Over the years, airlines have resisted any sort of regulation of their frequent flyer programs. These are sales programs, they say, and shouldn't be subject to regulation at all. Actually, a reasonable position.
The Department of Transportation (DoT), on the other hand, receives lots of consumer complaints about frequent flyer programs in its inbox. We don't do anything because it's outside our purview, the Department says. Also a reasonable position.
Recently the DoT and other agencies decided to take a closer look. I have no idea whether anything will come of it, or what form any future regulation might take, but I can list the issues and my take on them. Anti-competitive Behavior.
Ask any economist to give a detailed definition of "anticompetitive behavior" and you're likely to get a different answer from each. It's the same with frequent flyer programs. Yes, a good program gives an airline an advantage over other lines, and their programs give giant airlines an advantage over their smaller competitors, but is that anti-competitive, or just good competition? I don't know, and I'm not sure who, if anybody does.
We'll hear from the several agencies in due time, but I have no inkling about what they'll say. Even if a consensus emerges that the big-line programs are anti-competitive, the next question is what to do about it. Again, I see no obvious remedies.
Murky waters are ahead on this one. Deceptive. DoT has a mandate to ban deceptive practices, and at least one such ongoi.
