US Government Demands Major Airlines Clarify Frequent-Flyer Programs

The Biden administration is investigating the frequent-flyer programs of the four largest U.S. airlines, focusing on how they devalue earned points and frequently change the number needed to book flights. Transportation Secretary Pete Buttigieg has requested detailed reports from American, Delta, Southwest, and United airlines on the policies, fees, and terms of their loyalty programs.

Travelers often complain that airlines raise the points needed for free flights and limit seat availability for point redemption. Buttigieg noted that while these programs can offer value, unlike traditional savings accounts, airlines can unilaterally change the points' value. He aims to ensure these programs remain fair and transparent for consumers.

Airlines have responded by defending their loyalty programs. Delta highlighted its commitment to a rewarding experience through its SkyMiles program, while Southwest pointed out that its points never expire and that it offers more seats for points than competitors.

Frequent-flyer programs have shifted from rewarding travelers based on flights or miles to being driven by spending on airline-branded credit cards, which has become a significant revenue source for airlines. The Transportation Department’s inquiry follows a May hearing where consumer advocates raised concerns about these programs' transparency and fairness.

Consumer advocate Erin Witte criticized how loyalty programs have evolved, saying they now make customers feel like they need "insurance" to protect their earned points. She welcomed the government’s closer look into these practices.

Buttigieg has given the airlines 90 days to report on how point values are determined, any associated fees, and details of deals with banks that issue credit cards. They must also outline any changes made to the programs since July 31, 2018, and how these changes have affected the value of reward points.