US scrutinizing frequent-flyer programs

The Department of Transportation (DOT) is scrutinizing major U.S. airlines’ frequent-flyer programs for potential deceptive or unfair practices, it said Thursday.

“We plan to carefully review complaints regarding loyalty programs and exercise our authority to investigate airlines for unfair and deceptive practices that hurt travelers as warranted,” the department told The Hill in an emailed statement. “DOT officials are actively meeting with U.S. airlines and gathering more information on this issue.”

The department has met with airlines in recent weeks to discuss their loyalty programs, including transparency practices for booking tickets, transferability of miles and notice given before making changes, Reuters first reported.

A source told Reuters the DOT will also examine the devaluation of frequent flyer miles over time that makes it difficult to book award tickets.

These frequent-flyer programs are popular. Delta Air Lines, for example, added a record 8.5 million members to its SkyMiles loyalty program last year, surpassing 100 million frequent flyer members, Reuters reported.

In October, Delta announced it would be scaling back changes to that program after hundreds of customers objected to some of them, including new restrictions for entering airport lounges. The airline also proposed making spending with Delta the only way to reach elite status, instead of counting flights or miles flown — as well as raising spending requirements to reach each of its SkyMiles levels, The Associated Press reported.

Later in October, Senate Democratic Whip Dick Durbin (Ill.) and Sen. Roger Marshall (R-Kan.) requested that the DOT provide information about the actions it’s taking to protect consumers from the practices in airlines’ loyalty programs.

The Senators said while the programs initially were incentives and rewards, they now “exclusively focus” on money spent and have “unfair, abusive, and deceptive practices,” under which airlines can change programs without notifying customers.

“As a result, these programs incentivize consumers to purchase goods and services, obtain credit cards, and spend on those credit cards in exchange for promised rewards — all while retaining the power to strip consumers of those rewards at any moment,” they said.

Under Transportation Secretary Pete Buttigieg, the department said it has “taken historic action” to defend the rights of passengers and to “hold airlines accountable if they fail consumers.”