Improvements Needed in DOT’s Process for Identifying Unfair or Deceptive Practices in Airline Frequent Flyer Programs

For more than 30 years, airlines have offered frequent flyer programs to encourage travel on their respective airlines and secure customer loyalty. An estimated 630 million members are currently enrolled in various frequent flyer programs worldwide, with over 300 million members enrolled in U.S. air carrier programs. In a July 2014 letter and subsequent conversation with the Office of Inspector General (OIG) office, Representative Alan Grayson expressed multiple concerns with airlines’ frequent flyer programs, such as changes to frequent flyer programs with little to no notice, the devaluation of frequent flyer awards and benefits over time, and the availability of award seats. The Department of Transportation (DOT) requires that airlines disclose their frequent flyer program rules in their customer service plans. Moreover, DOT has authority to investigate unfair and deceptive practices and unfair methods of competition in air transportation, including consumer complaints regarding the rights of passengers who hold frequent flyer miles. Accordingly, OIG initiated this audit to review: (1) DOT’s oversight of air carriers’ compliance with frequent flyer program disclosure requirements, (2) DOT’s process for reviewing passenger complaints regarding unfair and deceptive practices, and (3) airlines’ practices regarding the availability of award seats and valuation of frequent flyer miles. To conduct our work, OIG met with DOT and airline officials and reviewed their processes for reviewing and resolving consumer frequent flyer complaints. OIG is making recommendations for DOT to improve its process for reviewing consumer complaints for unfair and deceptive practices. OIG also encourages air carriers to be more transparent with award-seat availability and redemption information.

• Record URL:
  • https://www.oig.dot.gov/sites/default/files/DOT%20Oversight%20of%20Airline%20Frequent%20Flyer%20Programs_Final%20Report%206-16-16.pdf
• 
• Corporate Authors:

  Department of Transportation

  Office of Inspector General, 1200 New Jersey Avenue, SE
  Washington, DC  United States  20590
• Publication Date: 2016-6-16

Language

• English

Media Info

• Media Type: Digital/other
• Edition: Audit Report
• Features: Appendices; References;
• Pagination: 15p

Subject/Index Terms

• TRT Terms: Airlines; Compliance; Customer satisfaction; Frequent flyer programs; Oversight
• Identifier Terms: U.S. Office of the Secretary of Transportation
• Geographic Terms: United States
• Subject Areas: Administration and Management; Aviation;

Filing Info

• Accession Number: 01605606
• Record Type: Publication
• Report/Paper Numbers: AV-2016-068
• Files: TRIS, ATRI, USDOT
• Created Date: Jul 27 2016 9:52AM