Back in 2008 and 2009 banks were buying miles super cheap. Now with airlines in a stronger position financially, with fewer airlines to do deals with and banks in a healthier position to compete for those deals, the price of miles has swung up closer to two cents than one.
Meanwhile airlines haven’t needed to spend as much on marketing to fill planes. They’ve been able to devalue their frequent flyer programs. Miles are costing the banks more. Those miles are worth less. Frequent flyer programs may find themselves killing their multibillion dollar goose in the medium-term, though it’s likely on a long-term decline no matter what they do.