed summaries of their redemption policies and the amount of miles or points required for specific trips. These summaries were available on the airlines’ websites, and even printed in brochures mailed to members and offered at airport ticket counters.

In the early 2000s, when I was Editor of Consumer Reports Travel Letter, we published an annual in-depth analysis of programs with pages upon pages of charts, and virtually all of our data came from public information.

Today most of the larger airlines have made the rules shockingly opaque. Obtaining even the most basic info (“how many miles for a round-trip economy class ticket to Europe?”) is now a cumbersome process. It’s understandable that many consumers give up trying.

Earlier this year, I co-wrote the white paper How to Fix Flying with Ganesh Sitaraman, and among many proposals we called for was exactly this type of much-needed transparency with loyalty programs.

5) Airline greed has bloated the programs to a point that makes them ineffective for members.

Originally, miles and points were earned by flying, but today, if a customer holds a branded credit card, they need not fly at all to earn miles.

Airlines reap billions of dollars from the banks issuing these cards, as well as from junk fees they have introduced within the programs themselves, and the points systems are flooded with even more miles that are nearly impossible to use at ever-increasing redemption rates.

America’s leaders have noticed. Earlier in September 2024, the DOT launched a new full-blown inquiry into the programs run by the nation’s Big Four airlines—American Airlines, Delta Air Lines, Southwest Airlines, and United Airlines. The department gave them 90 days to provide detailed information on devaluation of rewards, hidden and dynamic pricing within the programs, extra fees, and the melding of programs through mergers.

What can you do about the deterioration of airline loyalty programs?

The airlines are due to respond to that DOT investigation by early December, and after that, hopefully we’ll be hearing more about much-needed changes.

In the meantime, you can file a consumer complaint about your loyalty programs with the DOT, either online or by mail. Doing so will assist the department and Congress in evaluating the level of discontent with the airlines.

In fact, the DOT’s monthly Air Travel Consumer Reports breaks out complaints specifically related to frequent flyer programs.

William J. McGee is the Senior Fellow for Aviation & Travel at American Economic Liberties Project. An FAA-licensed aircraft dispatcher, he spent seven years in airline flight operations management and was Editor-in-Chief of Consumer Reports Travel Letter. He is the author of Attention All Passengers and teaches at Vaughn College of Aeronautics. There is more at www.economicliberties.us/william-mcgee/.

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