US Government Investigating Loyalty Programs of Top Airlines

According to Reuters.com, Transportation Secretary Pete Buttigieg has requested records and reports from American Airlines, Delta Air Lines, Southwest Airlines and United Airlines about the loyalty programs to ensure consumers do not face “unfair, deceptive, or anticompetitive practices.”

The DOT first began investigating the rewards and frequent flyer programs of top U.S. airlines in December, but the formal information request comes as the government agency is focused on how Americans are “impacted by the devaluation of earned rewards, hidden or dynamic pricing, extra fees, and reduced competition and choice.”

Buttigieg said the DOT will use the information to “better understand the largest rewards programs and identify potential competition or consumer protection issues or risks.”

While some lawmakers are concerned that carriers are raising the bar to earn perks associated with these programs, Airlines for America claims that the top companies in the industry are “transparent” with the important programs.

Reuters data found that the loyalty programs for American, Delta and United were valued at more than $20 billion each last year, while a Southwest spokesperson said the benefits helped double the industry average of seats booked with points.