Biden administration is investigating the four biggest US airlines Frequent flyer program They also explain how they devalue the points consumers have earned and frequently change the number of points or miles required to book an airline ticket.
Secretary of Transportation Pete Buttigieg I wrote a letter to the CEO of American Airlines. deltaThe company on Thursday asked the three airlines, Southwest Airlines and United Airlines, to report on the policies, fees and other features of their loyalty programs.
Consumers often complain that airlines are raising prices. Number of points It limits the number of points needed to get a free flight and the number of seats you can purchase with points.
Buttigieg said loyalty programs provide value to consumers, and people rely on them to pay for vacations and trips to visit family.
“But unlike traditional savings accounts, these benefits are controlled by the companies, who can unilaterally change their value,” he said in a statement from the Department of Transportation. “Our goal is to ensure consumers are getting the value they are promised, and that means verifying that these programs are transparent and fair.”
Delta said member loyalty in its frequent flyer program “means everything to us, and delivering a positive reward experience is our top priority for the Delta SkyMiles program.” Southwest The airline emphasized that points don’t expire and said it books more seats with points than any other airline.
Airlines for America, a trade group that represents all four of the airlines targeted by Buttigieg, said millions of people enjoy participating in loyalty programs.
“U.S. airlines are transparent about these programs, and policymakers should ensure consumers continue to have access to these important benefits,” a spokesperson for the group said.
Frequent flyer programs were once based on the number of flights or distance flown, but in recent years have come to be driven by the spending that consumers make using frequent flyer programs. Airline branded credit cardsRevenues from credit card issuers are an important source of revenue for airlines.
The Department of Transportation and the Consumer Financial Protection Bureau held a hearing on the airline program in May that addressed many of the issues raised in Buttigieg’s letter to airline CEOs. Witnesses included consumer advocacy groups and executives from three smaller airlines, but no representatives from the big four airlines that are the subject of the new investigation.
Erin Witte of the Consumer Federation of America, one of the advocates who testified, said frequent flyer programs began as a reward for consumers who were loyal to particular airlines.
“The irony is that many of these programs have morphed into programs that are not loyal to customers at all and instead trick people into thinking they need insurance to keep the points they’ve earned,” Witte said Thursday. He said he’s pleased the Department of Transportation is looking into these programs.
Consumer Protection Commission The report stated At the hearing, the company said it received more than 1,200 complaints about credit card rewards last year, up more than 70% from pre-pandemic levels. Many hotels, retailers and other businesses also offer rewards programs through credit cards.
Buttigieg said airlines should be aware of how points are valued. Fees paid by consumers Such as the amount you have to pay and details of the transactions with banks that buy miles from airlines and use them to encourage people to make purchases on their credit cards.
The order requires airlines to list changes to their programs since July 31, 2018, including how each change has affected the dollar value of points.