So that’s why they do it

I didn’t realise that frequent flyer programs could be a good little earner:

WHEN Qantas announced profit results last month, it revealed it had earned $328 million, before tax, from its frequent-flyer program.

How so?:

Reichlin says frequent-flyer programs are hugely profitable for airlines due to a combination of "enormous demand" and having control over supply.

"They get cash for the points [from banks] and then they control the supply of seats," he says.

Oh, I see.