Airlines make more money from mileage programs than from flying planes
> Paying for a flight or a hotel room with points may feel like a free bonus, but because credit-card-swipe fees increase prices across the economy—Visa or Mastercard takes a cut of every sale—redeeming points is more like getting a little kickback.<p>And the ones that give a cash kickback (1.5% or occasionally more with a few specific cards) are even easier and more straightforward about this.<p>Suppose someone wanted to reverse this trend and just make everything cheaper rather than having interchange fees of which the cardholder gets a fraction back? What incentive structure would move towards a model with goods whose prices don't need to buffer the 3+% haircut of credit card fees?