4 Big Airlines Face U.S. Inquiry Over Frequent Flier Programs

05.09.2024 - 21:00 / nytimes.com / Pete Buttigieg

The Transportation Department announced on Thursday that it was investigating the rewards programs of the country’s four biggest airlines, part of the agency’s continuing efforts to bolster protections for air travelers.

As part of the inquiry, Transportation Secretary Pete Buttigieg ordered the carriers — United Airlines, Delta Air Lines, American Airlines and Southwest Airlines — to furnish the agency with records and detailed information about their loyalty programs.

The agency said its investigation was “focused on the ways consumers participating in airline rewards programs are impacted by the devaluation of earned rewards, hidden or dynamic pricing, extra fees, and reduced competition and choice.”

Mr. Buttigieg said in a statement that such programs “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,” he added, “which means validating that these programs are transparent and fair.”

Airlines’ policies have been in the Biden administration’s cross hairs for months as it has tried to clamp down on practices that it sees as unfavorable to consumers. In April, the Transportation Department issued new rules requiring airlines to offer refunds when flights are canceled or delayed and to reveal all fees before a ticket is purchased.

Mr. Buttigieg expressed concerns about loyalty programs in May during a joint hearing of the Transportation Department and the Consumer Financial Protection Bureau on airline loyalty and credit card programs. He said the agency was examining whether the companies were being straightforward with customers about what they would receive and whether they were “getting the deal that they were promised.”

The agency, he added at the time, was also looking into the impact of the programs on competition in the industry, and whether some were “being operated in a way that has the potential to block the entry or growth of smaller airline competitors, which could ultimately limit options for consumers.”

In statements, Delta and Southwest defended their loyalty programs. American and United referred requests for comment to Airlines for America, a trade association that represents the country’s biggest airlines, which said in a statement that “U.S. carriers are transparent about these programs, and policymakers should ensure that consumers can continue to be offered these important benefits.”

Last year, Delta prompted an outcry among travelers when it announced changes to its SkyMiles frequent flier program. The airline later adjusted its modifications.