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Audit: Frequent flier programs should get more oversight

A federal audit found that airlines don't fully inform consumers about how frequent flier programs work, and that the U.S. Department of Transportation could do more to investigate to protect passengers' rights.

The audit by the DOT's Office of Inspector General said the DOT "is missing opportunities to strengthen oversight and be more proactive in determining whether airlines have engaged in unfair or deceptive practices." The audit looked at frequent flier programs of Delta Air Lines, American Airlines and Virgin America.


In a written response, the DOT said it requires "that airlines make available a reasonable number of seats for award tickets and that consumers have access to frequent flyer program information on airline websites."

The agency also said complaints about award ticket availability make up less than 1/2 of 1 percent of the air travel consumer complaints filed with the DOT. The audit report said consumers filed 76 frequent flier complaints with the DOT from 2012 through 2014.

The report also said an analysis of data from 2010 through 2013 determined the average number of frequent flyer miles used to redeem an award on Atlanta-based Delta increased from 22,000 to 24,636.

Delta said it had a record number of award flight redemptions in the first three months of this year, with 2.2 million, or one award every 3.5 seconds. This year, Delta said its average mileage redemption per ticket is down 10 percent from last year.

“With the changes to SkyMiles Program in 2015, Delta now offers customers more ways to redeem miles for Award travel at lower price points," Delta spokesman Anthony Black said in a written statement.

The DOT said it disagreed with an earlier draft recommendation that the agency should require airlines to "provide more transparency about the availability of frequent flyer award redemptions."

The DOT said airlines determine the availability of award tickets by using "complex algorithms that weigh numerous dynamic variables, and we are not confident that these processes could be summarized for effective use by consumers." The inspector general's office removed from its final report the recommendation to require more transparency.

The DOT said it agrees with a recommendation to define "reasonable notice" of changes to frequent flier programs terms and to require airlines to provide such notice, and said it plans to create such a rule by the end of 2018. The agency said it would also comply with a recommendation to train its analysts on what constitutes unfair and deceptive practices.

In the audit report, the inspector general's office also encouraged airlines "to be more transparent with award-seat availability and redemption information."

The audit report said an examination of seat availability on certain flights and dates on Delta Air Lines and American Airlines found that 99 percent of the flights had award seats available, with 63 percent available at the lowest award levels of 20,000 or 25,000 miles.

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About the Author

Business reporter Kelly Yamanouchi covers airlines and the airport.