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> In short, SkyMiles is no longer a frequent-flier program; it’s a big-spender program. This is probably how frequent-flier programs should have been run in t

> In short, SkyMiles is no longer a frequent-flier program; it’s a big-spender program. This is probably how frequent-flier programs should have been run in the first place. Airline don't care that you fly alot, they care that you are a profitable customer. That means business customers and the wealthy will still be their main clients. This just means they lose the churners and the price sensitive bargain hunters, which almost every airline would be happy to trade away for more business customers. It's a win for the airline as they keep their core customers happy as their rewards won't change and they'll lose the unprofitable customers who used their rewards programs alot without spending much. > A 2020 analysis by the Financial Times found that Wall Street lenders valued the major airlines’ mileage programs more highly than the airlines themselves. United’s MileagePlus program, for example, was valued at $22 billion, while the company’s market cap at the time was only $10.6 billion. This looks alot like car companies whose leasing arms became more profitable than their manufacturing arms for part of the 2000s. But wallstreet loves companies that they can easily value and this "conglomerate" style business has been out of favour for a while now. Sooner or later some airlines will spin out their rewards business into a separate company to get the maximum valuation from it. Just like how deregulation lead to the consolidation of airlines, I wouldn't be surprised to see only a couple of rewards programs that every airline uses in a decade. As usual PE will be the winner. I'd bet Blackstone or Apollo will roll up multiple programs into one or two uber rewards/credit card programs that are spun out into public companies. VISA and Mastercard won't care who owns them. As long as it drives more credit card usage, they'll be on board.

matwood 3y ago
> This looks alot like car companies Every successful company eventually becomes a bank. See also Apple.
- pixl97 3y ago
  Turns out usury is profitable!
  - contravariant 3y ago
    Can you borrow credits? Otherwise it's not usury but seignorage.
- kuchenbecker 3y ago
  There is an opportunity cost to letting that money sit and not work, and therefore companies trade use of money now for a gain later (lending money or investing). The more successful, the larger the pile of money and more likely to look bankish.
- lotsofpulp 3y ago
  For a less than useful definition of bank. Due to technology, the old use case of banks is mostly obviated. There is no technical reason everyone should not just have an electronic money account at the Fed itself for receiving and sending money. And earn the federal funds rate directly rather than have it go through a middleman who is basically just operating a database. And lending does not have much to do with receiving people’s cash deposits.
  - salawat 3y ago
    >There is no technical reason everyone should not just have an electronic money account at the Fed itself for receiving and sending money. Yet you complete leave out the non-technical reason why that's a terrible idea. Systemic Single-Point of Failure, extreme vulnerability political exploitation, no robustness or process/partition based discorrelation to stave off or slow down financial contagion. Robustness is entropic. It uses more energy, but gains in it's ability to remain up in the face of a myriad of quantifiable stimuli instead of falling apart at the slightest touch. All eggs in one basket is a bad idea. No one makes a good enough basket.
envsubst 3y ago
> deregulation lead to the consolidation of airlines Explain. I see a handful of identical mega corps with a government protected monopoly (regulations + access to airports). Hasn't regulation increased consolidation to share the cost of compliance? Like the pork barrel shops in the airport, why is this a private business at all?
- colingoodman 3y ago
  I presume they are referring to the airline deregulation act of 1978. There used to be dozens of regional airlines whereas now we notably have 3-4 giant corporations after decades of aggressive mergers and acquisitions. https://airandspace.si.edu/stories/editorial/airline-deregulation-when-everything-changed https://airandspace.si.edu/stories/editorial/airline-deregul...
  - kjkjadksj 3y ago
    You’d be surprised but there are still regional airlines. This is because a company like delta franchises some routes basically. You might go on a delta flight and ride on a delta plane, but the operating company is some almost unheard of regional one.
    - organsnyder 3y ago
      In many cases that's just to skirt around various regulations and union contracts.
      - kjkjadksj 3y ago
        I’d guess also you wouldn't have to handle the maintenance end of these smaller planes eg. your bombardiers and what have you if you’ve spun off all those flights
- maxfurman 3y ago
  GP is referring to the deregulation of the late 1970s. Before that, there were a large number of smaller regional airlines in the US, that have since mostly disappeared.
tw04 3y ago
>That means business customers and the wealthy will still be their main clients. I think you're grossly overestimating the fallout from this. I am the aforementioned business customer. Literally the only way you'd ever hit the dollar amounts they're looking for is flying multiple times across the Atlantic paying full fare business class - which I don't do. But I do fly multiple times a month across the continental US. Previously I would book Delta regardless of price for both business and personal travel due to status. They've made it basically unobtainable unless you're paying full fare first class on every flight AND booking your cars and hotel through them. Going forward I'll just book the cheapest flight available and drop their card. They will be losing at minimum 10s of thousands a year in profit from my travel and card spend alone.
- lotsofpulp 3y ago
  Merchant credit card fees are at most 3%. I doubt airlines pocket a big portion of their branded cards’ fees as profit, and I would bet they get less than even 1%. The vast majority of the fee probably goes to the banks and card networks. Even assuming 1%, for an airline to lose $10,000 in profit, you would have to be spending $10,000 / 0.01 = $1M per year on that credit card. And if you are spending a minimum of $1M on your credit card per year, I doubt you are spending your time optimizing “miles” and “points”. I assume there are lots of smart people working at airlines that can work out which of their policies earn and lose money, especially now that all the competition is minimal except on the most popular routes.
  - ScoobleDoodle 3y ago
    I imagine they meant the airline as a whole is losing out on the $10s of thousands due to lost loyalty resulting from removing convenience. Not just the 1%, but the whole spend is lost.
    - lotsofpulp 3y ago
      In that case, airlines have sub 5% profit margins, so $10,000 / 0.05 = $200k spend on flights before the airline comes close to earning $10k in profit.
NikolaNovak 3y ago
>> Sooner or later some airlines will spin out their rewards business into a separate company to get the maximum valuation from it. Air Canada spun out aeroplan, and then years later re-acquired it.
- TeMPOraL 3y ago
  That's the nature of financialized business, isn't it? Since they're only gaming the numbers, there isn't anything of substance happening when they spin out rewards this year, and reacquire it the next.
cm2187 3y ago
Keeping in mind this was really made for business flyers who enjoy the benefits of the miles personally for a ticket paid by the employer. I guess the switch creates an incentive for those travellers to go for the more expensive flight, not sure how that will go with employers. To be honest the whole approach always felt like some form of corruption/kick back to me. You give an incentive to the employee that is dissociated from the interest of their employer.
- ericmay 3y ago
  > You give an incentive to the employee that is dissociated from the interest of their employer. This is mitigated by the employer setting rates, per-diem, rules on what seats you can purchase, etc. and the employer can't use the points from the frequent flyer program anyway. If there's, say, a $50 fare difference and that causes an employee to choose a more expensive flight (because the comparable flights are comparable) because they get points it's fine and basically an added benefit. In consulting for example that's a stated benefit in employee handbooks. Of course that's not to say employees of companies can't go against the interest of their employer here, but it's up to the employer to set guidelines and for the employee to follow them.
  - brk 3y ago
    >and the employer can't use the points from the frequent flyer program anyway This isn't always true. Some employers insist you book through their internal travel department or use their corporate FF accounts, which kick all the mileage and hotel night benefits to them. It's not common, fortunately, but it does happen.
    - bluGill 3y ago
      Some of those companies have discovered that those travel departments are a profit center and so they can make more money by booking the most expensive economy seat.
    - SoftTalker 3y ago
      Yep I was just going to say I'm flying and staying in a hotel for a conference next month and although I have loyalty programs with the airline and the hotel I am getting zip for those because I had to book through my employer's travel system.
fortran77 3y ago
I've been a United "Global Services" customer for years. How to you reach this level? Spend! The threshold--which they don't publish--is around $75K/year spend gets you into it, adjusted a bit for region and VIPs.
leoh 3y ago
>This is probably how frequent-flier programs should have been run in the first place. Airline don't care that you fly alot, they care that you are a profitable customer. Wow, okay, big jump here buddy. What happened to being profitable and actually committed to offering a core competent service to customers?
- lotsofpulp 3y ago
  Airlines are sub 5% profit margin businesses, with huge risk factors. As the joke goes, “how do you become a millionaire? Start with a billion dollars and buy an airline”. It is only recently the airline business has had steady positive years, due to consolidation, and even then, COVID hit and almost wiped them out were they not bailed out.
  - leoh 3y ago
    Right. So they should ignore their core competency and operational excellence and become banks. Got it.
    - lotsofpulp 3y ago
      Source that they are they ignoring their core competency? Modifying a rewards programs should require a very miniscule portion of ann airline’s available labor hours, and aligning rewards to be proportionate to profitability seems like a common sense business move.
      - leoh 3y ago
        5% margins? Becoming banks? Scarce innovation in the space? Lack of cleanliness on airplanes? How depressed every other attendant seems to be these days? The safety issues we’re seeing with counterfeit parts?
        deleted 3y ago
        [deleted]
snowwrestler 3y ago
The points business is already being separated from the airlines; some of the “best” travel cards you can get like Chase Sapphire are not cobranded with one airline, but use a more generic points system that can convert to miles/points in many loyalty programs.
aidenn0 3y ago
> deregulation lead to the consolidation of airlines Assuming you're talking about the 1978 deregulation, I don't think that's the cause. Starting around about the same time (maybe under Reagan?) the US basically stopped enforcing the anti-trust laws that are on the books. This has led to mergers across the board, not just for the airlines.
finfrastrcuture 3y ago
some airlines have already done this, having fully owned subsidiaries. consider Lufthansa and their "Miles and More" subsidiary. that said, I doubt airlines will ever fully relinquish control over their loyalty programs - they are too critical to the core business and offer a 'secret sauce' of differentiation to what is an otherwise commoditized product (i.e. flying from point A to B).
tristor 3y ago
> That means business customers and the wealthy will still be their main clients. I am both of those things, have held status with Delta for a number of years along with a co-brand credit card that I run $60k-$100k/yr through. I typically take 15-20 trips per year, and when I'm /not/ flying on business I only fly first class/Delta One. The new program means where formerly I was always PM/DM each year in status, I would be lucky to hit GM without greatly changing my spending habits, and the lounge changes massively devalued even carrying a co-brand card. I live in a competitor's hub (Denver) and chose Delta over the competitors specifically because of better quality of hard product, better on time rates, and a good co-brand program with Amex (who I'm a loyalist for). I am actively investigating alternatives, and at this point am likely to cancel my Delta Amex (I'm keeping my Amex Plat of course) and switching to the United Club Infinite card as my primary travel card / credit card. Delta makes more money from their co-brand relationship with Amex now than they do from operating flights, and they're losing both of my business because of these changes. Business travelers almost only get booked into economy/main cabin in the US, because of corporate policies and no health and safety regulations in the US requiring higher tiers of service for long flights (EU residents generally get booked into business for transatlantic flights for healthy and safety reasons, DVT is no joke). Being able to maintain status off a reasonable amount of travel and co-brand spend so I get upgraded into FC on business flights and can buy FC with some perks on personal flights is the core value proposition of airline frequent flyer programs. Delta just killed that for their core customer base. To be clear, I had already bought 6 Delta One tickets for next year, and I haven't even booked my end-year trips yet. I purchased 7 Delta One tickets this year and 6 domestic First Class tickets, I'm also on track to run $90k through my co-brand card this year. They're losing a not inconsequential amount of business with my departure to United, which when they're finished will have over 100k sqft of lounge space in the Denver airport, plus a Polaris lounge, and offers unlimited lounge access with their top-tier cobrand card and I can attain status even /easier/ than the /current/ medallion program, much less the new one. With this change the only advantage Delta gives me for having to eat a connection on every domestic flight to go through SLC/ATL/LAX/JFK, is that they have free wi-fi on board. That's great, I guess, but I hardly ever even use it, I'd rather unplug and read a book while I'm in the air. The hard product is marginally better on domestic Delta flights, but Polaris is actually better than Delta One anyway, and United has better international partners in Star Alliance, like Singapore Airlines, than Delta does (although I do love KLM). I find the changes in the medallion program to be incredibly short-sighted, and I am expecting it to backfire horribly. Delta built a lot of brand loyalty with travelers. People like me who will choose Delta over anyone else even though I'm in a non-hub location and it implies always eating a connection, partly because the Sky Clubs were high quality lounges, broadly available even in non-hub sites, and they had a solid FF program w/ good co-brand perks. They've just lost most of their advantage except their operational quality, which also has taken a nosedive post-pandemic. Explain to me why I would choose Delta over United, when I live in a United hub and get can get better perks on the co-brand card, for someone who can afford to pay for multiple full-fare business-class international tickets a year?
matteotom 3y ago
>Sooner or later some airlines will spin out their rewards business into a separate company to get the maximum valuation from it. Isn't this effectively what we have with Chase, Amex, Capital One, and Citi? Each earns points that can be used directly or transferred to airlines and hotels. And then as further evidence, Avios points can already be used across several airlines (BA, Iberia, Aer Lingus, Qatar, and soon Finnair). Not to mention the ability to book flights on different airlines with miles sometimes (eg booking Delta from KLM).
- Veliladon 3y ago
  >Isn't this effectively what we have with Chase, Amex, Capital One, and Citi? Each earns points that can be used directly or transferred to airlines and hotels. Not really. Those companies aren't sellers of points, they horse trade the interchange fee. They're basically giving away a portion of their revenue just to stay competitive. If I have the monopoly of buying miles from airlines at 1c/mile and then sell them to co-branded credit card companies for 1.3-1.5c, what I have is a fucking license to print money.

matwood 3y ago

> This looks alot like car companies Every successful company eventually becomes a bank. See also Apple.

pixl97 3y ago
Turns out usury is profitable!
- contravariant 3y ago
  Can you borrow credits? Otherwise it's not usury but seignorage.
kuchenbecker 3y ago
There is an opportunity cost to letting that money sit and not work, and therefore companies trade use of money now for a gain later (lending money or investing). The more successful, the larger the pile of money and more likely to look bankish.
lotsofpulp 3y ago
For a less than useful definition of bank. Due to technology, the old use case of banks is mostly obviated. There is no technical reason everyone should not just have an electronic money account at the Fed itself for receiving and sending money. And earn the federal funds rate directly rather than have it go through a middleman who is basically just operating a database. And lending does not have much to do with receiving people’s cash deposits.
- salawat 3y ago
  >There is no technical reason everyone should not just have an electronic money account at the Fed itself for receiving and sending money. Yet you complete leave out the non-technical reason why that's a terrible idea. Systemic Single-Point of Failure, extreme vulnerability political exploitation, no robustness or process/partition based discorrelation to stave off or slow down financial contagion. Robustness is entropic. It uses more energy, but gains in it's ability to remain up in the face of a myriad of quantifiable stimuli instead of falling apart at the slightest touch. All eggs in one basket is a bad idea. No one makes a good enough basket.

envsubst 3y ago

> deregulation lead to the consolidation of airlines Explain. I see a handful of identical mega corps with a government protected monopoly (regulations + access to airports). Hasn't regulation increased consolidation to share the cost of compliance? Like the pork barrel shops in the airport, why is this a private business at all?

colingoodman 3y ago
I presume they are referring to the airline deregulation act of 1978. There used to be dozens of regional airlines whereas now we notably have 3-4 giant corporations after decades of aggressive mergers and acquisitions. https://airandspace.si.edu/stories/editorial/airline-deregulation-when-everything-changed https://airandspace.si.edu/stories/editorial/airline-deregul...
- kjkjadksj 3y ago
  You’d be surprised but there are still regional airlines. This is because a company like delta franchises some routes basically. You might go on a delta flight and ride on a delta plane, but the operating company is some almost unheard of regional one.
  - organsnyder 3y ago
    In many cases that's just to skirt around various regulations and union contracts.
    - kjkjadksj 3y ago
      I’d guess also you wouldn't have to handle the maintenance end of these smaller planes eg. your bombardiers and what have you if you’ve spun off all those flights
maxfurman 3y ago
GP is referring to the deregulation of the late 1970s. Before that, there were a large number of smaller regional airlines in the US, that have since mostly disappeared.

tw04 3y ago

>That means business customers and the wealthy will still be their main clients. I think you're grossly overestimating the fallout from this. I am the aforementioned business customer. Literally the only way you'd ever hit the dollar amounts they're looking for is flying multiple times across the Atlantic paying full fare business class - which I don't do. But I do fly multiple times a month across the continental US. Previously I would book Delta regardless of price for both business and personal travel due to status. They've made it basically unobtainable unless you're paying full fare first class on every flight AND booking your cars and hotel through them. Going forward I'll just book the cheapest flight available and drop their card. They will be losing at minimum 10s of thousands a year in profit from my travel and card spend alone.

lotsofpulp 3y ago
Merchant credit card fees are at most 3%. I doubt airlines pocket a big portion of their branded cards’ fees as profit, and I would bet they get less than even 1%. The vast majority of the fee probably goes to the banks and card networks. Even assuming 1%, for an airline to lose $10,000 in profit, you would have to be spending $10,000 / 0.01 = $1M per year on that credit card. And if you are spending a minimum of $1M on your credit card per year, I doubt you are spending your time optimizing “miles” and “points”. I assume there are lots of smart people working at airlines that can work out which of their policies earn and lose money, especially now that all the competition is minimal except on the most popular routes.
- ScoobleDoodle 3y ago
  I imagine they meant the airline as a whole is losing out on the $10s of thousands due to lost loyalty resulting from removing convenience. Not just the 1%, but the whole spend is lost.
  - lotsofpulp 3y ago
    In that case, airlines have sub 5% profit margins, so $10,000 / 0.05 = $200k spend on flights before the airline comes close to earning $10k in profit.

NikolaNovak 3y ago

>> Sooner or later some airlines will spin out their rewards business into a separate company to get the maximum valuation from it. Air Canada spun out aeroplan, and then years later re-acquired it.

TeMPOraL 3y ago
That's the nature of financialized business, isn't it? Since they're only gaming the numbers, there isn't anything of substance happening when they spin out rewards this year, and reacquire it the next.

cm2187 3y ago

Keeping in mind this was really made for business flyers who enjoy the benefits of the miles personally for a ticket paid by the employer. I guess the switch creates an incentive for those travellers to go for the more expensive flight, not sure how that will go with employers. To be honest the whole approach always felt like some form of corruption/kick back to me. You give an incentive to the employee that is dissociated from the interest of their employer.

ericmay 3y ago
> You give an incentive to the employee that is dissociated from the interest of their employer. This is mitigated by the employer setting rates, per-diem, rules on what seats you can purchase, etc. and the employer can't use the points from the frequent flyer program anyway. If there's, say, a $50 fare difference and that causes an employee to choose a more expensive flight (because the comparable flights are comparable) because they get points it's fine and basically an added benefit. In consulting for example that's a stated benefit in employee handbooks. Of course that's not to say employees of companies can't go against the interest of their employer here, but it's up to the employer to set guidelines and for the employee to follow them.
- brk 3y ago
  >and the employer can't use the points from the frequent flyer program anyway This isn't always true. Some employers insist you book through their internal travel department or use their corporate FF accounts, which kick all the mileage and hotel night benefits to them. It's not common, fortunately, but it does happen.
  - bluGill 3y ago
    Some of those companies have discovered that those travel departments are a profit center and so they can make more money by booking the most expensive economy seat.
  - SoftTalker 3y ago
    Yep I was just going to say I'm flying and staying in a hotel for a conference next month and although I have loyalty programs with the airline and the hotel I am getting zip for those because I had to book through my employer's travel system.

fortran77 3y ago

I've been a United "Global Services" customer for years. How to you reach this level? Spend! The threshold--which they don't publish--is around $75K/year spend gets you into it, adjusted a bit for region and VIPs.

leoh 3y ago

>This is probably how frequent-flier programs should have been run in the first place. Airline don't care that you fly alot, they care that you are a profitable customer. Wow, okay, big jump here buddy. What happened to being profitable and actually committed to offering a core competent service to customers?

lotsofpulp 3y ago
Airlines are sub 5% profit margin businesses, with huge risk factors. As the joke goes, “how do you become a millionaire? Start with a billion dollars and buy an airline”. It is only recently the airline business has had steady positive years, due to consolidation, and even then, COVID hit and almost wiped them out were they not bailed out.
- leoh 3y ago
  Right. So they should ignore their core competency and operational excellence and become banks. Got it.
  - lotsofpulp 3y ago
    Source that they are they ignoring their core competency? Modifying a rewards programs should require a very miniscule portion of ann airline’s available labor hours, and aligning rewards to be proportionate to profitability seems like a common sense business move.
    - leoh 3y ago
      5% margins? Becoming banks? Scarce innovation in the space? Lack of cleanliness on airplanes? How depressed every other attendant seems to be these days? The safety issues we’re seeing with counterfeit parts?
      - deleted 3y ago
        [deleted]

snowwrestler 3y ago

The points business is already being separated from the airlines; some of the “best” travel cards you can get like Chase Sapphire are not cobranded with one airline, but use a more generic points system that can convert to miles/points in many loyalty programs.

aidenn0 3y ago

> deregulation lead to the consolidation of airlines Assuming you're talking about the 1978 deregulation, I don't think that's the cause. Starting around about the same time (maybe under Reagan?) the US basically stopped enforcing the anti-trust laws that are on the books. This has led to mergers across the board, not just for the airlines.

finfrastrcuture 3y ago

some airlines have already done this, having fully owned subsidiaries. consider Lufthansa and their "Miles and More" subsidiary. that said, I doubt airlines will ever fully relinquish control over their loyalty programs - they are too critical to the core business and offer a 'secret sauce' of differentiation to what is an otherwise commoditized product (i.e. flying from point A to B).

tristor 3y ago

> That means business customers and the wealthy will still be their main clients. I am both of those things, have held status with Delta for a number of years along with a co-brand credit card that I run $60k-$100k/yr through. I typically take 15-20 trips per year, and when I'm /not/ flying on business I only fly first class/Delta One. The new program means where formerly I was always PM/DM each year in status, I would be lucky to hit GM without greatly changing my spending habits, and the lounge changes massively devalued even carrying a co-brand card. I live in a competitor's hub (Denver) and chose Delta over the competitors specifically because of better quality of hard product, better on time rates, and a good co-brand program with Amex (who I'm a loyalist for). I am actively investigating alternatives, and at this point am likely to cancel my Delta Amex (I'm keeping my Amex Plat of course) and switching to the United Club Infinite card as my primary travel card / credit card. Delta makes more money from their co-brand relationship with Amex now than they do from operating flights, and they're losing both of my business because of these changes. Business travelers almost only get booked into economy/main cabin in the US, because of corporate policies and no health and safety regulations in the US requiring higher tiers of service for long flights (EU residents generally get booked into business for transatlantic flights for healthy and safety reasons, DVT is no joke). Being able to maintain status off a reasonable amount of travel and co-brand spend so I get upgraded into FC on business flights and can buy FC with some perks on personal flights is the core value proposition of airline frequent flyer programs. Delta just killed that for their core customer base. To be clear, I had already bought 6 Delta One tickets for next year, and I haven't even booked my end-year trips yet. I purchased 7 Delta One tickets this year and 6 domestic First Class tickets, I'm also on track to run $90k through my co-brand card this year. They're losing a not inconsequential amount of business with my departure to United, which when they're finished will have over 100k sqft of lounge space in the Denver airport, plus a Polaris lounge, and offers unlimited lounge access with their top-tier cobrand card and I can attain status even /easier/ than the /current/ medallion program, much less the new one. With this change the only advantage Delta gives me for having to eat a connection on every domestic flight to go through SLC/ATL/LAX/JFK, is that they have free wi-fi on board. That's great, I guess, but I hardly ever even use it, I'd rather unplug and read a book while I'm in the air. The hard product is marginally better on domestic Delta flights, but Polaris is actually better than Delta One anyway, and United has better international partners in Star Alliance, like Singapore Airlines, than Delta does (although I do love KLM). I find the changes in the medallion program to be incredibly short-sighted, and I am expecting it to backfire horribly. Delta built a lot of brand loyalty with travelers. People like me who will choose Delta over anyone else even though I'm in a non-hub location and it implies always eating a connection, partly because the Sky Clubs were high quality lounges, broadly available even in non-hub sites, and they had a solid FF program w/ good co-brand perks. They've just lost most of their advantage except their operational quality, which also has taken a nosedive post-pandemic. Explain to me why I would choose Delta over United, when I live in a United hub and get can get better perks on the co-brand card, for someone who can afford to pay for multiple full-fare business-class international tickets a year?

matteotom 3y ago

>Sooner or later some airlines will spin out their rewards business into a separate company to get the maximum valuation from it. Isn't this effectively what we have with Chase, Amex, Capital One, and Citi? Each earns points that can be used directly or transferred to airlines and hotels. And then as further evidence, Avios points can already be used across several airlines (BA, Iberia, Aer Lingus, Qatar, and soon Finnair). Not to mention the ability to book flights on different airlines with miles sometimes (eg booking Delta from KLM).

Veliladon 3y ago
>Isn't this effectively what we have with Chase, Amex, Capital One, and Citi? Each earns points that can be used directly or transferred to airlines and hotels. Not really. Those companies aren't sellers of points, they horse trade the interchange fee. They're basically giving away a portion of their revenue just to stay competitive. If I have the monopoly of buying miles from airlines at 1c/mile and then sell them to co-branded credit card companies for 1.3-1.5c, what I have is a fucking license to print money.