I am not trying to be argumentative just for the sake of being argumentative, nsx, and I think it is a great analysis, but I really do not think the airlines are selling miles to the credit card companies at a penny a mile any more. I think they once did, that number got publicized, and that figure sticks in everyone's mind, including my own. But I think one of the reasons that new credit card sign-up bonuses have been so lucrative is that the airlines sold miles to the credit card companies at an extremely low price when they needed cash. The airlines justified it not only because they badly needed the cash, but also because filling a seat when excess capacity costs almost nothing - just a little more fuel to compensate for the weight. Now that excess capacity has been largely eliminated, most frequent flier seat redemptions are done at a loss. So devaluations occur, but not so blatantly that it causes too many people to notice. Kind of like the lobster that does not jump out of the water because it is warmed up gradually.