Originally Posted by inlanikai
As one who has been in a FF program since they started, I can say for certain that after 24 years if they were not a net economic benefit to the airlines they would have closed them down without even thinking about it.
They have fine tuned the program, as far as maximizing ways to make money by "selling" miles and at the same time diminishing their value by upping the miles for certain awards and minimizing availability.
I don't agree that this is necessarily the case. The structure of some FF schemes has conditioned those airlines' markets into behaviour that is financially ruinous for the airlines.
For example, if you can depend on unlimited free upgrades into premium classes, why would you spend the money buying a premium class ticket? Is it any surprise that some airlines fill their premium cabins all the time, but sell very few premium class fares?
Of course, the airlines concerned may now find that they can't easily backtrack on that part of their FF scheme for fear of losing even more business to competitors who are still giving away their premium class product for free. But I wouldn't say that this could properly be described as a FF scheme operating as a net economic benefit to the airline, nor of there being fine-tuning to the airline's advantage.