Originally Posted by
sbm12
Not really, though. The volume of points sold at "list" price is spectacularly low compared to those sold to partners or distributed to passengers at lower rates. They have a high MSRP so they can constantly be on sale as a "great deal" without actually killing the margins.
The loyalty programs are definitely profitable to the airlines, but I don't think claiming a 50% margin across the board hold up.
But what is the actual cost of carrying an incremental passenger? It wouldn't surprise me if even points sold at discount to partners have a 50% margin or higher, depending on how you do the accounting.
I don't see how a bank could disrupt the business - they don't have already-flying planes where they can board an additional passenger at nearly no cost.