Originally Posted by Stranger

So?

Why does it have to be that way? How did Aeroplan work before the current structure was put in place? Surely they did make money on points sold to CIBC? Other airlines don't charge a fuel surchage, and they do manage to make their FF program a profit center.

Bottom line: your statement can't be true. At least in a broad sense. Could be that the current accounting setup makes it appear that way, but as we know accounting is unavoidably an exercise in creative writing. Regardless of fuel price, the marginal seat cost is minimal. And if the seat would otherwise go empty there is no income loss either. Underlying economics are independent of the AC/AE arrangement and how they account for their transactions. Real issue is where (AC vs. AE) do the accountants want the profit to show up.