| 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... |
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.