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  • Writer's pictureC.G. Perry

Loyalty Programs: Minting Miles into Untaxed Wealth

Updated: May 10

A view from the departures terminal of a passenger jet taking off and coins being minted in the process.

It was about time to dust off my passport and resume my travels. I had hunkered down long enough to wait out what I felt was the worst of the pandemic. Trained in the dark arts of mitigating weapons of mass destruction, I was fairly confident I could traverse the world with minimal risk of being infected by the COVID-19 virus.

When considered, the misinformation, disinformation, poor legislature and opportunistic politics in play, humanity’s response to the virus was exponentially more harmful than the pathogen itself. Aside from my previously mentioned diagnosis, I had developed a case of severe cabin fever. I needed to go far and for a good cause. Several weeks later, I was reacclimating myself with a plethora of travel options available to consumers. It had been some time since I last traveled by air and I needed to inventory my loyalty points and program memberships.

After a few hours of password resets and security question overhauls, I was able to start negotiating my air travel in a manner conducive to me. It was not long before I realized I was ensnared in a racket.

Not the beginning but, starting here

“For years, loyalty programs flourished, thanks to a conventional wisdom that everyone should carry a rewards card. The programs grew at a cancerous rate, fed by an unskeptical mainstream media and a small army of bloggers [except this blogger] who were generously compensated for endorsing the loyalty lifestyle. They hawked a handful of bank-issued affinity credit cards with excessive point-bonus awards for which they received a generous commission check whenever a reader signed up.”

- Christopher Elliott, Chief Advocacy Officer,, Are loyalty programs worth belonging to?

Gone are the days a business traveler felt thrifty knowing that a work trip will go towards holiday travel later in the year. In their current state, airline loyalty programs do not incentivize mile and point redemption nearly as much as they do access to lounges or other discounts and rebates. Over recent years airline miles have become a form of currency, loyalty programs have become exchange platforms, member accounts have become wallets, loyalty program partners have become affiliate network vendors and airlines, alone, can regulate the value of miles and points freely. Airline loyalty programs have allowed airlines to mimic banks.

Thirty Trillion Miles and Counting

“We estimate that more than 30 trillion frequent-flier miles are currently sitting unspent in accounts. That was enough to let almost every airline passenger in the world redeem miles for a free one-way flight in 2017—if miles could be redeemed for trips without restrictions.”

- Steve Saxon and Thorsten Spickenreuther, McKinsey and Company, Miles ahead: How to improve airline customer-loyalty programs

Thirty trillion of anything must amount to "something", right? If not, why would airline companies subject themselves to logging, cataloging, processing, analyzing and storing the data and metadata required to track thirty trillion miles?

“Miles” are not considered a taxable asset; however, an asset nevertheless. The price you pay for airfare is, and should be, solely for the cost of traveling through the air. Were we made aware that signing up for a loyalty program meant that you would be consenting to an airline company minting fictitious currency? Currency which said company can then use to monetize and extract profits from affiliate partners such as Hertz and Hilton?

Were the Terms and Conditions published in such a manner that you clearly understood that the entire travel industry (resorts, rentals and more) would hinge desperately on the airline industry whether planes were in the sky or not?

With a “side hustle” earning nearly triple of what airlines report, it should be no surprise that millions of Americans disapproved the 2020 Bailout of Airline debt by the United States government. This untaxed and unlisted bounty of intangible wealth has also given airline companies influence over financial institutions such as Citibank, American Express, and Chase bank to create partner cards. These partner cards offer consumers miles and/or points for purchases made on credit. For a full-detailed breakdown on this racket, listen to How Airlines Make Billions From Monetizing Frequent Flyer Programs by JT Genter on and watch How Airlines Quietly Became Banks by Wendover Productions.

A Personal Question of Ethics

Even if someone with a keyboard and internet access felt compelled enough to write an article on how devious the concept of airline miles was to the world's real economy, would this influence you, the consumer, to opt out of them. Full disclosure: I shamelessly admit to having a Turkish Airlines Smiles and Miles account, an Allcor membership and many other accounts but, I often question whether or not I am the true beneficiary of such apparatuses. I have used the internet long enough to know that if access or use is free then, I am (or my data) is the product. Does my personal, conditional short-sighted gain merit the demise of institutional finance?

About the Author

Chris Perry writes and manages The Grey Point View since its inception in 2021. is an independent blog on ethics, politics, Euro-life and more. Written by expats, global citizens and other interesting sapiens. If you are interested in writing with us, send us your post for review. We look forward to hearing from you.

The views and opinions expressed in this blog are those of the authors and do not necessarily reflect this site's official policy or position. To learn more about our policies visit

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