The Biden administration is examining the four largest U.S. airline frequent-flyer programs and how they devalue points that consumers have earned and frequently change the number of points or miles needed to book flights.

Transportation Secretary Pete Buttigieg wrote to the CEOs of American, Delta, Southwest and United on Thursday, asking each for a report on policies, fees and other features of their loyalty program.

Consumers often complain that airlines raise the number of points needed to earn a free flight and limit the number of seats that can be purchased with points.

Buttigieg said loyalty programs bring value to consumers, and people count on them to pay for vacations and trips to visit family.

“But unlike a traditional savings account, these rewards are controlled by a company that can unilaterally change their value,” he said in a statement issued by the Transportation Department. “Our goal is to ensure consumers are getting the value that was promised to them, which means validating that these programs are transparent and fair.”

Delta, Minnesota’s dominant carrier, said loyalty of members in its frequent-flyer program “means everything to us, and providing a meaningful rewards experience is the top priority within Delta’s SkyMiles Program.” Southwest highlighted that its points never expire, and said it books more seats with points than other airlines.

Airlines for America, a trade group that represents all four carriers targeted by Buttigieg, said millions of people enjoy participating in the loyalty programs.

“U.S. carriers are transparent about these programs, and policymakers should ensure that consumers can continue to be offered these important benefits,” a spokesperson for the group said.

Frequent-flyer programs were once based on the number of flights taken or miles flown. In recent years, however, they have been fueled by spending that consumers conduct using airline-branded credit cards. Income from the credit-card issuers has become an important source of airline revenue.

The Transportation Department and the Consumer Financial Protection Bureau held a hearing in May on the airline programs, at which they raised many of the issued covered in Buttigieg’s letter to airline CEOs. Witnesses included consumer advocates and officials from three smaller airlines, but no representatives of the big four airlines that are covered by the new inquiry.

The consumer-protection board said in a report for the hearing that it received more than 1,200 complaints about credit card rewards last year, an increase of more than 70% from pre-pandemic levels. Many hotels, retailers and other businesses also offer loyalty programs with credit cards.

— Associated Press

Red Lobster set to exit bankruptcy

After months of dozens of restaurant closings and headlines about “endless shrimp” woes, Red Lobster says it will soon exit from Chapter 11 bankruptcy protection.

A U.S. bankruptcy judge on Thursday approved the casual seafood chain’s reorganization plan, which includes a lender group led by asset manager Fortress acquiring the business.

The chain, which lost $76 million in 2023, shuttered dozens of its North American restaurants over recent months — both leading up to and during the bankruptcy process.

Red Lobster said Thursday that it expects to operate about 544 locations across the U.S. and Canada upon emerging from bankruptcy. That’s down from 578 disclosed as of May’s bankruptcy filing.

Once the deal is finalized, Red Lobster will also get a new CEO — Damola Adamolekun, former chief executive of P.F. Chang’s.

Verizon buying Frontier for $20 billion

Verizon is buying Frontier Communications in a $20 billion deal to strengthen its fiber network.

Verizon Communications Inc. said Thursday that the acquisition will also shore up its foray into artificial intelligence as well as connected smart devices.

Frontier has concentrated heavily on its fiber network capabilities over about four years, investing $4.1 billion upgrading and expanding its fiber network. It now gets more than half of its revenue from fiber products.

The price tag for Frontier, based in Dallas, is sizeable given its 2.2 million fiber subscribers across 25 states. Verizon has approximately 7.4 million Fios connections in nine states and Washington, D.C.

Frontier has 7.2 million fiber locations and has plans to build out an additional 2.8 million fiber locations by the end of 2026.

— From news services