DOT bashes airlines on mileage-program disclosure

On November 21, the Department of Transportation’s Office of Inspector General issued a 55-page report, portentously titled Follow-up Review: Performance of U.S. Airlines in Implementing Selected Provisions of the Airline Customer Service Commitment.

The report evaluates the airlines’ performance against their own so-called customer commitments. (All U.S. carriers published their individual versions of a customer commitment document in 1999, in a successful bid to preempt a move by Congress to impose a passenger bill of rights on the airlines.)

In their customer commitment statements, the airlines pledged to keep passengers apprised of flight delays, disclose the lowest available fares, provide access for travelers with disabilities, publish performance data on frequent flyer programs, and so on. (As an example, American’s is here.)

Six years later, the DOT found the airlines have routinely failed to deliver on their promises, not least in the area of their mileage schemes.

Fully six of the report’s 55 pages, 20 percent of the document, are devoted to frequent flyer programs. In a section with the heading “Straightforward, Comprehensive Reporting Is Needed on Frequent Flyer Award Redemptions,” the report finds as follows:

“[T]he information disclosed by the airlines on frequent flyer redemptions still is of marginal value to the consumer. Redemption information is often difficult to find and not comparable across airlines because it is reported in a variety of ways. As a result, it is difficult, if not impossible, for consumers to compare frequent flyer programs in a meaningful way.”

Based on the above, the DOT recommends that “the airlines should make available information that allows consumers to determine which frequent flyer program would provide the greatest benefit based on availability of awards at the standard level, awards requiring the least number of points, or seat availability to top markets … This information should include the ratio of the number of seats flown by passengers traveling on frequent flyer rewards to the overall number of seats available and the total number and percentage of redemptions at both standard and premium levels. This information should be readily and easily available to consumers.”

Recognizing that the airlines weren’t likely to disclose meaningful program information on their own initiative, I have been making the same point at least since March 2000. Perhaps now, supported by the DOT findings, such transparency will be forthcoming.

If not, then the traveling public should pressure Congress to finally enact a passenger bill of rights.