Do Frequent Flyer Programs Look Like a Scam? Federal Authorities Are Investigating Because They Might Be

Frequent flyer miles was intended as a reward for loyalty to a particular airline but has evolved into a semi-free currency managed at the discretion of airline executives. United States Department of Transportation conducted an investigation into the airline miles programs of the country’s four major airlines: American Airlines, Delta Airlines, United Airlines And Southwest Airlines.

While frequent flyer programs have become a huge source of revenue for airlines, customers are discovering that the value of their air miles are declining and program benefits are harder to redeem. For example, Delta has moved its SkyMiles policy by the end of 2023 to make it harder for passengers to gain status and based solely on spending, not considering the number of flights or miles flown, Transportation Secretary Pete Buttigieg said. in a statement:

“These programs offer real value to consumers, with families often relying on airline rewards to fund vacations or pay for trips to visit relatives. But unlike traditional savings accounts, these rewards are controlled by a company that can unilaterally change their value.

Changes at Atlanta-based airline is intended to encourage spending with the Delta SkyMiles American Express credit card, squeezing customer revenue away from the airport. Delta grossed $5.7 billion from the 2022 miles program, the only reason the company turned a profit that year, considering it generated total profits of $3.6 billion.

Delta has partially backed away from some of the most drastic changes, like capacity limits. visit airport lounge, less than a month after a backlash from customers. But the carrier is not about to back down when spending becomes the sole metric used to gain status. The disaster highlights the extent to which airlines have control over their frequent flyer programs. Carriers can also indirectly devalue points by imposing blackout dates, adding fees, and pricing tickets aggressively.

USDOT Investigation will require airlines to disclose every change made to their frequent flyer programs over the past six years, the average dollar value of a single point mile, and any fees associated with the program along with their reasons. The investigation could lead to the government’s next major policy move after requiring airlines to Automatic passenger refund due to significant flight cancellations and delays earlier this year.