How many people have airline credit cards? I think there are a lot of people who sort of pay attention to airlines frequent flyer programs. Maybe not the extent of paying a significantly higher fare for a ticket but not always the cheapest. Also, some of these people will just go to the airlines site to book tickets and only look around if the fare seems excessive.

On the topic of credit cards - the banks pay a lot of $$$$ to the airlines for those miles, and with restrictive redemptions, the liability isn't anywhere near its book value.

DL won't scrap its FF program since AMEX would have a fit and they are the ones who bailed out DL last time. Air Canada spun off Aeroplan and made a lot of money.

And don't forget alliances - no FF program, No Star Alliance, or OneWorld, or SkyTeam. No alliance means you get no feeder traffic at either end of your routes, no codeshares that allow you to pretend to be bigger than you are, no revenue from other airline FF redemptions for your seats, no round the world tickets (OK I don't imagine that is significant) and reduced ability to have exclusive corporate travel due to reduced destinations etc.

(Yes, Orbitz etc can still stitch you into a booking, as long as you still interline, but that will still be a big drop in bookings vs Orbitz etc + all your airline alliance partners etc).

Oh - and of course, no FF program and therefore no alliance means no reason for every other airline to compete against you on profitable routes forcing you to compete on price which of course doesn't work if you have a higher cost basis than the competition and no ability to run some routes as loss leaders to attack other airlines since you have no safe routes to rely on for income.