Aeroplan (finally) changes their award chart… ouch!

I love Aeroplan, which is Air Canada’s spun-off frequent flyer program. For the past several years I’ve woken up every morning asking myself when the Aeroplan honeymoon would be over. It’s thanks to Aeroplan that I’ve been able to take trips like this one (from Tampa to Chicago to Zurich to London to Istanbul to Hong Kong to Bangkok to Munich to Zurich to New York) and this one (from Tampa to Washington to Tokyo to Singapore to Bangkok to Tokyo to Seoul to Frankfurt to Seattle), each for only 120,000 miles in first class. Best of all, since Aeroplan is a transfer partner of American Express Membership Rewards, it wasn’t all that tough to come by Aeroplan miles.

Obviously in the long run those kinds of award costs were unsustainable. While I don’t have the slightest clue how much American Express pays Aeroplan for miles transferred to their program, I can’t imagine that amount covered the cost that Aeroplan had to pay their partner airlines for awards like the ones above.

So as of July 15, 2011, Aeroplan will be adjusting their award charts a bit.

Aeroplan has two award charts — one for travel on Air Canada, and one for travel on their Star Alliance partners. I couldn’t care less about the Air Canada reward chart, because Aeroplan imposes fuel surcharges for awards tickets on Air Canada, while they don’t for award tickets on their Star Alliance partners.

For the most part the changes are reasonable, I suppose fair mileage “inflation” over the years, given that they haven’t made any changes in a long time. For example, business class from the US to most of Europe goes from 80,000 miles to 90,000 miles, which is still a bargain. Some award prices are even going down. For whatever reason Aeroplan was always incredibly overpriced for travel to the Middle East, Africa, and India, charging about 50% more than the likes of Continental, United, etc. So those award prices are going down, though they’re still overpriced compared to the competition.

But then there are a few awards changes that sting. US to Europe first class awards are going from 100,000 miles per person to 125,000 miles per person. They’re still priced below most of the competition, though it is a 25% increase. I can totally understand that. The same goes for Australia, where business class goes from 100,000 miles to 135,000 miles for business class (a 35% increase) and 140,000 to 185,000 for first class (over a 30% increase… ouch!).

What really, really, really bites, though, is that my favorite award, between the US and Asia, goes from 120,000 miles to 175,000 miles. That’s over a 45% increase!

Look, I wish I could be mad at them, but I really can’t. I’m betting that 45% increase mostly reflects how much those kinds of awards cost them, given how many of us booking first class awards travel via Europe to get to Asia.

More than anything else, this massively decreases the value of American Express Membership Rewards points. In the past I would say that 80% of awards I’ve booked for people through Membership Rewards have been either through Continental or Aeroplan — I would book awards through Aeroplan for travel to Europe, South America, Australia, and most of Asia, while I would book awards through Continental for travel to Africa, the Middle East, India, and Asia “region 2″ (places like Indonsia, Malaysia, etc.).

Well, as of September 30, Continental’s partnership with Membership Rewards ends, which is a huge loss for the program. At least there was still Aeroplan, though now they’re not looking like quite as good of a deal anymore. There’s always All Nippon Airways, which is also in the Star Alliance, though the issue is that points don’t transfer to them instantly and they don’t allow holds in the meantime, so by the time you transfer points the award space will likely be gone. They also impose fuel surcharges on awards, which makes them less attractive.

If anything, this change increases the value of Starwood points (as they have more partners) and decreases the value of Membership Rewards points.

Anyway, to my friends at Aeroplan, I don’t blame y’all. Sucks for me, but you guys have always been very reasonable and while these are huge increases for certain regions, there haven’t been any other increases in a long time, so…

Comments

  1. Despina says

    I read the news on another blog and was eagerly awaiting your analysis. So, for those of us who have Starwood points and it looks like Aeroplan is no longer the bargain it was, where should we transfer our Starwood Amex points? We typically travel to Europe.

  2. lucky says

    @ Despina — For Europe there unfortunately isn’t really a better value out there right now. I’d say US Airways is a better value for Asia now, though with a straight 1:1 conversion isn’t better for Europe. That being said, every July US Airways seems to run a promotion whereby they offer an additional 50% transfer bonus from Starwood to US Airways, so if they run that again, that might be your best bet. No guarantee they’ll run it, but it’s worth watching for. Though if you’re just looking for a place to “store” miles, I wouldn’t want to keep miles in a US Airways account for too long.

    @ Cecilia — It should be for ticketed travel by then.

  3. A. S. says

    Like you, I don’t blame them for raising their prices. But a smarter approach, from a PR perspective, would have been to introduce slight increases over the years rather than these large, sudden increases (advance notice notwithstanding). It’s almost like a new director came to Aeroplan and said, “What the heck is this — raise everything, we’re bleeding!” :)

  4. Brian says

    The changes themselves don’t bother me, since they’re still below the competition, but when you add that to the 7 year ironclad expiration policy, it feels like a bigger hit. Other programs might charge, say, 135,000 miles for first class to Europe, but if they don’t have the rigidity to their expiration policy, you have more time to earn the extra miles.

    Aeroplan’s expiration policy seemed reasonable because of their lower award prices. I don’t really blame them for raising their prices, but now there’s less room between them and the other programs. That, in turn, makes me look more at programs with less stringent expiration policies.

  5. says

    @lucky Both your “this one” link both refer to the same blog post, I think the second one should refer to different post.

  6. lucky says

    @ A. S. — I kind of agree and kind of disagree. If you’re constantly increasing your award prices, even if it’s only minor increases, the program is perceived to be subject to constant inflation. This change stings, but it’s the first one we’ve seen in a long time and probably last one we’ll see for a while. I guess it’s a function of whether you’d rather be subjected to a lot of pain for a short time or a little pain for a long time… sort of.

    @ Mike — Thanks for the heads up, fixed!

  7. Monty says

    Huge increases in the program, given their de-valuation of various elite status in the past year is somewhat painful. Maybe Aeropesos is now somewhat justified. Not enough notice for my liking but what can you do.

  8. Gary says

    Thanks lucky…

    This is the first time I know that United has a really low redemption rate for Asia…

  9. CaySquared says

    So…you’re suggesting we cash in our points by 7/15 and do your “this one” example and set off into the sun? If so, suggest some cool example for May and June (if you want)!

  10. Max says

    I did hurry to book some flights before the hike! YUL-MUC-HKG / SIN-MUC-YUL both in first class (120,000 points + 351$). If I want to make change to this ticket however after July 15, I will be charge the 55,000 points needed! So no way!

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