Will Department Of Transportation Regulate Airline Loyalty Programs?

View From The Wing: "The Supreme Court ruled in 2014 that consumers can’t sue loyalty programs for acting in bad faith or unfair dealing – only for violating their own program terms. That’s because loyalty programs were seen as a rebating on airfare, because the Airline Deregulation Act precludes states from involving itself in airline schedules and pricing, and because common law claims of implied covenants of good faith and fair dealing were deemed state-level claims."

"That left only the Department of Transportation policing loyalty programs, and according to the DOT Inspector General the agency has improperly ignored complaints about frequent flyer programs."

"It should, however, recognize that frequent flyer programs are the most successful marketing innovation in history, have tremendous value (and saved American Airlines and perhaps United from bankruptcy during the pandemic, and saved airlines during the Great Recession too), and approach with caution."

Points Wire Note:

While there's no imminent threat to your points and miles, I think it's important to stay aware of potential moves like this. I've often found that folks who aren't familiar with loyalty programs go for oversimplified solutions to things they don't like about said programs. That being said, it's certainly worth the DOT getting feedback from experts in the field who can provide ideas for balanced solutions to ensure programs are both profitable and fair to consumers.