<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Tino:
They could hand out 1,000,000 miles to every passenger this year, maintain the current number of available award seats, and the financial liability would not change!</font>
To some extent they
are a liability.
If I wanted, I could transfer miles to Hilton, then exchange for merchandise. Granted, some of the exchange rates are pretty poor, but this is how they limit the number of miles exchanged for merchandise - by giving poor conversions.
Otherwise, everyone would be getting tvs and bicycles for their miles, which would cost the airline cash.