[handle584]

On average yes, but for savvy people they are worth much more for biz/first class travel. There is even a whole industry built around mileage booking.

Why subsidize? There is no subsidize at all, an empty seat on a flight is an empty seat unsold, any money they can make back is extra profit. Airlines do not make money by flying people nowadays, but by selling miles in bulk to banks [0].

[0]: https://youtu.be/ggUduBmvQ_4

[lxgr]

> There is no subsidize at all, an empty seat on a flight is an empty seat unsold, any money they can make back is extra profit.

This completely disregards the opportunity cost of being able to sell the same seat. Even if the airline is absolutely unable to sell the empty seats cheaper, consider what consistently giving away seats for free would do to the remaining paid seats...

> Airlines do not make money by flying people nowadays, but by selling miles in bulk to banks

They certainly make some money from this, but definitely not the bulk, or even all of it. Don't believe everything you hear on the Internet, even (or maybe especially) if it's presented in a shiny, high production value video.

[handle584]

What you said is true, but it pertains to how to balance the game once it started, while I was giving a explanation why the game is started in the first place.

> consider what consistently giving away seats for free would do to the remaining paid seats

After all those years it is still fairly niche because few people knew about how it actually works, and it took quite a bit of learning, with dedicated forum [0] existing for decades. It shows even in this thread, and I would rank hn ppl very tech-savvy. Also the award seats are not given out free, since airlines got paid when they sold miles to banks.

> but definitely not the bulk

Even CNN thinks otherwise: Frequent flyer programs: The most profitable part of the airline industry [1]. If you think about it a bit, this is basically money printing under little oversight. What business can be more profitable than that?

I chose that video because it does explain why and is often quoted to newcomers in the community, hence its view count. I myself have been in this game for a couple years and my family almost travel solely on international award tickets now, so it is not just something heard over the Internet.

[0]: https://en.wikipedia.org/wiki/FlyerTalk

[1]: https://edition.cnn.com/2024/09/08/business/frequent-flyer-p...

[lxgr]

Oh, I don’t doubt that mile optimization/churning works or that it can be very lucrative.

I do however very much doubt that it’s somehow core to the economics of airlines. I think that the real power of rewards programs is that they exploit the principal-agent problem of business travel, with an added bonus of many people being very bad at redemptions and realizing how much they’re often overpaying for a few extra miles or status.