Frequent-flier unfairness targeted DOT seeking to learn how seat availability is determined; Air travel

THE BALTIMORE SUN

So you're confused about how airlines allocate frequent-flier seats? Well, so is the U.S. Department of Transportation and it's looking for an explanation.

"We want to know how they determine how many seats are available," said Bill Mosely, a spokesman for the federal agency that governs the airline industry.

The agency recently sent a letter to nine U.S. airlines, seeking specific information about how the popular programs are operated. The letter is part of an continuing investigation into whether frequent-flier programs meet the agency's broad regulations about unfair or deceptive practices. Carriers have been asked to respond by Aug. 31.

Introduced by American Airlines in 1981, frequent-flier programs were designed to create passenger loyalty by giving repeat customers free trips or upgrades to first class.

Today, nearly every airline, except small discount carriers, has such a program. Corporate tie-ins allow fliers to earn points by using an affinity credit card, placing a long-distance call, renting a car or staying at a hotel.

But, while the points are easy to accumulate, many travelers complain that they're tough to use.

That's because the airlines carefully manage unredeemed points, which have grown to an estimated ticket value of more than $2 billion. Not only do they black out periods, such as the Thanksgiving weekend and Christmas, but they also limit the number of free seats available on each flight. Last year, less than 7.5 percent of passengers flew on free tickets, down slightly from previous years.

"The consumer doesn't understand why there are seats available for cash-paying customers but not for frequent fliers," Mosely said.

Only Southwest Airlines, which did not receive the agency's recent letter, allows frequent-flier customers to fly whenever there is an empty seat available, he said.

A number of airlines, however, allow consumers to obtain a free domestic ticket whenever there's a seat available if they're willing to use 40,000 points, instead of 25,000.

In recent years, the minimum level for receiving a free ticket has grown, typically now 25,000 points for a domestic ticket.

Many carriers have also slapped expiration dates on their frequent-flier points.

Mosely said the agency wants more information about how airlines notify passengers about such changes in frequent-flier requirements. The DOT letter was sent to Alaska Airlines, America West, American, Continental, Delta, Northwest, Trans World, United and US Airways.

Mosely said the agency's investigation, which began months ago, was not prompted by complaints against a specific carrier nor by a flood of complaints. In May, he said, 17 of the 700 consumer complaints involved frequent-flier programs.

Pub Date: 7/22/97

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