Airlines Face Scrutiny Over Loyalty Programs

Airline loyalty programs are under the microscope by the U.S. Transportation Department for potential deceptive or unfair practices.

The department has been meeting with airlines to discuss the popular programs, including transparency practices when booking award tickets, transferability of miles and notice given before making changes, two sources told Reuters, which has an exclusive report. 

“One other key issue USDOT is looking at is the devaluation of frequent flyer miles over time that makes it harder to book award tickets," per Reuters.

The meetings come as some members of Congress have raised concerns about the programs.

“In October, Senate Judiciary Committee chair Dick Durbin and Republican Senator Roger Marshal asked the Transportation Department and Consumer Financial Protection Bureau about ‘troubling reports’ of unfair and deceptive practices in airlines’ frequent flyer and loyalty programs,” per Reuters. 



The pair cited reports "airlines are changing point systems in ways that are unfair to consumers, including by devaluing points, meaning it takes more points than initially marketed to achieve the promised rewards.”

Meanwhile, the federal government is fining Southwest Airlines $140 million for last year's historic 10-day-long holiday meltdown that stranded more than 2 million travelers, according to CNN.

That airline dodged a bullet earlier this week by finally reaching a tentative labor agreement with its pilots, according to CNBC. The carrier is the last of the major airlines to reach a deal with aviators.

The five-year deal is worth $12 billion and includes 50% cumulative pay increases over the life of the contract, according to the pilots’ union.

In other news, hundreds of Alaska Airlines flight attendants picketed outside airports in Portland, Oregon; Seattle, Los Angeles, San Francisco, San Diego, Anchorage and Washington D.C., according to KGW8.

The flight attendants, represented by the Association of Flight Attendants CWA, have held pickets at airports throughout the year in their fight for a new union contract seeking better pay. 

The union says that flight attendants are upset as the airline stated their proposals were not “economically feasible," then months later announced plans to purchase Hawaiian Airlines for $1.9 billion.

Alaska Airlines flight attendants will hold a vote to get permission from the National Mediation Board on whether to strike, starting Jan. 8 and closing on Feb. 13. The strike ballot, if approved, will be sent to almost 6,800 flight attendants. 

“Federal law makes it difficult for airline workers to walk off the job or for carriers to lock out workers,” per KGW8. “The union itself, according to an emailed statement, is in the mediation stage of negotiations, which does not mean a strike is imminent. Airlines are governed by the Railway Labor Act, which determines when and how strikes can occur.”

According to The Associated Press, airline strikes and lockouts are legal only if federal mediators take the rare step of declaring that negotiations are at an impasse. The last strike by a U.S. airline union took place in 2010, involving pilots at Spirit Airlines.

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