United CEO sounds alarm over proposed airline laws

Over the past year, the Biden administration has taken a number of steps to try to reign in airlines by cracking down on policies they see as harmful to consumers.

In late spring, the Delta (DAL) United (UAL) and American Airlines (AAL) banded together to sue the Department of Transportation over new rules requiring them to disclose “junk fees” such as baggage and advance cancellation charges.

The credit card competition bill, which was introduced by Sens. Dick Durbin (D-Ill.) and Roger Marshall (R-Kansas) in 2023, is also on the table. While the bill is not unique to airlines, many have expressed concern that it requires merchants to give consumers the ability to choose which credit card networks to use for each purchase (for example, a customer using a Visa). (V) the card could opt to use Mastercard (ME) network) would completely uproot their loyalty rewards programs.

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At the recent 2024 Global Aerospace Summit in Washington, United CEO Scott Kirby called the bill “bad policy” in a tirade against the proposed changes.

United CEO: ‘Well-intentioned, but it would just be bad policy’

“The only risk to (loyalty) programs is legislative initiatives that I’m sure are well-intentioned but would just be bad policy, particularly the Credit Card Competition Act,” Kirby said during a legislative briefing reported by the company airline and travel site The Points Guy. . He went on to add that more than three million passengers use the United MileagePlus program and that “customers love these programs.”

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Figures from the most recent earnings reported by Points Guy show that the MileagePlus program also brought United more than $892 million, or 6 percent of total revenue in the second quarter.

The US Department of Transportation is currently conducting a separate investigation into whether airlines are using rewards programs to retain customers using “potentially (potentially) unfair, deceptive or anti-competitive practices.”

As head of United, Kirby likely spent the meeting singing the praises of MileagePlus specifically and rewards programs as a whole.

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This is why scrutiny of airline loyalty programs remains high

“The affinity and loyalty that people have for these programs is incredible,” Kirby continued.

A recent survey by points and travel platform Point.me found United’s MileagePlus to be the third best airline loyalty program in the world, behind only Air France-KLM. (AFRICAN) Flying Blue and Air Canada (ACDVF) His plane.

Factors ranking programs included how easy (or difficult) it is to earn miles in ways other than buying flights, how quickly you’ll be able to get benefits like free flights, and the cost of said benefits in the points you earn — all things the DoT is currently looking into devaluation and dynamic pricing that would fetch consumers less than what is advertised to encourage them to spend with the airline.

Current Transportation Secretary Pete Buttigieg issued a statement saying that airline miles “have become such an important part of our economy that many Americans see their reward point balances as part of their savings.”

The major US airlines to which the survey was directed have not yet responded (they have 90 days from the time they were informed of it on September 5th to do so).

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