[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.