What Air Canada Should Do to Make Aeroplan Members Happy
Things have been relatively quiet since Air Canada (along with TD, CIBC, and Visa) bought Aeroplan. The formal takeover won’t occur until July 2020, and Aeroplan members are feeling uncertain about the future of their points. A recent study from the Angus Reid Institute revealed that 6 out of 10 Aeroplan members are concerned that their points will be devalued. Despite this uncertainty, 75% of those surveyed say that they will not change their plans when it comes to the points they’ve already accumulated, which may give Air Canada little motivation to address some of Aeroplan’s weaknesses.
But if Air Canada wants to expand its market share of Canada’s travellers, and lure us away from programs like Air Miles and WestJet, it should up the ante. We hope that Air Canada will surprise us by seizing the opportunity and upgrading weak aspects of the program, and we’re accordingly giving them some suggestions as to how they might do that.
Be Clear About What Will Happen to Aeroplan Points
Although it’s business as usual right now when it comes to earning and redeeming Aeroplan points, many members are rightfully worried about what will happen to the value of their points. Air Canada could address these fears by letting consumers know, as soon as possible, what value changes (if any) are in store.
It would not be a surprise if Air Canada’s first announcement is the reduction in the number of points required for one of their current routes. In essence, this would be an increase in the value of your points. This would of course be welcome news, but remember, there’s no such thing as a free lunch: they would in turn devalue the points for other routes, i.e. require more points for redemption.
Address the New Partners That Were Already Announced
Before Air Canada and their partners made a deal to purchase Aeroplan, Aimia (the current owners of Aeroplan) signed Porter Airlines, Flair Airlines, and Air Transat as Aeroplan partners come 2020. Although these new partners don’t have the reach of Air Canada, they still presented consumers with more options to redeem their points.
In an ideal world, Porter Airlines, Flair Airlines, and Air Transat would remain Aeroplan partners, but it’s highly unlikely Air Canada will keep them on since they’re competition. Technically speaking, those new partner airline agreements don’t come into place until July 2020 and there’s probably an exit clause built in if Aeroplan was sold. Additional Airlines added to Aeroplan would have been great, but once the dust has settled consumers will likely only be able to use their Aeroplan points on Air Canada and Star Alliance members.
So were these new partnerships all for naught? Air Canada should make a formal announcement about this and end our speculation.
Make the Aeroplan Program Easier to Understand
Air Canada’s loyalty programs are a bit overly complicated. Your Aeroplan points allow you to redeem free flights, but there’s also the Altitude program which gives you status based on Altitude Qualifying Miles (AQM), Altitude Qualifying Segments (AQS), and Altitude Qualifying Dollars (AQD). Confused yet? You’re not alone.
Since Air Canada will now own Aeroplan and Altitude, it’s likely there will be some sort of merger between the two programs so things are more streamlined, and we think this is likely. This should be a win for consumers since they won’t need to navigate the various programs to find out what they’re entitled to.
Lower the Taxes Charged When Making Redemptions
Air Canada charges fees/taxes when consumers redeem their points. This is pretty standard in the industry to some degree, but Air Canada has some of the highest fees out there. There have been many reports in which consumers have found flights to Europe for cheaper cash prices than what they pay in Aeroplan fees alone (after redeeming their Aeroplan points). This is ridiculously frustrating for people who likely spent years collecting those points. If you’re unfamiliar with this scenario, booking a return flight to Paris from Canada on Aeroplan would cost you 60,000 Aeroplan points and you could be charged $700 in fees/taxes. If you just paid cash for your flight, there’s a good chance you could find a flight to Europe for about the same amount or less than what you’re paying in fees/taxes, so why would you use your points at all?
This is a huge issue for Aeroplan that needs to be addressed. Air Canada would delight existing Aeroplan members, and probably attract new members, if they were to lower these fees. But our (somewhat cynical) crystal ball tells us this is highly unlikely, as these fees are a way to offset costs from a “free” flight.
Make More Seats Available
Another major complaint with Aeroplan is that there are a limited number of seats available for award redemptions. If you’re trying to use points to book a popular route, like Toronto to Orlando, you might have limited flight options or be forced to take a stopover.
Air Canada could address this by making all empty seats available for redemption. This would also allow them to eliminate Aeroplan market fares—when members get access to more seats but pay a premium number of points for the privilege—and only have fixed mileage flight rewards. Of course, it’s highly unlikely they’ll open up every seat, but there’s a good chance that they’ll at least make more seats available.
It should be noted that before Air Canada purchased Aeroplan, Aimia announced that come July 2020, you’ll be able to redeem any seat on any airline, anywhere, and at any time, which puts quite a bit of pressure on Air Canada to live up to that offer.
Improve Their Credit Cards
TD Bank, CIBC, and Visa Canada were the parties that joined Air Canada in the Aeroplan bid, so there’s a good chance that the current partnership between Aeroplan and American Express will end in the future. That leaves TD and CIBC with an opportunity to capitalize if they make the right moves.
TD has upped the ante by offering the most attractive Aeroplan sign-up bonus currently on the market for its TD® Aeroplan® Visa Infinite : up to 30000 Aeroplan Miles and a rebate of the card’s $120 annual fee in the first year. The offer lasts until March 2, 2020, and is available to those who apply through the link above. TD may want to consider making other long-term improvements in order to remain competitive beyond that date. For instance, it might be wise to add free annual passes to Air Canada’s Maple Leaf Lounges, since other travel credit cards already include lounge access. For example, the BMO World Elite Mastercard comes with a -point signup bonus (value of $250) and Mastercard Airport Experiences provided by LoungeKey, which includes four annual complimentary passes. There’s also the Scotiabank Passport Visa Infinite Card that gives you a free Priority Pass membership and six annual free passes.
Another opportunity for Air Canada and Aeroplan to really get the attention of Canadians is to offer an accelerated earning rate when booking flights on Air Canada with their Aeroplan credit cards. This would be a major reason for consumers to remain loyal.
Maintain and Expand Their Partnerships
As we mentioned earlier, it seems like TD and CIBC will be Aeroplan’s official credit card partners come 2020, but it would be a huge mistake if Air Canada completely severs its partnership with American Express. Right now, American Express Membership Rewards Points can be transferred to Aeroplan at a 1:1 ratio, and consumers that relish this conversion (via cards like the American Express Gold Rewards) will be furious if they no longer have that option for converting points. Air Canada could gamble and hope those American Express cardholders will switch to a TD or CIBC Aeroplan credit card, but that would be a risky bet.
Furthermore, although Aeroplan currently has some retail partners where you can earn additional points, they really need to expand their partner list. This is easier said than done, but every partner they add gives consumers another reason to join Aeroplan or to remain loyal.
According to the Angus Reid survey, 53% of Aeroplan members are not content with the program. This shouldn’t be a surprise when you consider everything we’ve covered above, so Air Canada should really consider some of our suggestions if it wants to increase its market share. If you’re still unsure about Aeroplan right now, you should compare credit cards offered by other travel loyalty programs to see if there’s a better fit for you.