Air Canada’s Aeroplan makes an interesting change on the elite qualification front

Air Canada’s spun off frequent flyer program, Aeroplan, is making some interesting changes on the elite qualification front for next year, per this FlyerTalk thread. While the number of miles and segments required to qualify for status isn’t changing, there’s an added requirement — at least 10,000 elite qualifying miles or five segments need to be on Air Canada in order to qualify for any status level.

What’s the significance of this? Well, nowadays many people are savvy and don’t necessarily credit miles to the programs of the airlines they fly with most. You see, Air Canada’s middle tier status only requires 35,000 elite qualifying miles, and gets you Star Alliance lounge access whenever you’re flying a Star Alliance airline. So I know plenty of people that fly around 40,000 miles/year on United, and choose to credit those miles to Aeroplan for the lounge access. The even more common scenario is that someone flies substantially over 100,000 miles/year, and credits their excess miles to Aeroplan. Now, whether or not that’s worthwhile is for a whole different post, because I actually don’t think it’s always worthwhile given the complications that come with constantly switching frequent flyer numbers on reservations.

More than anything else, I find this interesting from Aeroplan’s perspective, especially since they’re a spun off frequent flyer program. Now, I have no clue how they’re compensated by Air Canada and how Air Canada compensates them, but I’m not totally sure if I understand the reasoning behind this. If anything, I would expect a non-spun off frequent flyer program to have this requirement. I guess the question is, do other airlines pay Aeroplan substantially less than Air Canada does for miles that are credited to them? Isn’t it in a way beneficial for Aeroplan to have a lot of members that don’t frequently fly with Air Canada, since (theoretically) they will redeem fewer upgrades for travel on Air Canada and use fewer of their accrued benefits? Does Aeroplan pay substantially less for lounge access to Air Canada lounges compared to partner lounges?

Anyway, I’m not expecting any good answers, though I’m sure there’s some reasoning behind it. Ah, the airline industry secrets that I’m just dying to know…

What I find most interesting is that most Aeroplan members in the FlyerTalk thread above are applauding the change. I don’t necessarily see it as a negative change, but then again I don’t see why anyone would be happy about it either. If someone has top tier status but never flies with Air Canada, what threat do they pose to other Aeroplan members?

Comments

  1. This is probably a matter of tax issues. Anybody that has spent any time up north knows that Canada has high taxes on everything, and there is probably something somewhere that charges them a higher rate for purchases from foreign companies

  2. I disagree with your analysis on the effect of the spinoff. I believe that AC continues to control the elite program (as it relates to flying). Otherwise, Aeroplan would be giving status to its own best customers — those who accumulate a lot of miles from any source, including credit cards. In fact, I suspect that Aeroplan earns more per mile from foreign carriers, first because AC gives them much more volume (therefore likely a greater discount) and second because foreign carriers would likely be willing to pay more to gain non-local customers.

    AC has a cost of elite benefits (e.g. lounge access) even for non-AC flyers, but the mile revenue from foreign carriers all goes to Aeroplan. I think it’s perfectly reasonable for an airline providing elite benefits to require at least *some* flying with them, and 10K is really not a lot for true frequent flyers. This is actually quite similar to all the DEQM promotions the U.S. airlines have had, in which only miles on their own metal counted. Last year, many people would not have attained status on U.S. carriers if they flew only on partners.

  3. “This is actually quite similar to all the DEQM promotions the U.S. airlines have had, in which only miles on their own metal counted. Last year, many people would not have attained status on U.S. carriers if they flew only on partners.”

    This is a very valid point. United used to give CR1’s when one flew 10k miles in a quarter. That actually incented me t fly United. With Unlimited Upgrades, the value of CR1s has gone down (to me) and I no longer track my miles on UA. That has all but removed any incentive I have to fly United. I can fly airline I want and get to Elite. I think this is good thinking on AC/AP’s part.

  4. AC need to do more changes than just the status… they need to something or to add more seats for flight rewards. Everytime my firends and I want to use points from Aeroplan is impossible to find the right flights or the right day with the minimum.. The availability is always for double the miles or other calss of service. I decided to stop collecting points in Aeroplan. For Star Alliance collect with UNITED or Miles & More frmo Lufthansa… Tehy are so easy to find flights with the published miles to use….the same with AAdvantafge..they are easy to get flights…

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