Originally Posted by
Cathay Dragon 666
While I do see the logic in this, and realized to accounting miles = cash. However, there is still a huge difference in reality, miles redeemed doesn't earn them extra revenue, cash upgrade does. They want to discouraged people with mileage redemption, but encourage people to hand them more cash.
Actually, to nit pick here but it matters....mileage redeemed ARE translated into accounting revenue which falls to earnings. Although you are correct it's not (consolidated) cash flow, but generally mgmt incentives are tied to earnings not cash flow. And earnings is an accounting concept, and it indeed gets larger with mileage bookings.
They also care about public print things like yields. I am not sure where mileage yields vs cash upgrade yields will fall but overall neither is very high yielding IMO.