Last week another pre-approved credit card application form arrived in the mail, from American Express. It was called Blue Sky. In the business world, blue sky is a term used for potential, goodwill and hot air. This card was aptly named. No annual card fee! Use Blue Sky points to fly 365 days a year! Fly for 50 per cent fewer points! A few days later I received an email from Qantas headed "1000 extra points with hotels on qantas.com".

Who do they think they are kidding? Banks, credit card companies, airlines and retailers are generating millions of frequent flyer miles as incentives but they are doing so in the full knowledge they are making promises that cannot be kept. Too many miles are chasing too few available seats and everyone knows it. The whole system is built on the knowledge that a large proportion of those miles, at least 20 per cent, will never be redeemed.

The entire frequent flyer edifice, now worth billions to the airlines, is part incentive and part con job. Let us begin with an example which is both common and about which I can speak with complete authority. I am a Qantas frequent flyer. I have Silver status. I belong to the Qantas Club. I have enough miles accumulated to fly anywhere Qantas flies. In theory.