EXACTLY!!!!

The last thing most sellers want to do is compete only on price, because the natural effect is that the price keeps going down, down, down. Instead, sellers of everything from cars to ketchup to airline seats try to convince consumers that their product is just a little bit better than their competitors' products, which would allow them to resist downward price pressure. Witness the billions of dollars sellers spent on advertisements. And one way airlines can do that is by using FFPs -- which essentially tell consumers that it's better for them to keep buying tickets on that airline because they will eventually get something in exchange for their loyalty. Granted, as prices continue to increase, this might be a less relevant factor, but it still is a factor -- at least the airlines (and I) believe it is.

Do you really think the airlines want to drive prices ever lower by competing only on price?