Ed Perkins on Travel: DoT and Frequent-Flier Miles

Department of Transportation. Dreamstime/TCA

Last week, the Department of Transportation (DoT) formally launched its much anticipated probe into big-airline frequent-flier programs. The stated aim is “protecting rewards customers from potential unfair, deceptive, or anticompetitive practices.” As a start, DoT requested the four giant USA lines that control 80 percent of the domestic market—American, Delta, Southwest, and United—to provide documents in four areas:

• Devaluation of earned rewards
• Hidden and dynamic pricing of awards
• Extra fees associated with program use
• Reduction in competition and choice, especially as resulting from mergers

Clearly, at this point DoT is just sniffing around at defining where we are and how we got here. It’s hard to see how any sort of action could come out of this phase, even if the initial findings show that the big lines did, in fact, employ deceptive practices. What to do? Roll back current pricings to a past date? Actually, this option recalls a time, nearly lost in the fog of memory, when some big lines made a big devaluation of benefits and kept separate inventories of “new” and “old” miles with markedly different values for a while.

In any event, it’s pretty clear to me that the DoT won’t have any trouble finding instances where airlines employed deceptive and unfair means and hid moves from flyers. What I have trouble with is figuring out how DoT might actually ease travelers’ primary frequent pain points:

• Ongoing de facto devaluations of existing miles/points. Overall, we’ve seen each of our miles buying a little less every year. These days, we can’t even track it well, given how many lines have gone to dynamic mileage pricing without any award chart values to use as a standard of comparison.
• Scarcity of acceptable award seats at lower “saver” values. This has been my biggest problem, and I suspect yours as well. I use my miles exclusively for premium-cabin transatlantic and transpacific travel, and I once checked out nonstop flights on one route—San Francisco to Munich—and found no lower-mileage-price award seats for a full nine months. Although the airline and its partners flew multiple nonstops daily, the best low-price award alternative involved consecutive back-to-back red-eyes with an all day layover at an eastern hub.

The current situation is not ideal for flyers. But I can’t see any feasible remedy. DoT authority over airlines allows it to remedy deception and unfair practice, but it doesn’t seem to extend to the point of allowing DoT to set award levels or seat quotas. Relief from high award prices and seat shortages still seem a distant goal—maybe today’s inflight menu really will be pie in the sky sometime, but don’t count on it.

Meanwhile, flyers should keep in mind the usual long-term rules about miles and points.

• Frequent-flier miles do not improve with age—the longer you sit on them, the less they are likely to get you.
• Miles on most lines are worth most when used for premium-cabin travel. All of the figures you see that miles are worth over two cents a mile are based on their use to buy business or first class award seats.
• Don’t go for a miles-earning credit card if you use miles primarily for main-cabin awards. You’re better off with a card that gives two cents per dollar charged in cashback.

Getting top value for miles is something of a game, as witnessed by the extensive blogosphere centered on miles and points. If you’re serious, jump into the game and play—learn about how partner-line deals and trips starting overseas can stretch your miles. If you don’t' have the time or inclination yourself, some of the bloggers will help you—with a fee.

The current DoT effort is just a beginning, and it’s too early to tell where it will land. A future administration may quash it entirely. So go about your lives and travels and wait to see what happens.

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