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AIRLINES : Court Rules Against Frequent-Flier Change

December 17, 1993|From Times Staff and Wire Reports

American Airlines breached a contract with frequent fliers by retroactively changing rules for redeeming mileage awards, the Illinois Supreme Court has ruled. The court allowed the frequent fliers to sue for damages, which industry analysts and lawyers said could dissuade other airlines from changing frequent-flier programs. The court ruled that American had entered a contractual relationship with its frequent fliers and could not unilaterally change the rules. The Ft. Worth-based airline contended that federal law preempted state regulation of fares, service or routes. But the court decided state consumer laws can be applied to frequent-flier incentives.

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