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The Transportation Department Is Investigating Airline Loyalty Programs

Officials from the Department of Transportation have initiated discussions with airlines as part of an inquiry into their loyalty programs. The DOT stated in an email that they intend to thoroughly examine complaints related to loyalty programs, utilizing their authority to investigate potential unfair and deceptive practices that may adversely impact travelers.

The investigation, reported by Reuters, is reportedly focused on transparency practices concerning award bookings, devaluation of frequent flyer miles, transferability of miles, and the adequacy of notice provided by airlines before making changes. Airlines for America (A4A), representing major U.S. carriers with large loyalty programs, including American, Delta, United, Southwest, Alaska, and JetBlue, declined to comment.

The scrutiny comes amid the rapid growth of loyalty programs and their associated co-branded credit cards, which have become significant revenue sources for airlines. The Biden administration, emphasizing aviation consumer protection, has recently fined Southwest and proposed new regulations, including mandatory refunds for lengthy flight delays and enhanced disclosure requirements for ancillary fees.

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