The value of American Airlines’ Aadvantage loyalty programme and United’s SkyMiles scheme actually exceeds the value of the airlines’ core operations — the actual business of flying passengers back and forth — according to an analysis by Baltimore, Maryland based industry analyst Joseph DeNardi of Stifel Financial Corp.

Airline credit cards, in particular, are a huge source of income for airlines, according to a report by Bloomberg. Revenue generated from selling miles to credit-card companies and from fees on loyalty-based credit cards may match or even exceed operational revenues: airlines net 1.5 to 2.5 cents per mile sold, and credit-card companies buy billions of miles to distribute to cardholders.

“Airlines are earning upwards of 50 per cent of [income] from selling miles to a credit card company, which we believe is a great business to be in,” according to DeNardi.

Alaska Airlines has begun to tie a portion of its employee performance pay to sales of loyalty-based credit cards, and onboard solicitations for miles-based cards have become common to travellers. Delta Air Lines estimates that its partnership with American Express will net $4 billion in annual revenue by 2021.

There is a cost associated with redemption of miles for flights or goods, DeNardi notes, but he estimates that the sale price of an airline mile is three times its worth at redemption.

“Fundamentally, airlines are selling miles to credit card companies for much more than they will cost the airline when those miles are redeemed—and they are doing it hundreds of billions of times a year,” he wrote.