Capacity cuts are under way, but this "game plan" is primarily the result of the primary input cost - fuel - roughly doubling in recent months. As a result, prices for tickets are, and should, and *need* to rise, if airlines are to remain profitable (and therefore, in business). Leisure travelers are the most price sensitive, and given the higher prices, will likely become a smaller portion of the pie while prices remain high.

If you value miles by their purchasing power of free market goods, then if 25,000 miles + $50 in fees gets you a ticket you would pay $550 for otherwise, they are worth 2 cents each to you. If 35,000 miles + $100 in fees gets you a ticket that you would have paid $800 for, they are still worth 2 cents each. Accordingly, as prices rise but mile redemption levels remain constant, the miles are actually appreciating as a currency. If redemption levels rise (e.g., needing 35K miles instead of 25K miles for the same ticket), their value will depend upon the movement of the free market price of the tickets they buy.

My observation has been that price increases have outpaced mile redemption (and fee) increases, thereby resulting in frequent flier miles being worth more - not less - in the recent year. This may certainly change, but I do not suspect it will much.