The 7th Civil Court of Recife dismissed a lawsuit filed by seven plaintiffs seeking authorization for the free use and trading of accumulated miles in airline loyalty programs.
As reported by Aeroin, our affiliate media in Brazil, the plaintiffs were participants in the loyalty programs of the airlines Azul, GOL, and LATAM. They argued that they had always redeemed points from the program for their benefit and that of third parties in the way they found most suitable, considering the supposed burdensome nature of the program.
In the face of recent changes to the loyalty program regulations, the plaintiffs claimed that the number of beneficiaries that users could indicate was limited, the sale of miles was prohibited, and the user experience was limited. Therefore, they filed the lawsuit requesting that free use and trading of the accumulated miles in the Latam Pass loyalty program be authorized.
A verdict was issued dismissing the initial requests and, in its reasoning, the court accepted the defense argument presented by LBCA, which represents LATAM. It found that there was no abusiveness in the clause limiting the issuance to more than 25 passengers imposed in the loyalty program regulations, and in the other clauses challenged by the plaintiffs. It was understood that the loyalty program is free to join, and from that membership, free trading was not intended, it being established in the regulations that the miles/points are personal and non-transferable. Therefore, if they did not agree, they simply should not join the program.
Ruling against the Sale of Miles
In the ruling, the judge emphasized: «The plaintiffs own the miles, but their powers of disposition are not unlimited as they are outlined in the regulations, from the beginning of the membership. Thus, even the points/miles acquired at a cost were obtained in accordance with the rules of the regulations of the companies being sued, paying attention to these, otherwise they would violate the impossibility of being a currency in itself, as there would be no differentiation of values, as they claim – if it is more advantageous to acquire tickets with miles, even at a cost, there is no equality between these and the cash amount – the pros and cons of social legal relationships must be observed«.
The decision also noted: «The modifications of the regulations here challenged, ‘clauses (i) 6.2.1 of the TUDOAZUL program regulations; (ii) 2.19, «c» and «d» of the LATAM PASS program and (iii) 13.3.1 of the SMILES program’, limiting the number of beneficiaries that users could indicate within a certain period, do not violate the principles of the agreements analyzed, since from the membership, the plaintiffs were aware that the miles were personal and non-transferable, knowing that they could not use them as currency, under the penalties already provided. The clandestine sale of these, as the plaintiffs confessed to having done, goes against the essence of the personal bonuses and what was intended with the membership itself, there is no disproportionality in the limitation of this«.
The sale of miles or loyalty points has been a topic of debate in the aviation sector for years. Some argue that passengers should have the freedom to trade their accumulated miles, claiming that since they have earned them through loyalty and spending, they should be free to use them as they see fit. However, airlines argue that miles are a way to reward customer loyalty and are not a tradable currency. Airlines also fear that the sale of miles could lead to fraud and the devaluation of the loyalty program. This recent ruling in Brazil seems to support the stance of the airlines and may set a precedent for similar cases in the future.
