Details of the new Aeroplan program are now out. Air Canada sold its Aeroplan frequent flyer program in 2005 when it was desperately short of cash. Having a separate company manage the loyalty program was challenging for customer loyalty, and made it harder to grow and succeed. And since airline frequent flyer programs have become highly profitable during normal times, the airline was missing out on profits selling its miles to banks, too.
So Air Canada bought it back and vowed to introduce a new, rejuvenate program. They’ve announced the details of the program that will launch November 8th. I’ve had a chance to dive into the minutiae and speak with executives. Here’s your complete guide for what to expect. You’ll find more detail here than you will on Air Canada’s micro site explaining change.
Air Canada’s New Aeroplan Program: Top Level
After buying back Aeroplan we’ve seen almost universally positive moves from Air Canada’s loyalty program. They’ve introduced mileage sales (selling a valuable currency cheap), they’ve been very aggressive with promotions while customers aren’t traveling, they’ve relaxed mileage expiration rules and brought on new partners like Etihad and Azul.
Now we have a comprehensive view of the new program. And the new name is… Aeroplan. This was leaked to me well over a year ago. Air Canada realized it would cost them nine figures to rebrand, and they already had one of the most recognizable brands in Canada. Why change the name? While they were working on this they got to watch Marriott do “Bonvoy.”
At a top level,
- Fuel surcharges are going away for redemptions, period. Award prices are going up, though in most cases modestly. Awards that would have had fuel surcharges before are a much better deal in the new program.
- They’re keeping award charts, and introducing cash and points redemptions that let you buy miles for as little as 1.12 U.S. cents apiece.
- New points-pooling, combing points from up to 8 different accounts for free to redeem awards.
- They’re also introducing an elite benefit to gift 50,000 mile elite status for a day to friends and family, so that loved ones of top customers get treated just as well as the elite member. This strikes me as really huge (and analogous to Hyatt’s ‘Guest of Honor’ award program which I love, conferring elite status when redeeming points for someone else).
- Mileage-earning for flights will become revenue-based in 2021, which lets basic economy fares earn miles, but basic fares will no longer earn elite qualifying miles.
- Elite members can earn up to 11 vouchers to redeem miles at 50% off each year. Super Elites will no longer get ‘last seat availability’ in coach at saver prices, but they do get half off whatever prices are offered several times a year.
These are just a few of the new things in the program, so read on.
What Air Canada Hopes To Accomplish With A New Program
Why is a Canadian frequent flyer program relevant to most Americans?
- Air Canada is a Star Alliance member. You can use their miles to travel on United, Lufthansa, and all of airlines in Star Alliance – plus other partners like Etihad.
- Air Canada serves more U.S. cities than any other foreign airline, and gives most Americans one-stop access to myriad destinations across Europe and Asia. In other words for many it’s just as convenient to fly Air Canada internationally as it is to fly American, Delta, or United.
- They’re an American Express and Capital One transfer partner, and they’re launching a new U.S. credit card.
However Air Canada Aeroplan competes primarily in the Canadian market, where there aren’t as many competing miles programs. I was disappointed when Air Canada bought back Aeroplan instead of launching their own program to compete with Aeroplan. I thought more competitors would be better for consumers, but I’m still pleased with what they’ve come up with.
Program executives describe the vision of the airline as selling the aspiration of travel, while the loyalty program sells the certainty of the aspiration, that you should always be able to count on Aeroplan to travel more and travel better. Towards that end they’re active creating opportunities to earn miles faster, and offering real value in redemption.
While the loyalty program is profitable on its own, they know that the profit is driven by the experiences of members. To keep their credit card top of wallet, they need to offer value, and doing that will create word of mouth that will sell the product through their customers’ networks. That emotional experience extends through traveling better (upgrades and aspirational awards) and it extends not just to the member but to the people the member cares most about.
Several of the top executives of the program take mileage runs themselves. One used to be the primary contact with FlyerTalk frequent flyers for Continental Airlines. They view themselves getting to design a new frequent flyer program as ‘inmates running the asylum’ they have to deliver a profitable program but believe the way to do that is driving value to members.
Air Canada has a new reservation system (Amadeus), they’re using a new CRM for member accounts, and they’ve got a single website and mobile app – no more dealing with Air Canada for travel and Aeroplan for miles, hoping it all works. (The Aeroplan app and website will cease to exist and everything will be housed together.)
Flight Redemption In The New Aeroplan Program
Aeroplan is keeping award charts. They’re trying to be even more transparent with members with searching, they’ll pretty clearly warn you when they’re offering you a ‘mixed cabin’ itinerary which is a bugaboo with several programs that tell you there’s availability in business class, at a business class price, when only a short domestic segment is available that way with the long haul international trip in coach.
The new award chart (.pdf) splits the world into four regions:
- North America
- South America
- Europe, Middle East and Africa
Within each region pricing is distance-based.
For travel on Air Canada itself pricing will be dynamic. There’s a saver price, take Toronto – Los Angeles in economy at 12,500 miles (per the award chart) but pricing might go up to 17,500 miles. And the 40% premium (an extra 5000 miles to get to 17,500 miles) makes most inventory available for redemption.
Elite members and co-brand credit card customers will get better pricing – not just more access to saver awards, but more inventory all along the way. So even if a saver award isn’t available, they’re more likely to get a lower price than other members. An elite member with the credit card gets access to even more inventory still.
Although fuel surcharges (or ‘carrier-imposed surcharges’, the fees coded as YQ or YR) are entirely eliminated there’s a new CAD$39 partner booking fee per passenger and overall I’m told that award pricing has gone up 12.7%. For awards with that losing surcharges you might think of this as a net reduction of one-third though.
- At the most dramatic the shortest Europe trips go up 55,000 to 60,000 miles but could save $500 one-way on surcharges.
- But you do pay more for longer trips, and for trips with stopovers, even on awards like transatlantic Swiss, United, or Turkish that didn’t have fuel surcharges to begin with.
They’ll still offer ‘market fares’ which base the price of an award on the cost of a ticket, and there you’ll get 1.3 to 5 Canadian cents apiece in value.
Air Canada was early to the game of ‘branded fares,’ different bundles of services and fee options at different price points. This exists for awards as well. In one huge gain, business class ‘flex’ and ‘latitude’ fares include Signature Suite lounge access. Awards and upgrades didn’t used to let customers use Air Canada’s Signature Suite lounges at all and these are the best business class lounges in North America.
Generally a 10,000 to 12,000 point premium gets a business flex award and that comes not just with Signature Suite but also a $0 redeposit/change fee as well. Here’s detail on the original Signature Suite in Toronto and the one in Vancouver.
Air Canada Signature Suite Toronto
Other features of flight redemptions:
- Flexible pricing of Air Canada segments on partner awards. If you’re booking a partner award that includes an Air Canada segment, and the Air Canada flight you want isn’t available as a saver award, that won’t require pricing the whole itinerary more expensively. Instead booking a more expensive Air Canada segment increases the price of the award proportional to distance of that segment.
- Construct any routing you wish. Aeroplan is eliminating ‘Maximum Permitted Mileage’ (MPM) rules, and will let you transit any region you want when flying between two points. It just may cost you more miles to construct your preferred award, like connecting in South America on the way to Australia or Africa. Eventually this will all price correctly online, but for the first day of the program Aeroplan agents will have a special tool to price non-standard routings like Asia to the U.S. via Australia.
- Stopovers cost 5000 miles each. One stopover is permitted on each one way award. So a roundtrip can have two stopovers, and a multi-city itinerary gets more. Each stopover costs 5000 miles. There are no stopovers permitted on intra-North America awards, though that’s something they might consider in the future. Since awards price as one ways, you can have an open jaw or even a double open jaw without restriction.
- New cash and points awards. All awards can be priced as ‘points plus cash’ letting you buy up to 40% of the points required for an award. There will be four options every time you redeem, including spending extra points to cover taxes and fees. And the cash cost will be reasonable at 1.5 to 2 cents a point Canadian (1.5 Canadian is currently ~ 1.12 US cents, a great deal for buying miles). You don’t get to use this as a back door way to buy miles on the cheap, cancelled awards refund the miles and the cash.
- No phantom availability. With Amadeus they’ll have very high accuracy inventory. The only time you should error out in the booking process is if someone literally purchased the space you wanted while you were checking out. This accuracy may add 1 to 2 seconds to the average search time.
- Change fees will vary based on the fare type purchased and when you’re making the change. Changes are permitted up to two hours prior to departure.
Elite Status In The New Aeroplan Program
Key elements of Aeroplan’s elite (Altitude) status will stay the same. They will continue offering lounge access at the 35,000 mile level for instance. However five major things will be changing:
- Earning Super Elite on segments gets a little harder requiring 100 segments instead of 95
- Status ends December 31 each year, with a ~ 10 day grace period for credits to post to your account to avoid downgrading anyone in error. The status year won’t end January 31 or February 28 like many other programs. (They’re like Alaska Airlines in this regard.)
- The biggest change is the introduction of Priority Rewards which are 50% discounts on redemption prices for one passenger. Members can earn up to 11 of these per year. Each Priority Reward can be used on a single itinerary, so one-way, roundtrip, or multi-city.
Priority vouchers are earned based on status-qualifying dollars, at the 4000; 7000; 10,000; 15,000 thresholds and then at each 5000 increment up to 50,000 qualifying dollars. What those vouchers can be used for depends on the member’s status at the time they cross the earning threshold:
- Status pass will launch in March 2021 a day pass giving someone 50,000 mile elite status for a day, and this applies to everyone on the same reservation for their full journey. All 50,000 mile elite tier members get one this year, and can select more as part of their choice benefits.
- Elite status for people who earn with non-flight activity Earning 100,000 points in the program in a year (excluding points purchases, transfers, and signup bonuses – although there may be exceptions on a promotional basis) will earn the first-tier 25,000 mile elite status.
With the introduction of Priority Rewards, Super Elite members lose last seat availability in economy at a set price but most should come out ahead. Travel option vouchers go away, but representatives say they’re looking at ways of delivering a better inflight experience for top elites. Otherwise the relaunch of the program won’t take away other benefits, and there are no changes to the lifetime elite program.
New Family Pooling Option
Aeroplan will allow up to 8 people to share their miles at no cost. What’s more everyone in the family pool will benefit from access to better availability at lower award prices if anyone in the unit is an elite or Air Canada credit card customer (or both).
Like the British Airways family pooling program, when you redeem miles for an award those are taken proportionately from each account (based on each person’s balance). The upside to this is that a single award redemption resets mileage expiration for all members of the pool.
Unlike British Airways, though, Air Canada won’t limit redemptions to members in the pool. You can join family pooling and still redeem your miles for anyone you wish.
To limit abuse once you join a family pool you have to stay in it for at least three months. And when you leave you cannot join another one for six months.
Co-Brand Credit Cards
A new suite of Air Canada Aeroplan credit cards will launch in Canada November 8. There will be a U.S. card coming, but there are no details available for that product yet.
- Base card: earns 1000 elite status miles and 1 flight segment per $10,000 spend; first checked bag free; access to better redemption inventory; CAD$139 annual fee. There will be another benefit as well that hasn’t been announced yet.
- Small business card: earns 1000 elite status miles and 1 flight segment per $5,000 spend; first checked bag free; access to better redemption inventory; 1 lounge pass per $10,000 spend each year (up to 4 annually). There will be another benefit as well that hasn’t been announced yet.
- Premium card: Access to Air Canada Maple Leaf Lounges, Maple Leaf Cafes, and Priority Pass – for the cardholder and 1 guest; priority airport services; rollover elite qualifying miles + eupgrades; 1000 elite status miles and 1 flight segment per $5,000 spend; $99 companion ticket at $25,000 spend (use worldwide for a higher co-pay); upgrade priority (the first tie-breaker after elite status, above branded fare and fare class); CAD$599 annual fee. There will be another benefit as well that hasn’t been announced yet.
There will also be a new card coming that’s not yet been announced.
A unique feature of Aeroplan cards is that travel benefits are shared with travel companions on same reservation and with authorized users. So anyone with an authorized user card is entitled to a first checked bag free, for instance.
Aeroplan will go revenue-based for flight earning sometime in 2021. Now, Aeroplan isn’t doing ‘1 mile per mile flown’ on all fares to begin with so revenue-based earn isn’t inherently a loss. However base-earning in the program is low. Non-elite members earn 2 miles per dollar on basic fares and 3 miles per dollar on all other fares.
- 25,000 and 35,000 mile elites earn an extra 1 mile per dollar
- 50,000 mile elites earn an extra 2 miles per dollar
- 75,000 mile elites earn an extra 3 miles per dollar
- Super Elites earn an extra 4 miles per dollar
While U.S. programs generally award non-elites 5 miles per dollar, you have to be a 50,000 mile elite to earn that. Air Canada’s top elites earn 7 miles per dollar on most fares, uncompetitive against U.S. earning where a top elite might earn 11 miles per dollar. You have to judge this against the value of miles earned, but I take this as meaning the program becomes more credit card-earn centric, benefits focused, and is weak earning for actual flights.
Air Canada would point out that earning is based on Canadian dollar spend, and a US dollar is worth 1 1/3 Canadian dollars currently, though that’s down ~ 7% from its March peak. Still, it’s less earning than comparable US programs.
Moreover while they will offer mileage-earning on basic fares, they’re removing elite status credit earning from basic economy fares which is disappointing.
Copyright: ronniechua / 123RF Stock Photo
Aeroplan has recently introduced bidding for upgrades. You’ll be able to do this with miles, too. In the fourth quarter they’ll introduce redeeming miles for inflight wifi, and eventually for seat assignment fees; lounge access; baggage fees: buy on board items; and eventually spending miles with retail partners. On the whole these are likely to offer less value than travel awards.
They also envision experience and benefits-based partnerships with retail brands alongside redemption opportunities – the Aeroplan marketing database is valuable across Canada and with global travel brands.
Right now you can use Aeroplan miles for hotel and car reservations however you cannot book past October 31. I’m told that they want to drain down bookings in their current system, and that the new Aeroplan system will allow these awards again starting November 8. In the meantime it’s possible to redeem miles for gift cards with travel partners if you want to use your miles this way now for travel November and beyond.
Verdict On The New Aeroplan Program
This is a really thoughtful program, attractive for both casual users transferring points – because of the flexibility of redemptions and elimination of fuel surcharges – and for their most loyal customers. I especially love top elites conferring ‘status for a day’ on friends and colleagues, and earning 50% discounts on award redemption up to 11 times a year.
There are tradeoffs involved in any new program. Partner awards that didn’t used to have fuel surcharges become more expensive. Super Elites don’t have discounted last seat awards, so a Super Elite who might use this benefit spending millions of miles a year sees a cut. And basic economy fares no longer earn elite qualifying miles.
But the credit cards are great, redemptions remain good and useful, I don’t mind that I’ve still got big Aeroplan points balance myself under the new program and that’s a true test I think. I look forward to redeeming those miles at a slight premium for Air Canada business class and using their Signature Suite in Toronto or Vancouver. The thoughtfulness and activity around the new program are almost enough to make me wish I lived in Canada and could use Aeroplan as my primary program.
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