Air Canada Dumps Aeroplan: Let’s Not Celebrate Yet

Effective June 30, 2020, Aeroplan will no longer be the loyalty program for Air Canada.

Negotiations between Aeroplan’s parent company Aimia and Air Canada have stalled, prompting Air Canada’s decision to go it alone. As Air Canada’s financial situation has dramatically improved, it comes as no surprise that it prefers to run its own lucrative loyalty program.

Air Canada’s Timeline

In a press release this morning, Air Canada has laid out the following timeline for change–

• Before the new Air Canada program launches in June 2020, members will be able to earn and redeem Aeroplan Miles for Aeroplan Rewards, including flights with Air Canada and our Star Alliance partners in accordance with the Aeroplan program.
• After June 2020, miles earned from Air Canada and Star Alliance flights will be credited to the new program, with customers able to redeem those miles for rewards including Air Canada and Star Alliance partner flights.
• Aeroplan miles earned up to June 2020 will stay in Aeroplan members’ accounts, and will continue to be subject to the conditions of their program.
• Air Canada intends to continue to offer Aimia redemption seats for Aeroplan members after June 2020, with pricing competitive with other third-party rewards programs.

What Does this Mean For Your Aeroplan Miles?

Let me start with this assurance: take a deep breath, major changes are three years away. There is no need to call Aeroplan today to liquidate your remaining points.

But there are many questions surrounding the future of your Aeroplan miles. Air Canada has made clear that your Aeroplan miles will not transfer to Air Canada’s new loyalty program. It has also stated that Aeroplan flight redemptions will still be possible in 2020 with pricing “competitive with other third-party rewards programs”. That’s code for “at a horrible rate”. Thus, I’d make the following assumptions about the next three years of the Aeroplan program—

• Most importantly, your Aeroplan miles should be burned by 2020
• Aeroplan will devalue once more before 2020, with notice
• Fuel surcharges will remain
• American Express transfers will remain

In other words, I am predicting business as usual for the next three years with Aeroplan. You can start planning for that now, but you have a lot of time to take advantage.

Aeroplan Warns: This is Bad News for Consumers

Aima believes this news is bad for consumers–

Aimia strongly believes that a renewal of the company’s long-term partnership would be the best and least disruptive option for both companies’ customers, in particular Air Canada’s frequent flyers. While Aimia remains open to further discussions with Air Canada, the company’s strategic planning had already contemplated other post-2020 alternatives in parallel with the goal of ensuring that Aeroplan members retain access to a strong redemption offering around air rewards in the future.

Aimia may be right, but also may be totally wrong. I’ve written repeatedly about my annoyances with Aeroplan. It is far too premature to make speculations about what is best for customers.

Air Canada’s Golden Oppounirty

In designing a new loyalty program from the ground up, Air Canada has a chance to build something truly unique and compelling. Imagine a program so rewarding that United flyers credit to Air Canada instead of MileagePlus.

I want to be optimistic, particularly because Air Canada has some great people working on this new program, but I will remain cautious.

For all its flaws, Aeroplan still represents a great value proposition, particularly on premium tickets between the USA and Europe. I consider it inevitable that the new program will have rates more in-line with its North American competition, i.e. significantly higher prices for premium cabin redemptions.

Fuel surcharges may or may not go — I am less concerned about that than I am about strict routing rules and stopovers. Another advantage Aeroplan now offers members is the ability for two stopovers on a round-trip award. Delta and American offer none while United offers an “excursionist perk” that represents a more limited stopover opportunity.

I offer the following advice to Air Canada: please don’t create a program even worse than Aeroplan. Upgrades will be a nice addition to the program, something Aeroplan does not do now, but that is not enough if you are going to offer uncompetitive fixed-rate or dynamic award pricing. We don’t need to use our miles for toasters and iPhones — we’d just use cash back cards if we wanted that. Instead,we want valuable redemptions that make sense for both parties.

CONCLUSION

I’m sure I’ll be writing a lot more about this in the weeks, months, and years to come. While I would love nothing more than a truly valuable loyalty program, I cannot think of a “new” program that has pulled that off well in recent years. Let’s hope for the best, prepare for the worst, and start submitting feedback to Air Canada already on the new program.