<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by OzFlyer:
Airlines are starting to think like this and as note that people will pay “agents” 2.5c per mile, while the airline only values the miles @ 1c. Thus again in order to maximise revenue the airlines started selling points to the public at 2.5c each! Externally this seems quite hypocritical but it is all about maximising the revenue for the airline.
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In general what you say is correct. the problem is that on their books the airlines do not value miles anywhere close to 1 cent/mile. They are valued at roughly their incremental cost for providing the travel, which is more along the lines (in rough order of magnitude) of less than
.1 cent per mile, or $25 for a R/T within the US for example.