First of all there are very few examples where this is in play. In the Magazine for Miles campaigns, you really don't see airlines paying for any of those miles to dissapear, rather there is no fee since publishers seek out this artificial exchage of miles for magazines to satisfy certain requirements for that to count as "circulation" and all of them have used this ploy for years to build up circulation so they may in turn charge a higher premium to advertisers. As noted, I don't beleive airlines pay for that since the magazine guys typically have been nice to stimulate the dead part of the airlines database - those without miles to redeem.

Now, I think you may be making a false assumption in "What financial incentive do the airlines have for reducing their outstanding miles?" Truth is while many people wonder about liability, airlines in general could not care less about this liability and thus have no real incentive to get miles off thier books - which is why all these years there are very few efforts to really do anything in this area. Besides, there's really nothing in this world better for redemption value for them than the use of an empty seat.

The reality, my guess - and it's just a guess is that this amount is less than a tenth of a penny per mile, which is why not many have convinced airlines of any other reason.

Since most of the miles appearing on books these day or pre-paid to the airline from partners, would you worry about burgeoning liability? I'd put the moeny in the bank that's necessary to cover it from there and declare the rest of it profit.....