Originally Posted by pinniped

Another thing to consider is that when FFP's were invented, they were probably considered to be a niche marketing promotion directly at business travelers. That is, they were targeted at a luxury demographic and intended for business development, not to drive their own profits within the program itself. Air travel in 1980 was still primarily a luxury. I remember saving money for two years to afford 1 trip to Europe. We were (and still are) middle class, and the idea of getting on a large jet to fly to Rome was considered a once-in-a-lifetime thing in the 70's or early 80's. We didn't enroll in the FFP - didn't even know what it was!

Then the airline industry changed, and now anybody of middle-class means can take a long weekend in Europe if they choose - spending about 1/5th in terms of real dollars to get there. Air travel 25 years ago was luxury: now it's mass-transit, much like riding a train. At some point the airlines figured out that the FFP's had to go mass-market as well, and they began to evolve into the currency that they are today. Now, instead of being a little arm of the marketing department, the FFP's are profit centers in and of themselves. Not that it would ever happen, but if they spun it off, I'd be a lot more apt to buy stock in AAdvantage than I would in AMR!