I'd argue frequent flyer programs are one of the best ideas the airlines ever had. I mediate it would be any capitalist's dream to be able to make hundreds of millions of dollars selling a "currency" where you control every aspect of the earnings and redemption rates.
If the airlines want to change how many miles they give to members,they can achieve that. If they want to change how many miles it takes to "buy" something, they can achieve that as well. Heck, and you don't even own the miles you "earn" from the airlines -- instead the airlines achieve.
Historically frequent flyer programs are the only consistently profitable part of airlines' operations. American might not even be in trade if it weren't for Citi buying hundreds of millions of dollars worth of miles from them upfront when they were in Chapter 11.
But there's one huge mistake I mediate the airlines are making. Let me elaborate...
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Source: boardingarea.com