The value of frequent flyer miles is under the microscope, prompting federal agencies to investigate airlines.
These programs have raised concerns about market competitiveness and the accessibility of rewards.
Federal authorities are scrutinising whether airlines have deliberately devalued frequent flyer miles, making it more challenging for consumers to redeem them. This investigation, led by the Department of Transportation and Consumer Financial Protection Bureau, aims to determine if these practices stifle competition and affect consumer choice.
The absence of the major airlines at the hearing highlights the potential implications of their loyalty programmes, which are significant profit drivers for these companies.
He elaborated that market dominance and pricing power present major challenges for low-cost carriers, affecting their ability to compete fairly.
Delta’s partnership with American Express generated $6.8 billion in 2023 alone, underlining the financial heft of these programmes for major airlines.
The bill, opposed by industry group Airlines for America, could reshape how airlines engage with credit card companies and the way they value loyalty points.
Expert voices suggest these practices might need regulation to ensure fair consumer treatment and market transparency.
Future strategies may need to consider these elements to allow new airline entrants to grow and compete effectively.
The ongoing scrutiny into airline loyalty programmes indicates a shift towards greater transparency.
Fair competition and consumer interests must remain at the forefront as the industry evolves.