At least one person is requiring an airline to do just that. A frequent flier has filed a suit against NWA claiming the company hinders the redemption of awards.

Here's the NWA thread.

It will be interesting to see how that goes. Seeing how the airline's terms of the frequent flyer programs say that they can change things whenever they want to, I don't think this guy can win. It's just plain stupid to file this suit. Sure, the rules are unfair, but hell, if they want to, they can end the program and not give you one thing, and it's within their rights.

Not that I'm suggesting they do that, of course.

I think Continental's EasyPass or NW's "RuleBuster" are examples of where things are heading. Airlines don't have reward seats but just "happen" to have ones at twice as much, effectively devaluing miles without the fuss of changing the award levels.

Taking all that money for miles earned on the ground and then delivering nothing is definitely looking like a Ponzi scheme. If abuses look severe in that area, then I don't think the fine print in the FF rules will (or should) be enough to save the airlines from some kind of government action. Hopefully it doesn't get to that point.

Maybe the Airbus A380 will work out and airlines can get some of those.

Historically, have been accumulating miles madly while only redeeming 3-4 mileage awards a year when faced with high prices due to popular /last-minute destination trips.

But the "health of airline industry" is in fact a serious issue ever since UAL pilots and mgt let UAL tailspin into financial trouble -- the majority of airline system (minus low fare carriers) is fundamentally broken and it's unclear what will happen to value of frequent flyer miles while airlines are losing money but steadily increasing the outstanding mileage float (mortgaging the future).

So although I've still taken fair number of rev.trips to earn miles, I've also been much more liberal in redeeming miles over the past 15 months (ever since the March 2001 financial meltdown of stock mkt and the economy). I've redeemed miles for 3 intl RT and 8 USA RT tkts.

We redeemed 4 FF tickets in 2001, and have redeemed 3 in 2002.

Well why not fly/charge enough on AA and reach the 2 million mark and be elite for life....

By reading this thread one could make the argument that earning "Miles" with one of the banks like MBNA would be more prudent. The bank is not likely to go bankrupt, they buy you a ticket (which earns miles), is not limited to capacity controls by the airlines and is not limited to a specific airline.

To some extent, a similar argument could be made in favour of AmEx Membership Reward points and Diner's points.

I enjoy reading The Economist, but they missed the mark by a mile on this one. In my opinion, it was an interesting, but not a very well thought out article, and was nothing but filler for a quota where the editor needed a business travel related story. There are enough differences between cash and frequent flyer miles, that on the surface they might seem similar, but in reality they are not. Most of the differences come in the redemption and spending of the different "currencies". Here are the main reasons.

1. There are people out there with so many miles that they could not possibly spend them in an entire lifetime. Cash is different because of the money multiplier principle. Without going to in depth, someone is spending the money that you are not, unless you physically have it stashed under a mattress. This isn't the case with frequent flyer miles. If you don't spend them, they are a liability for the airline, but one that goes unclaimed.

2. Cash doesn't expire. If a company "prints" so many frequent flyer miles per year, there is going to be a percentage (which I believe will be surprisingly higher than most people would expect) that are going to expire. The only way cash ever expires is through destruction or loss. If you get a hundred bucks and stick it under your mattress for 10 years without adding to it, you can pull it out and spend it. FF miles, you can't.

3. Cash doesn't have a minimum spending level. If you want to spend a penny, you can. If you want to spend a mile, or 10, or 100, you can't. You need a minimum. Even if people want to spend them, it doesn't mean that they can.

Every one of my objections are centered around spending habits, which is a factor of inflation in addition to currency volume, and around currency longevity. One of the problems I feel that the airlines are running into is the fact that although these factors will mitigate the amount of true mileage liability that the airlines have, their "productivity" is not increasing, while the usable volume of their "currency" is. This is leading to the inflation that people who want to use their miles are beginning to feel. If more and more routes and more and more seats were offered, this wouldn't exist, and the airlines can print miles to their hearts content.

Personally, I think that the airlines are limiting mileage seats because they can. I don't think it is because they are in a pickle with over demand, I think that they are creating an artificial over demand (or under supply) through the limitations they put on seats. Chances are good that the flight that you tried to use an award on flew with at least one empty seat. This is an oligopoly, not true competition. A cartel, if you will. And if there is an airline that doesn't play by the established rules, they can and will be squashed (read: Legend). I don't want to bring Southwest into this, because although it still fits in everything, it's more than I want to think about or type right now. My main problem with these limitations is that as FF account holders, we buy miles from the airlines. Basically, it is a way of buying a discount ticket, which is obtained by us giving our money to the airline before we actually receive our goods. But instead of purchasing the seat outright, the cost is worked into the cost of many flights. Sort of a Christmas Club account theory. The interest that we earn is paid in the form of a discount. As Flyertalkers, we earn a higher rate of interest (and therefore a higher discount) because we are able to reduce our cost per mile through promos and stratigic spending on our miles. Then when we go to claim an award, the bank says that they are closed and to come back next week. Or in a worst case scenario, never. Or they will say that they decided to keep a percentage of our money, which happens through devaluation by raising redemption levels. My problem with the system is that if we paid for a seat, either at a one time cash payment or through a slow buildup of payments via frequent flyer miles, we should be able to get a seat. Unfortunately, the airlines don't agree, which most of us subconsciously accept as the cost of doing business with them.

Sorry. http://www.flyertalk.com/forum/smile.gif It's 2am, I am at work, and I am bored out of my gourd. http://www.flyertalk.com/forum/smile.gif Even basic economics is more interesting than what I am doing now. http://www.flyertalk.com/forum/smile.gif

By the way, if I am not mistaken, the treasury profit is made on the printing of coins and not money, and that they about break even with bill printing. It is one reason it has been pushing for many (many) years for a $1, $2, and $5 coin. The Federal Reserve is a different story, though, and makes money hand over fist. There is an interesting situation between the Fed and the Treasury that if the Fed makes over a certain amount of profits, it pays it to the Treasury. To keep the Treasury at bay, the Fed will go out and spend the overage like water. Needless to say, the Treasury doesn't like this, which is why it is always complaining that the Fed has too much power.