Originally Posted by scirel
Because if we pay for the miles anyway, even a fraction of their "true" value (whatever that is), then they're certainly not free. But if awards suddenly went away and prices didn't budge, well, then they are free.
Actually, I believe that the price would go up.
Airlines, of course, gives miles for travel, and certainly factor in the cost of the award tickets when pricing. However, they are not the only source of miles. Miles come from hotels, credit card issuers... And this companies, hoping to draw money from the clients of the airlines, buy miles to the airlines. Some companies outsourced their FFP, and the companies in charge of them often posts better results than the airline itself.