As
we mentioned yesterday, Aimia shareholders approved the purchase of their Canadian division by Air Canada and we now have confirmation that the transaction is complete.
Air Canada officially owns Aeroplan once again and they give us some but not many details of what can be expected:
- Aeroplan Miles will convert 1:1 to the new Air Canada program
- Altitude Status and privileges remain unchanged for customers
- Credit card loyalty program and network agreements finalized
with TD, CIBC and Visa Canada for future participation in Air Canada's
loyalty program
- Agreement in principle entered into with American Express for
its continued participation in Air Canada's loyalty program post 2020.
The big question remains is what value will the new Air Canada program bring. Will they devalue the Aeroplan program as we know or will they keep it the same. This sooner Air Canada reveals this the better, that is if the program will remain relatively the same or better. Of course if they are going to make it worse don't expect them to announce anything until well into Q4 or even into 2020. That being said I don't think there will be major changes on the redemption side. People are worried about the redemption side but the new Air Canada program still has a huge amount of competition, primarily on the economy class front and that is where most people redeem there miles in the current Aeroplan program. You have AIR MILES, RBC Avion, CIBC Aventura, BMO Rewards, Amex Membership Rewards, More Rewards, and the list goes on for companies and programs that compete for the biggest chunk of the pie of collectors. If the Air Canada program devalued economy class redemptions they would stand to lose out to all those proprietary credit card programs, coalition programs and even WestJet Rewards. Where Air Canada will probably look to recoup some of the money they are spending will be on premium redemptions like business and first class flights. They have less competition here albeit WestJet is up and coming in that department. If any devaluations were to happen I would guess it would be on these premium redemption options but even if that happens it can't be major or even happen for the first couple of years. Air Canada doesn't want to anger their elite members who are their biggest revenue generators. AC already angered them with the announcement of the new program, hence AC reaching out to 30,000 members and learning the following:
"Air Canada has undertaken extensive consultations with more than
30,000 customers to identify key program attributes. Customers expressed
their strong preference to use their Aeroplan Miles in the new Air
Canada loyalty program"
They realized they needed to buy Aeroplan to appease those high end customers. These members have huge Aeroplan balances and they were not happy they would have to start from zero in the new program and have a lot miles in a program that potentially wouldn't let them redeem for the flights they wanted. So why would Air Canada anger them all over again by jumping into a big devaluation on the redemption side.
They do say in their press release that they will still have the best reward value for Air Canada flights, but they don't say for what fare class and in reality most of its competitors that do offer access to Air Canada will primarily only do so for economy class. Let's see if that will be the case!
With all this being said I predict the biggest change in the new program will be Air Canada going to true revenue based earning when flying on paid tickets. That is, you earn a certain amount of miles per dollar spent on a ticket just like we have seen from United, American, Delta, and countless other programs - even WestJet is revenue based. Base members will earn something like 5 miles per dollar spent and the various elite members earning 7 to 11 miles per dollar. This is where the main devaluation can happen in the program.
For more details and continued updates we recommend reading and bookmarking Air Canada's dedicated site for the new loyalty program.
For more details and a complete timeline on the story visit "
- All the resources you need"
