Airlines Make More Money Selling Miles Than Seats (expressnews.com)

An anonymous reader shares a report: Does your wallet contain an airline-branded credit card? If so, your daily Starbucks visits, iTunes selections and dining habits serve a critical role in keeping the U.S. airline industry fat and happy. For carriers such as American Airlines, riding Citigroup Inc. plastic, or Delta, on American Express Co., these programs are a cash cow, a golden goose -- or any other fiscal livestock you care to conjure. Each mile fetches an airline anywhere from 1.5 cents to 2.5 cents, and the big banks amass those miles by the billions (alternative source), doling them out to cardholders each month. For the banks, people who pay annual fees for those cards in order to accumulate miles are the closest thing to a sure bet. These consumers typically have higher-than-average incomes and spend more on their cards, generating merchant fees for the banks. They also tend to maintain high credit scores, which means they pay their bills on time and banks experience fewer defaults. The airline-miles business, formally known as loyalty programs, has become a high-margin enterprise that's grown in size and value amid airline consolidation, with carriers keen to expand credit card rolls and see loyalty members spend more.

Comments

Re:Speaking of airlines

[swillden]

You're usually pretty safe from being bumped once you're actually on the plane though.

"Pretty safe", yes, but you've never been completely safe. That said, the FAA has some well-defined requirements about how they have to treat people who've been involuntarily bumped, which includes a hefty cash payment (equal, I believe, to the full round-trip fare) plus a seat on the next available flight (on any airline, in any class at or above the class you paid for). I've flown over a million miles, and I've been involuntarily bumped exactly once. I got a $600 check and a first class seat on another flight, on another airline, 30 minutes later. The seat they bought me was on a direct flight, so I actually got home before I would have if I hadn't been bumped. Oh, and they still gave me mileage credit for the flight they bumped me off of. All in all, I was quite happy with the arrangement.

Silly people, imagining that once they've paid for something they have any kind of rights.

You do have rights, but they don't include the right to refuse to exit the plane when the airline tells you to. Whatever the reason, whether it's a good one or not, if the flight attendants or captain tell you to get off, you get off or the police will be dragging you off. If they kicked you off involuntarily, and not as a result of anything you did, you do have a right to compensation and transportation.