In the depths of the financial crisis, airlines got liquidity from their co-brand issuing banks by taking loans — in the hundreds of millions of dollars — backed by frequent flyer miles. These amounted to pre-purchase of miles at a deep discount. (Along with the drop in fuel prices, American Airlines only recently finished prepaying the billion dollars they got from Citibank.)
It wasn’t surprising, with low miles costs, to see big signup offers. The first 100,000 mile offer I recall was for the British Airways Visa in 2009. In 2010 we saw a 100,000 mile offer for the basic co-brand AAdvantage card. In 2011 Capital One ‘trumped’ with a 110,000 point offer.
Renegotiated deals have gotten much more expensive for banks. United, Southwest, Delta, and American have all gotten new credit card agreements since that era (and American is negotiating again).
Meanwhile banks have gotten savvier. Expensive signup bonuses are tough to recoup except from the very best customers a bank acquires. So when we see a 100,000 point offer it’s often at least intended to be targeted.
Much more common now are 50,000 point offers — and sometimes those are even the ‘surge’ level, with the major airlines often settling back in at 25,000 or 30,000 points for their ‘standard’ offer.
Naturally, there are offers which are much worse.
In 2014, Japan Airlines offered referral bonuses if you’d get your friends to sign up for their MasterCard. They sent you a towel.
The JAL MasterCard from First Bankcard also offered a signup bonus of a stuffed animal. At least it was really cute.
Nonetheless, I think that this signup bonus is… ridiculous.