I really don't think anything major will come from this audit. Not that something shouldn't be done, but rather because the Frequent Flyer programs are so important to the airlines as profit centers that the airlines (though their lobbyists and political contributions) will fight tooth and nail to prevent Congress from doing anything meaningful. But even if Congress is persuaded to remain quiescent (which seems to be their natural state, when they're not busy making things worse),* there may be another solution. The rules of the programs are a major part of the problem. The airlines have written them to say that they (the airlines) can unilaterally change them, reduce or eliminate the value of awards you have already earned, and even kick you out of their program and take miles you've legitimately earned, any time they want to. This violates every state's Consumer Protection laws (and even the laws of common sense) because the rules are one-sided contracts of adhesion (i.e., not subject to negotiation) and are abused by the airlines. The critical part of the problem is that the Airline Deregulation Act of 1978 (ADA) has been interpreted to immunize the frequent flyer programs from the enforcement of those state Consumer Protection laws. The stated logic was rather complex and involves concepts of Federal law preempting the authority of the States, but in a nutshell it was that since the miles were earned as an adjunct to using airline tickets and were redeemed to "purchase" airline tickets, this was simply a part of the routes, prices, and services intended to be deregulated in the ADA and thus the States could not apply their Consumer Protection laws to regulate those miles or their earning and use. While that logic may have made sense at the outset, when miles were indeed earned solely through airline fights (or later, also a small percentage being earned through activity ancillary to air travel, e.g., hotel stays or car rentals tied to an airline trip) and were redeemable almost exclusively for free or reduced-fare tickets or upgrades to airline tickets, and the frequent flyer program was administered as part of airline operations, one has to question whether it remains valid today, where the majority of miles are earned through activity unrelated to airline travel (e.g., use of credit cards, bonuses for opening bank and brokerage accounts, making charitable donations, selling or buying real estate, etc.), miles can be redeemed for unrelated goods and services (magazine subscriptions, etc.), and Frequent Flyer programs have now been spun off by most airlines into separate corporations having a legal identity (juridical personality) other than an airline. If Congress were to pass legislation that simply allowed the States to enforce their Consumer Protection laws on frequent flyer programs, I would think that would solve the problem. Even if Congress refuses to act, perhaps the courts could be persuaded to revisit the old rulings based on the changed factual circumstances since the 1980s. ____________ * I think it was Will Rogers who observed, "They say the only sure things in life are death and taxes. The main difference between the two is that death doesn't get worse every time Congress is in session."
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