Following some of the threads many FT'ers still think ff miles are rewards from the airlines for loyalty and using their services. That was true when they originally created the system but now we are just an unimportant leftover in the middle of a gigantic pyramid scheme.
Several years back the legacy carriers created a second business arm in addition to their primary (flying people to destinations), called selling miles. Any company from banks to credit card firms, from flower shops to gift stores could buy miles from the carriers to offer to their clients. These mile sales added up to billions of pure revenue for the airlines (no delivery of any kind of service to the companies who bought them). So, to continue this money flow they signed up more and more companies. Now with the opportunity to earn miles with nearly every transaction, there are probably trillions of miles out and the percentage of people actually accumulating enough miles to redeem is growing rapidly. Now we are getting to the point where the pyramid scheme starts to unravel. First step: Avoid, delay (no award seats available) or dilute the delivery of the product you sold. Thats where we are now!
You know what the second step iin a classic pyramid scheme is !!!!

A key part of a pyramid scheme is that all late comers get stuck holding the bag when the scheme collapses. That's not how it's playing out with ff miles. If you earned enough miles in the last year, you can trade those in for flights or upgrades. Yes, you might not get the dates and flights you want, but if you look around, you can get something of considerable value.

Another key to the scheme is that money/loot from the late comers is given as payment to the early comers. In ff programs, miles are miles, whether you earned them long ago or today (indeed, in some programs they expire).

I'm not suggesting that dilution isn't a problem -- it is. Likewise, I'm not suggesting that the miles will never become worthless due to cessation of an airline's operations. It's just not a pyramid scheme.

Mileage Run?

Good point -- best to move this to MilesBuzz.

The reason I posted that here is because Mileage runners (thats me ) are caught right in the middle. Nearly 90 percent of my miles are flight miles and I have to fight for an award seat at that airline I am loyal to with all the people getting their miles from hair cuts and buying flowers for their significant others.

That reinforces my point. Redeem your miles early because the longer you wait the more diluted they get.

The airlines know, miles they sell through third party are profit because 60 % (guess) will end up never redeemed. Miles given to loyal customers and frequent fliers will almost certainly redeemed. Thats the reason they want to hit us with restrictions like delta - no crazy routing, etc.

Dilution & lack of availability is easily avoided by steering clear of the traditional redemption hotspots, ie. here in the UK I know I can fly anytime with miles in 1st to potentially great destinations like Canada, Zimbabwe & Mexico City - leave Mauritius, Cape Town & Sydney to the lemmings - is the same principle to me as when it is too hot & crowded in the city - I get out into the country.

The fact that you can redeem your miles early is precisely why it is not a pyramid scheme. In a pyramid scheme, the late comers must wait in que for those higher up the pyramid to be paid off.

That is correct and therefore pyramid schemes are illegal. Airlines modified the system so we might have to call it "modified, legal pyramid".

My point is to show that airlines restrict US (MR's) because we use weird routings to get enough miles for redemption. I don't feel guilty for that. My free ticket is paid a thousand times by people who never have enough miles to redeem.

Lets see now, no football, no baseball, no hockey (who cares about basketball or golf )
Plenty of time of time on ours hand to try and promote a pet theory (no matter how specious) ... but it does while the time away.

mike

If sitting in exit rows with middle seats blocked, upgrading often, and getting a free ticket to see my family from the miles for two trips I was going to make anyway is what it means to be a victim of a pyramid scheme, I'll be seeking out some more.

A key point is that the gazillions of miles sold through non-airline channels have very little impact on elite status levels - I'd guess the vast majority of mileage runs discussed on this board are just as much about status as redeemable miles. It's true that dilution of miles reduces their value, but that fact is nearly universally recognized and I think most people factor it into their decisions about mileage earning activities.

My opinion is that miles do not need cessation of an airlines operations to become worthless- Indeed I would argue that the majority of miles in circulation are already worthless - they will never be exchanged for airline flights, cannot be exchanged for cash, cannot be bartered for other products and will disappear into oblivion when the holder dies.

Many of us have miles here and there in different FF accounts, much similar to having several bank accounts, but you cannot consolidate your miles to spend them and little quantities of miles standing alone are of no use as they cannot be exchanged for flights or goods. Even those with large quantities of miles do not necesarily use them and there are numerous flyers on this board who have had balances in excess of 500K, some with acconut balances running in millions, for several years running.

While the airlines accept miles as currency, they make it very difficult for flyers to spend miles unless the flyer is ready to adapt his/her itinerary to whatever rules the airlines prescribe. These rules are constantly revised in a way that ensures only a minority proportion of miles will ever be redeeemed - as flyers adapt and find ways to redeeem more miles, the airlines adapt and make the rules even more restrictive so flyers can no longer use miles as easily. In this way the airlines control the amount of miles that are redeeemed, and yet can continue to dish out millions each day knowing the miles cannot and will never be redeemed. Is that not a big scam? It is like being given a cheque you cannot cash.

If miles were simply exchangeable as cash in any transactions with airlines, then the true level of the scam will be realised as the airlines will collapse because they will not be able to honor the trillions of miles they have put in circulation. They cannot redeeem the trillions of miles in circulation because they never intended to do so. So the solution is to make it as difficult or near imposiible to redeem the miles.

Last year I made 5 attempts to use miles and was only successful in one. But I am not complaining though - personally for me the benefits of an FF program are not the miles but the benefits associated with being an elite. Nevertheless, unless one has a very adaptable or flexible life, I would agree there is great similarity to the unwitting customer accumulating miles in an FF program and the investor in a pyramid scheme, both are investing in schemes where there is really no desire or strong intention (on the part of the airline or scheme) to see your investment succed.

Don't think this is the right venue for this discussion.

Well, I feel like I am near the top of the pyramid. My passion is travel. Six years ago I found Flyertalk and from what I have learned I now travel to my heart's content. Frequent flyer miles, at times augmented by mileage runs, have allowed me to fly and see an incredible number of places from Boise, Idaho to Budapest to Bangkok while earning the miles to allow my wife to fly around the world in business and first class for our vacations.

I chuckle when I see news articles every month talking about the deceptive allure of frequent flyer miles. Do I get a ticket for the dates I want every time? No, I don't. Have I never been unable to redeem my frequent flyer miles at all? No, not ever. Have I saved thousands of dollars on the cost of plane tickets? Yes, certainly. In fact, I would estimate I have spent $15,000 to $20,000 on plane tickets in the last six years while redeeming around forty business and first class international tickets with the earned miles. Somewhere in the neighborhood of $150,000 of awards from my paid travel may be a pyramid scheme, but I am not a shareholder of any airline stock so I am not complaining.

Your profile says you fly Continental. That is your problem, not frequent flyer programs in general.