NEWS: The 4 Biggest US Airline Loyalty Programs are Under Investigation

The US government is looking into the frequent flyer programs of the country’s four largest airlines.

Southwest Airlines

It’s no secret that traveling can be expensive, and many people count on frequent flyer programs to help them budget for their vacations. But in the past, airlines have been accused of using “deceptive practices” for these programs, and the US government is taking action.

The frequent flyer programs of the four largest US airlines are now under examination by the Department of Transportation. The department is specifically looking into how the companies devalue points that customers have earned and regularly change the number of points or miles needed to book flights.

Southwest Plane

On Thursday, Transportation Secretary Pete Buttigieg wrote to the CEOs of American, Delta, Southwest, and United on Thursday, requesting a report on the policies, fees, and other features of each of their loyalty programs.

In an official statement, Buttigieg noted that loyalty programs bring value to consumers and people count on them to pay for travel. He continued “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.”

Southwest Airlines at MCO

Back in May, the Transportation Department and the Consumer Financial Protection Bureau held a hearing on airline loyalty programs, at which they raised many of the issues addressed in Buttigieg’s letter to airline CEOs. Witnesses included consumer advocates and representatives from three smaller airlines, but no one from the four largest airlines that are covered by the new inquiry attended.

A report for the hearing from the consumer-protection board said that it received more than 1,200 complaints about credit card rewards last year, an increase of more than 70% from pre-pandemic levels.

United Flight

The airlines are required to report back to Buttigieg’s letter within 90 days with information including how point values are determined, any fees that consumers must pay, and details of deals with banks that buy miles from airlines and use them to encourage people to shop with their credit cards. The order also asks airlines to list any program changes since July 31st, 2018, including how each change affected the dollar value of reward points.