Originally Posted by
AA_EXP09
For a revenue ticket, anything above the CASM for that particular flight.
For an award, anything that doesn't displace a revenue pax.
I disagree - From AA's 2012 10K filing:
The Company’s total liability for future AAdvantage award redemptions for free, discounted or upgraded travel on American, American Eagle or participating airlines as well as unrecognized revenue from selling AAdvantage miles was approximately $1.6 billion (and is recorded as a component of Air traffic liability on the accompanying consolidated balance sheets) at December 31, 2011
So to the extent that the CASM of the particular flight is less than the value of the miles as carried as a liability on AA's books, AA can make a paper profit on the award (Standard awards are good for AA this way. If they value miles at 0.02/mi, then the difference between $1000 and the CASM is booked as profit). And I have no idea how partner rewards are accounted for between the airlines.