Transportation Department launches probe into airline reward programs

Transportation Secretary Pete Buttigieg on Thursday launched a probe into the reward programs of four major United States airlines, claiming he was doing so to ensure the airlines are transparent and honest about the rewards.

Airlines offer reward programs to travelers in hopes of getting them to choose their business in subsequent flights. But the investigation comes after smaller airlines raised concerns that larger companies are "leveraging" the reward programs in an anticompetitive manner.

Buttigieg sent letters to United Airlines, American Airlines, Delta Air Lines, and Southwest Airlines on Thursday, requesting records and reports on the airlines' reward programs and policies. The request includes information on the devaluation of points and currency, and whether the programs contain any hidden or extra fees.

“Points systems like frequent flyer miles and credit card rewards have become such a meaningful part of our economy that many Americans view their rewards points balances as part of their savings,” Buttigieg said in a statement. “These programs bring real value to consumers, with families often counting on airline rewards to fund a vacation or to pay for a trip to visit loved ones. 

"But unlike a traditional savings account, these rewards are controlled by a company that can unilaterally change their value," he continued. "Our goal is to ensure consumers are getting the value that was promised to them, which means validating that these programs are transparent and fair."

A United spokesperson confirmed that all four companies have received the letter, according to The Hill. 

“Consumers have the power of choice when selecting an airline for a trip, and carriers want to reward travelers for their return business and brand loyalty," a spokesperson for the lobbying group Airlines For America (A4A) told the outlet. "Because there is fierce competition among airlines for customers, loyalty programs are a way carriers can say ‘thank you’ to travelers."

Misty Severi is an evening news reporter for Just the News. You can follow her on X for more coverage.