How Airline Miles Turned Into a Multibillion Dollar Currency

Published: Saturday, July 26, 2025 at 10:00 am

Airline Miles: A Multibillion-Dollar Currency

The airline industry's frequent flyer programs, born from the deregulation of the late 1970s, have evolved into a powerful, multibillion-dollar currency. The Airline Deregulation Act of 1978, championed by figures like Senator Ted Kennedy, ended government control over airfares, sparking competition among airlines. This led to the creation of loyalty programs, with frequent flyer miles as a key tool to attract and retain customers.

These miles, initially earned through flights, have expanded to encompass a wide range of activities, from credit card spending to shopping and even hair loss consultations. Airlines sell these miles to third parties, such as banks, generating significant revenue. This has created a closed ecosystem where miles can be redeemed for flights, upgrades, and other rewards, effectively becoming a private currency.

However, this system is not without its challenges. Airlines can devalue miles, change program rules, and are largely shielded from consumer lawsuits. Senator Dick Durbin is currently attempting to regulate credit card swipe fees, which could impact the value of these rewards.

BNN's Perspective: While the rise of airline miles has undeniably benefited consumers by making travel more accessible, the lack of transparency and potential for devaluation raise concerns. A balance must be struck between consumer benefits and the financial viability of these programs.

Keywords: Airline Miles, Deregulation, Frequent Flyer Programs, Credit Card Rewards, Airline Industry, Consumer Benefits, Travel, Loyalty Programs, Senator Durbin, Credit Card Swipe Fees.

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