Air Canada Adds Revenue Requirement For Status Qualification

While US frequent flyer programs seem to be taking the hardest hit lately in terms of devaluations, it looks like our friendly neighbors to the North are drinking some of the US airline Kool-Aid as well.

Air Canada Aeroplan will be adding a revenue requirement for status in 2016, by introducing what they call Altitude Qualifying Dollars. That means if in 2016 you want to qualify for status in the 2017 program, you’ll have to spend up. Why are they introducing these changes? In their own words:

These changes reflect similar requirements in other global frequent flyer programs and will ensure that we continue to better recognize our most valued customers.

So yeah, they’re doing it because all the cool airlines are doing it, and they think the way to “better recognize [their] most valued customers” is by thinning out elite ranks without adding more benefits.

Air-Canada-Revenue-Requirement

So how much do you need to spend to earn status in the Air Canada Altitude program?

  • Prestige 25K status requires 25,000 miles OR 25 segments AND 3,000CAD spend
  • Elite 35K status requires 35,000 miles OR 35 segments AND 4,000CAD spend
  • Elite 50K status requires 50,000 miles OR 50 segments AND 6,000CAD spend
  • Elite 75K status requires 75,000 miles OR 75 segments AND 9,000CAD spend
  • Super Elite 100K status requires 100,000 miles OR 95 segments AND 20,000CAD spend

Air-Canada-Revenue-Requirement-1

It’s interesting that for Prestige 25K, Elite 50K, and Elite 75K they’re aiming for a revenue requirement of 12 cents per mile. It’s even a bit lower for Elite 35K, at 11.4 cents per mile, though presumably that’s just to keep the numbers round.

But then at Super Elite 100K status that requirement increases immensely, to a whopping 20 cents per mile.

It’s pretty clear what Air Canada is trying to do here is decrease the number of people with SuperElite 100K status, as they’re hit the hardest with these changes by far.

The one positive aspect of the change (if you can call it that) is that Air Canada is eliminating the minimum Air Canada Flight requirement for status in the 2016 program year.

Air-Canada-Requirements

There are two other things which are noteworthy:

  • While Delta innovated the revenue requirement and United followed, they both waive the requirement if you spend a certain amount on their credit card. Air Canada isn’t offering such an alternative method of reaching the requirement, at least as of now.
  • Air Canada is continuing to award miles based on distance flown, but is adding a revenue requirement. This is the opposite of American’s recent changes, whereby they began awarding miles based on distance flown, but didn’t introduce a revenue requirement. In fairness, Aeroplan also awards 25-50% of miles flown for many discounted fare classes, so they’re not like US airlines in awarding 100% miles even for discounted economy.

Air-Canada-Earn-Miles

Bottom line

Of course it sucks to see programs devalue and increase the requirements for status. In this case the ~12 cent per mile threshold doesn’t seem totally unreasonable (keep in mind this is in CAD and not USD), while the 20 cent per mile threshold for Super Elite 100K is staggeringly high. I suspect this will cause a lot of people to lose their top tier status.

Air-Canada-787

What do you make of airlines introducing revenue requirements — a good way to thin out elite ranks, or just plain greedy?

Comments

  1. That’s 20 Canadian cents per mile, which is 15 US cents. Still more than the 12 cents per mile that United requires for 1K status, but I wouldn’t call it “whopping.”

  2. @ Andrew — To clarify, I consider it “whopping” more in relative than absolute terms. In other words, that the revenue requirement varies from ~12 cents to ~20 cents.

  3. They are “greedy” AND it’s a good way to thin the ranks.

    It’s a corporation. It’s not going to love you bcak.

  4. It stands to reason that AC has set a higher price than any of the US carriers. They are the only Canadian carrier within an alliance. They can screw us and get away with it, so they do. Very very few Canadians have the option of choosing an alternative. Travel within Canada is either on AC or on WS, which has no useful loyalty program, no premium cabin, no lounges, no alliance partners. Business fliers are captive to this wretched outfit.

  5. It seems short sighted, while I understand the business aspect of thinning the top rank. It seems that the more devaluations these companies throw out, the less loyal they make all of their customers. They may very well succeed at saving some money here, but they may also drive away a loyal base that brings them much of their revenue.

    Maybe this isn’t a big enough deal to worry about the loyalty of these customers… then again with that logic, they shouldn’t be a big enough group to justify the savings this would bring.

  6. YYZgayguy: They’re not greedy. These companies are for profit organizations. I never understood why shall an airline reward an average travel so highly based on the number of trip s/he takes.

    I know many of you will disagree mostly because these changes affects you but in my view an airline shall reward their best customers the most. In other words those who spend the most not who flies the most on discounted tickets.

    I’m thinking about switching from BA to UA purely because of their revenue based loyalty program. I earn around 25-30k miles per trip with BA (paid first) while I could earn 75k miles with United. United miles worth a bit less for sure but not this much.

    Personally I hope more and more airlines will switch to the revenue based model to reward those the most who spend the most.

  7. A good reason that they would not link the credit card and revenue requirement is because the Aeroplan program (and thus credit cards) is not run by Air Canada.

  8. DL has the loosest revenue requirements as their credit card spend waiver applies to Diamond Medallion and some ancillary fees count. UA stops at Patinum for PQD waiver and since AC has no credit card waiver and higher spend for Super Elite, they take the bottom of the barrel.

    A pox on all their FF program executive’s 🙂

  9. @Aquarius: The reason airlines “reward an average travel so highly based on the number of trip s/he takes” is that it paid off for them. The airlines need the economy revenue very much and a growing segment of economy fliers are aspirational status-seekers and points collectors. The purpose of Altitude isn’t to “reward”, it’s to attract. Making top-tier unattainable might not be a winning strategy, because it won’t make you (paid F traveller) more loyal. It’ll thin out the ranks, which cuts costs and makes high-end resources less crowded, which increases comfort and exclusivity. But there’s a downside: If I can’t possibly reach the top tier in AC, I might take my CAD$17,874/yr spending to American or Delta.

    You’ll be pleased because your upgrades will clear more and cabins and lounges will be emptier, but will AC win in this scenario? I’m sceptical. I think they’ve overreached with the $20,000 and that their greed motive has been instrumental in this bad decision. They’ve underestimated their downside in this tactic.

  10. As noted, since credit cards are affiliated with Aeroplan which is a separate company, there will be no credit card waiver since AC sees none of that money

  11. As wpj pointed out, they are eliminating the minimum AC Flights requirements, but here is their definition of Altitude Qualifying Dollars:

    You will earn Altitude Qualifying Dollars (AQD) for the base fare and carrier-imposed surcharges (Y, YQ and YR) on eligible flights flown, including:
    • Flights operated by Air Canada, Air Canada Express and Air Canada rougeTM. This includes codeshare flights marketed by another airline and operated by Air Canada.

    •Codeshare flights marketed by Air Canada and operated by Star AllianceTM partner airlines ticketed on Air Canada ticket stock (ticket numbers beginning with “014”).

  12. Thank you Air Canada.

    Lucky, you should realize that $20 000 is not really that much spend, the target super elite 100K is a business traveler of which they are generating profit from. Specifically business travellers who fly paid business class. Unlike travers like yourself who although they fly hundreds of thousands of miles a year, spending very little money on their tickets (AA’s Beijing mistake fare) and cheep economy tickets whining when they don’t get an upgrade. I believe that this was a great move by Air Canada and would love to see other airlines utilize this platform so that airlines don’t lose money awarding these perks. If airlines don’t do this they will continue to limit perks for elite members.

    Just my 2 cents.

    Will

  13. AC’s trying to cultivate an image of relative exclusivity where only those who’ve paid for the front cabin sit in the front cabin. And that its top-most elite tier caters to the cream of that crop. Research has likely shown that the senior exec class doesn’t like to travel with lesser sorts, and AC had watered its elite program to let too many 99%ers into the SE ranks. Time to prune the top of the tree. After all, aside from a very few individuals who pay their own way, those paying the full tab to fly up front come from corporate ranks, and have their tickets paid for by their employer (or client). They like to see their fellow Albany or Granite Club members in the seat next to them, not the guy (or gal) who’s club is the Y.

    AC’s 75KElite tier will be the top tier for the 99%ers and I suspect the 50KElite tier will slim down as more TANGO fliers end up as 35KElites instead of the higher STARGold tier. However, the 50KElite tier will continue to grow, albeit slightly more slowly, but as more AC fliers in their 60s start earning Lifetime MM status from 30+ years of flying AC for business, but never quite cracking the upper tier ranks. Averaging 35K EQMs over those 30+ years will see a mounting number of these folks so it will be interesting to see how AC modifies the benefits of this tier, and its Lifetime MM program to shave costs.

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