FF programs are a profit center for airlines
They sell miles to third parties such as credit card companies who use them to reward the third-parties' customers. They can be sold by the airlines for more than the incremental cost when they are ultimately redeemed (plus many are never redeemed=no cost). Any asset that generates profits can be used as collateral to secure a borrowing, hence the airlines are borrowing against the future cash flow to make up for fewer people flying today.
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In response to this post by Hokie360)
Posted: 09/14/2020 at 11:20AM