The US Department of Transportation (DOT) has launched an inquiry into the frequent flyer programmes of each of American Airlines, Delta Air Lines, United Airlines and Southwest Airlines in an effort to protect customers “from potential unfair, deceptive, or anticompetitive practices,” it said in a statement.
The DOT ordered the four carriers to provide records and reports with detailed information about their rewards schemes, practices, and policies to determine how the devaluation of earned rewards, hidden or dynamic pricing, extra fees, and reduced competition and choice impacts consumers.
“These programmes bring real value to consumers. 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,” said Transport Secretary Pete Buttigieg.
As part of the DOT’s probe, airlines must:
- describe each change made to their rewards programme over the last six years, how it impacted existing points and statuses, and what options were provided to members to avoid losing any value or benefits they had already earned;
- provide the average dollar value of one reward point, the value of a point when it is redeemed for various services, the price to purchase a point directly from the airline, and identify practices related to dynamic pricing;
- identify and describe each fee associated with their rewards programme that is charged to consumers, the actual cost, and the rationale for charging any fee; and
- describe and provide documents related to their mergers involving reward schemes, the integration process of merging them, their partnerships, and how they monitor, analyse, and react to other reward programmes.
The Airlines for America (A4A) lobby has defended its membership saying US airlines are transparent about frequent flyer schemes, and policymakers should ensure that consumers can continue to be offered these benefits, Reuters reported.
Delta told Reuters that it has received the DOT’s inquiry and will respond. United and American Airlines referred to A4A’s comments. Southwest told ch-aviation that it is committed to offering a programme which includes flexible travel policies, availability of reward seats, and never-expiring points.