Con Air? The U.S. Launches Investigation Into 4 Major Airline Loyalty Programs
While airline loyalty programs can be a boon to frequent fliers, they also cause some consternation among customers—so much so that four of the biggest programs are now being investigated by the U.S. government.
The Department of Transportation is looking into the rewards programs at United Airlines, American Airlines, Delta Air Lines, and Southwest Airlines, the four largest airlines in the United States, to see if they are fair to travelers, The New York Times reported on Thursday. Transportation Secretary Pete Buttigieg requested that all four companies give the agency detailed information and records related to their programs.
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“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.”
Among the things the Department of Transportation will look into is the devaluation of rewards, hidden and dynamic pricing, added fees, and a lack of competition and choice, the Times noted. As the head of the agency, Buttigieg has questioned these sorts of practices and voiced his concern that airlines are not being transparent with customers about what they will actually receive from loyalty programs.
In response, Southwest and Delta defended their programs in statements to The New York Times. United and American deferred to the trade association Airlines for America. “U.S. carriers are transparent about these programs, and policymakers should ensure that consumers can continue to be offered these important benefits,” the organization said in a statement shared with the newspaper.
In the past year, airlines have come under fire for a number of reasons. When Delta announced changes to its loyalty program last year, for example, travelers pushed back and the airline eventually modified its updates, the Times noted. And the CrowdStrike outage that occurred earlier this summer sent airlines into a frenzy, with frustrated customers around the world facing delays and cancellations.
Now the U.S. government is stepping into the fray, we’ll just have to wait and see if there are any more shake-ups with the airlines’ loyalty programs.
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