You’ve been a loyal airline customer, forsaking other carriers so you can rack up frequent-flyer miles to redeem for free trips, upgrades, and other perks. Then the airline changes the rules, devaluing your miles or blocking you from cashing them in. What can you do?
For some fed-up frequent flyers, the solution is to go to court.
The U.S. Supreme Court this month heard oral arguments in a lawsuit filed by a Minnesota man who was kicked out of the former Northwest Airlines WorldPerks program. Northwest, now part of Delta Air Lines (DAL), said he abused his membership by complaining too much. A federal court in Illinois gave the go-ahead last February to a class-action suit (PDF) from members of United Airlines’ (UAL) frequent-flyer program who lost benefits following its merger with Continental. And in July, the Superior Court of Québec approved a class-action suit against the company that manages Air Canada’s (AC/B:CN) frequent-flyer program.
Those suits are among “hundreds, if not thousands” of court cases filed annually against airline loyalty programs, says Randy Petersen, who runs a Colorado Springs-based consulting business and a magazine, InsideFlyer, devoted to the miles programs. Most of these cases are filed in small-claims courts, and Petersen says airlines almost always lose there. Small-claims courts generally limit damage awards to a few thousand dollars, and airlines don’t want to go to the expense of defending themselves.
Passengers hoping for a bigger payout may be disappointed: In 1995 the Supreme Court ruled that the 1978 Airline Deregulation Act barred passengers from using state consumer-fraud laws to attack frequent-flyer programs that retroactively change their rules.
In the case heard recently by the Supreme Court, Rabbi S. Binyomin Ginsberg is trying a slightly different approach. He has accused Northwest of violating Minnesota breach-of-contract laws when it booted him from the WorldPerks program in 2008, stripping him of hundreds of thousands of miles he had earned to attain Platinum Elite status. His suit seeks $5 million in damages. Northwest said Ginsberg abused his membership by filing 24 complaints in less than 8 months over tarmac delays and lost or late luggage. The airline said it had compensated him with travel vouchers, cash, and bonus miles. Ginsberg contends that his complaints were legitimate. “It was never, like, about too much salt on the peanuts,” he told the Minneapolis StarTribune.
The justices seemed skeptical, though, with some saying it would be impractical to let state courts handle frequent-flyer disputes. The purpose of the 1978 deregulation law was to “let the free market handle it, and there will be no state regulation,” Justice Antonin Scalia said. Indeed, some justices wondered whether frequent-flyer programs can be considered contracts at all, since they usually give the airline unlimited discretion to change the rules or expel members.
“The average frequent flyer is totally unaware of the terms and conditions,” consultant Peterson says. “All of us believe that those are our miles, while the terms and conditions say they are the property of the airline. All the programs have the right to adjust any benefits and change things, without due notice.”
The Supreme Court is to decide the WorldPerks case by June. Meanwhile, aggrieved travelers keep going to court. In October a New Jersey couple sued United for allegedly conducting unfair practices in the redemption of miles for hotel rooms and car rentals. In another case against United, a Maryland man accused the airline of deliberately miscalculating the number of miles he had flown. United has said both suits are “without merit.”