My first instinct, here, is to assume that these airlines simply overvalued the assets they were using as collateral. The incentives point towards getting the highest valuation you can get away with. Point Loyalty supporting these estimates could be used as an argument against that, but I would consider the fact that airlines would be much less inclined to use their consultancy services if they publicly came out against the estimates that were so useful to their clients.
I think the best sanity check would be to compare the share of flights purchased with loyalty points to the share of flights purchased through other means. If most flights are paid via card rewards, then the high valuation tracks—credit card customers are indirectly paying for most of their flights in a different way. If most flights are not paid for this way, then something’s up with the reward program valuations. In either case, though, the company is ultimately selling flights—they’re just offering an alternative payment scheme for some of the flights.
My first instinct, here, is to assume that these airlines simply overvalued the assets they were using as collateral. The incentives point towards getting the highest valuation you can get away with. Point Loyalty supporting these estimates could be used as an argument against that, but I would consider the fact that airlines would be much less inclined to use their consultancy services if they publicly came out against the estimates that were so useful to their clients.
I think the best sanity check would be to compare the share of flights purchased with loyalty points to the share of flights purchased through other means. If most flights are paid via card rewards, then the high valuation tracks—credit card customers are indirectly paying for most of their flights in a different way. If most flights are not paid for this way, then something’s up with the reward program valuations. In either case, though, the company is ultimately selling flights—they’re just offering an alternative payment scheme for some of the flights.