Delta Air Lines & More Under Federal Investigation Over Loyalty Programs

Delta Air Lines is just one of the many airlines under federal scrutiny for its loyalty programs, with the Department of Transportation (DOT) alleging that the airlines are devaluing the rewards accumulated by customers.

Bloomberg reports that rewards programs from American Airlines, United Airlines, and Southwest Airlines are also under fire. In order to understand how customers “are impacted by the devaluation of earned rewards, hidden or dynamic pricing, extra fees, and reduced competition and choice,” the DOT has requested reports and comprehensive information on the airlines’ programs, according to a statement.

“Many Americans view their rewards points balances as part of their savings,” Secretary Pete Buttigieg said in the statement. “But unlike a traditional savings account, these rewards are controlled by a company that can unilaterally change their value.”

Delta x American Express

With its credit card relationship with American Express Co., Delta reported making $6.8 billion in 2023. Going forward, it anticipates growing this amount by 10% this year and reaching $10 billion. American Airlines revealed that its co-branded credit card and other partners paid it $5.2 billion in cash in 2023.

During a combined hearing with the Consumer Financial Protection Bureau in May, Buttigieg hinted at his worries regarding co-branded cards and loyalty programs that enable travelers to accrue points through spending. He brought up two main concerns at the time: that airlines were altering their reward programs to make it harder for passengers to accrue points — a move that backfired on Delta when it was forced to reconsider a 2023 revamp due to a barrage of complaints — and that the programs might be run in a manner that was intended “to block the entry or growth of smaller airline competitors.”

Meanwhile, Delta customers who hold the airline’s branded American Express card were already experiencing issues back in May, when the company announced that the $99 Gold card would now set them back $150. Additionally, the Reserve card now costs $650 instead of $550, while Platinum cards have increased from $250 to $350.

Travelers may find the higher card costs to be a sticking point, while Delta’s contentious decision to restrict access to the Sky Club for top-tier Reserve cardholders — limiting visits to 15 per year beginning on Feb. 1, 2025 — remains in place.