Originally Posted by pushback
Regardless of usage there are still fixed costs associated with the administration of the program. The miles are also carried as a liability on the balance sheet. There can be costs associated with carrying liabilties on a balance sheet such as being viewed as more of a credit risk which implies the cost of borrowing goes up.
Yes there is a cost. There are few marketing strategies that do not cost money. FF miles are a marketing expense. My airline gets more business than they would without a FF program. Television, radio, print, naming arenas, etc. all add to the cost of doing business which has to be paid in some way.