The Biden administration is currently examining the four largest U.S. airline frequent-flyer programs to address concerns regarding the devaluation of points earned by consumers and frequent changes in the number of points or miles required to book flights. Transportation Secretary Pete Buttigieg recently reached out to the CEOs of American, Delta, Southwest, and United, requesting a detailed report on the policies, fees, and other aspects of their loyalty programs.
One common complaint from consumers is that airlines often increase the number of points needed to redeem a free flight and impose restrictions on the availability of seats that can be purchased using points. Buttigieg emphasized the value that loyalty programs bring to consumers, as many rely on these rewards to fund vacations and visits to family members. However, he highlighted the fact that unlike traditional savings accounts, these rewards are subject to unilateral changes by the airline companies.
The primary goal of the examination is to ensure that consumers receive the value promised to them by validating the transparency and fairness of these loyalty programs. Historically, frequent-flyer programs were based on the number of flights taken or miles flown. In recent years, there has been a shift towards rewarding consumer spending through airline-branded credit cards, which has become a significant source of revenue for airlines.
