Frequent flyer programs are great ways for airlines to build customer trust and loyalty. If you're a frequent traveler on U.S. domestic flights, you might be annoyingly familiar with the constant credit card and mileage program pitches on each flight.

Such programs are highly lucrative for airlines and certain parts of the way they operate are mysterious. As such, the United States Department of Transportation has recently launched a federal consumer protection probe. Let's see what this means for U.S. carriers.

Full Transparency

On Thursday, the DOT reportedly told executives from the four major U.S. airlines (Southwest, American, Delta, and United) that they must disclose all details and data concerning the policies and ways that passengers accrue and spend miles.

In a letter sent to these executives, the DOT wrote:

"Our goal with this inquiry is to ensure that customer rewards are protected from any practices that would diminish their value, benefit, or availability."

The CEOs of the four aforementioned airlines have 90 days to respond to the Department of Transportation. This probe is concerned about the devaluation of earned rewards, extra fees, and hidden pricing among others, and how they will affect consumers. Transportation Secretary Pete Buttigieg has called on the airlines to provide substantial records and information about these programs.

Overall, the Department aims to protect American consumers from "potential unfair, deceptive, or anticompetitive practices," as stated in a news release. 

This probe is coming nine months after the Department of Transportation's initial investigation into potentially unfair or deceptive practices within airline mileage programs.

The DOT ordered airlines to share all details regarding earning and redeeming awards, how valuations are set, the fees that passengers pay, and the specifics of the airline's agreements with cobranded credit card partners such as MasterCard, VISA, and American Express.

Airline frequent flyer programs have become such a key part of the U.S. airline business model. In some cases, these programs have added billions of dollars annually to airline revenues. 

Given how much more money U.S. airlines have been making from these programs, it makes sense why the Department of Transportation has decided to place them under further scrutiny.

Some months ago, Delta Air Lines announced controversial changes to its SkyMiles elite statuses. Such changes drew lots of criticism from frequent flyers and even prompted some to switch airline loyalties. 

With new minimum mileage thresholds being adopted, it became harder for Delta frequent flyers to retain their status tiers as the spending thresholds became far too high to justify. 

These drastic changes highlighted the massive influence that airlines have over changing their mileage program policies and had an influence on the DOT's initial probe into airline mileage programs.

Airlines for America, a trade organization and lobbying group for U.S. carriers, stated that frequent flyer programs allow for better competition among airlines. In a statement, the group maintained that U.S. carriers remain transparent about these programs.

Airlines need to be transparent about their mileage programs. Secretary Buttigieg notes in his aforementioned letter to the "Big Four" U.S. airlines that such programs are so influential here that many Americans may have point balances "substantial enough that they amount to part of their savings."

If unfair or deceptive practices are found in these programs, the DOT has the authority to investigate and take action against airlines and ticket agents. This is all in the entity's effort to maintain fair competition in American skies.