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U.S. Travel Hits Back at DOT Loyalty Program Investigation

The Department of Transportation’s recently announced investigation into major U.S. airlines’ frequent flyer programs is “cynical, short-sighted and out of touch with the needs of…

Written by:

Harvey Chipkin

Published on:

The Department of Transportation’s recently announced investigation into major U.S. airlines’ frequent flyer programs is “cynical, short-sighted and out of touch with the needs of the traveling public,” according to a statement from the U.S. Travel Association.

U.S. Secretary of Transportation Pete Buttigieg sent letters to American, Delta, Southwest and United Airlines recently, requiring them to hand over records with detailed information about their rewards programs, practices and policies.

The department is aiming to combat any deceptive or anticompetitive practices that may occur, such as the devaluation of earned rewards, hidden or dynamic pricing and extra fees, as well as reduced competition and choice.

U.S. Travel expressed frustration that the government would waste precious time micro-managing airlines’ loyalty programs rather than addressing critical areas of underinvestment, such as a shortage of 3,000 air traffic controllers, outdated airport and air traffic control technology, and aging airport infrastructure.

According to U.S. Travel, travelers love their rewards programs, noting surveys that show 80% of Americans value their credit card rewards and 81% of Americans agree that earning rewards is very important to them.
“We will continue to push back on the DOT’s probe — and further emphasize the need to drive focus on issues that grow the industry, not hinder it,” said U.S. Travel in a statement.

Scott Kirby, CEO of United Airlines, said at a conference last week that this summer, over 3 million people flew on a free flight on United using the MileagePlus program. “That, just for some context,” said Kirby, “is about 1% of the entire U.S. population, on just one airline, in just one season. So customers love these programs. We’ve known that — that’s why we keep trying to make them better.”

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