Originally Posted by
Unimatrix One
....Great for paid J and full Y flyers because the limitation of benefits for discount flyers means much more award availability (i.e. fewer people competing for award seats) ...The JMB program (and ANA's program) probably makes the most business sense from the airline's perspective. The US airlines have gone way too far in giving out miles and status to too many people, and the resulting liabilities have become a burden on the airlines and significantly diluted benefits for the true high-revenue flyers.
JL joining OW changes all that. Now those "readily available" award seats will be taken by other OW programs.
The most profitable part of every airline is their FF program. It is hardly a burden for the airlines, just look at their annual reports for their FF liability amount! More like a license to print money. The FF business model is predicated upon the majority of FF miles never being redeemed, and the airlines are in full control of the rules to make that happen. The Economist had a multi-page analysis of this a year or 2 ago, quite interesting reading and closely matching what has happened since then. To put FF miles into perspective, it is now the largest currency in circulation in the world (exceeding the value of US Dollars in circulation as either paper currency or current account balances).