Exclusive-US scrutinizing airline frequent flyer programs

By David Shepardson

WASHINGTON (Reuters) – The U.S. Transportation Department is scrutinizing the frequent flyer programs of major U.S. airlines for potential deceptive or unfair practices, the agency said Thursday as regulators step up oversight of the airline industry.

The department has been meeting in recent weeks with passenger airlines to discuss the popular loyalty programs, including transparency practices when booking award tickets, transferability of miles and notice given before making changes, sources told Reuters.

“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,” a department spokesperson said. “DOT officials are actively meeting with U.S. airlines and gathering more information on this issue.”

The meetings come as some in Congress have raised concerns about frequent flyer programs.

In October, Senate Judiciary Committee chair Dick Durbin and Republican Senator Roger Marshal asked the Transportation Department and Consumer Financial Protection Bureau about “troubling reports” of unfair and deceptive practices in airlines’ frequent flyer and loyalty programs.

The pair cited reports “airlines are changing point systems in ways that are unfair to consumers, including by devaluing points, meaning it takes more points than initially marketed to achieve the promised rewards.”