Aeroplan Outlines Their Vision For The Future

There are some interesting updates from Aeroplan this week, including some changes in management, and also a look at what they’re hoping to do in the future.

Aeroplan and Air Canada are cutting ties

Aeroplan is Air Canada’s spun off loyalty program. A bit over a decade ago Air Canada sold their loyalty program due to the financial situation they were in, and that contract is coming up for renewal in 2020.

Last May Air Canada announced that they wouldn’t be renewing their contract, and that they’d be cutting ties with Aeroplan in 2020, which is obviously devastating news for Aeroplan. While many Aeroplan members weren’t happy, the reality is that Air Canada was going to take back their loyalty program no matter what. Now that the airline is doing well, there’s simply no reason to have a spun off loyalty program.

This puts Aeroplan in a bad situation. Air Canada was their biggest partner, so what will this loyalty program look like in a couple of years when it’s no longer associated with the same airline?

Aimia’s CEO has stepped down

Aimia is the parent company of Aeroplan, and it has just been announced that their CEO is stepping down. According to CBC:

The company said in a news release late Thursday that Johnston and the company’s board of directors “mutually agreed on his departure,” but did not elaborate.

“I am proud of the results we have achieved over the past year despite significant challenges” said Johnston in a release.

“As Aimia reshapes itself with a tighter business and geographic footprint, it is the right time for me to further my career elsewhere.”

I can’t blame the guy for moving on, as it seems like there’s limited upside at this point in sticking around a sinking ship. While it’s possible Aeroplan may be able to survive independent of their Air Canada partnership, I definitely don’t think they’ll be able to thrive.

Aeroplan announces “an all new program”

What I’m most curious about is what Air Canada’s loyalty program will look like in 2020, when it’s fully formed. However, I suspect it will be at least a year or so until we learn the full details of that program.

While the implications for most people aren’t as big, I’m also curious to see what Aeroplan hopes to do in the future, and it looks like we have an update there.

Aeroplan has shared what they call key commitments to members starting in July 2020 (in other words, post-Air Canada). Aeroplan says they want to redefine travel rewards and continue their ongoing transformation into a superior travel and booking experience. Here are what they claim their six brand commitments are, which are rooted around flight rewards, value, personalization, and member experience:

  1. The freedom to choose any seat on more of your favourite airlines: Starting in July 2020, you won’t be limited to seat inventory from one airline or one network when you want to redeem valued miles. Instead, you’ll be able to choose any available seat from more airlines to more destinations than today.
  2. The power to reach your travel plans faster: With the ability to earn miles faster and redeem for flights on more of your favourite airlines starting in July 2020, including with future preferred partners, we’re committed to helping our members travel sooner than with other travel reward programs in Canada, just as we do today.
  3. A complete travel offering in one place: Today, you can browse more car rental options than ever before. Tomorrow, an intuitive planning and booking engine will offer you a greater selection of accommodations, destination activities, vacation packages and inspiring content directly through our website and mobile app.
  4. Unmatched convenience & flexibility: When you earn fast and often, you can get to your travel plans sooner. The convenience of earning on thousands of everyday items in-store and online at over 150 partner brands, flexible payment options plus the ability to earn miles on all cash bookings made with Aeroplan means realizing your plans is easier than ever.
  5. A more personalized journey: Enjoy a unique travel experience that is more rewarding and tailored to your needs as we proactively serve up suggestions, content and offers based on the things you like.
  6. An altogether transformed user experience: Staying at the forefront of technological trends, we will reinvent your user experience at every level from mobile to online right up to the Aeroplan Contact Centre.

There’s not much in the way of details here, though in general it sounds like Aeroplan’s long term goal is to become a points currency where members can redeem points towards the cost of a revenue ticket on any airline, in the same way you can redeem Ultimate Rewards points for 1.25-1.5 cents each towards the cost of a ticket, for example. Furthermore, they’ll focus on technology to make the member experience better.

The much bigger question, though, is how members will be able to earn points. Presumably they’ll hope to have a co-branded credit card, partner with transferable points currencies, and give members other opportunities to earn points. But without being a program directly associated with an airline, that will be a really tough sell.

What do you make of Aeroplan’s vision for the future?

Comments

  1. This will impact the way I view AmEx Membership Rewards points. I guess I’m most curious about that since I don’t fly Start Alliance airlines unless it’s on an award.

  2. Well AIMIA is not a sinking ship. They still have stakes in other programs including (I believe) 49% of Aeroméxico’s Club Premier. Nevertheless, the departure of AIMIA’s CEO after losing their biggest customer must mean that, most probably, he was sacked from there.

  3. Yes whenever your a card/loyalty plan mention you can redeem your miles for a seat on any airline at any time you know you know it’s a points currency and not a true mileage plan.

  4. Long ways to go… pretty bad website… can’t search ciry codes like NYC as everyone else does, have to use JFK, EWR etc. Super annoying.

  5. This is confusing. So after July 2020, if I’m flying a Star Alliance airline, I can credit to AC’s own program, but not to Aeroplan? Are there any carriers where I can credit flights to Aeroplan? If not, sounds quite useless to me.

  6. Man, Air Canada really fleeced those IPO buyers, didn’t they? Got all that cash for the spinoff and then 15 years just blow up the value or the spunoff company. Will be high comedy if they try and spin off their newly created program in 2025.

  7. I love commitment 6

    “An altogether transformed user experience: Staying at the forefront of technological trends, we will reinvent your user experience at every level from mobile to online….”

    For the last 3 years or so I have been telling them that their log in pop up box doesn’t work on touch screens. And it’s still not fixed. And the new system for searching for rewards certainly leaves a lot to be desired. It’s all style, with no underlying substance.

    I have to say that my user experience is being transform into something worse with every “enhancement”. Looking forward to 2020.

  8. Aimia sounds like politicians promising things like inclusion and social liberties. Beautiful talk, nothing really tangible. Unless Amex gives me more choices on points transfers, I’m not really keeping their cards for much longer.

  9. So, basically, their plan is to become a competitor to Air Miles. I mean, that’s about the only strategy you can have as a rewards program that loses its attachment and access to an airline and its alliance. Thing is, I don’t know how much space there is for such a program. In terms of general rewards, you have PC Optimum (fka PC points and Shoppers Optimum) that gives straight-out cash. Air Miles gives cash focused on travel. Canada doesn’t need another general points program floating around.

  10. @ Neil – Here, I fixed that for ya…

    Yes whenever you card/loyalty plan mentions you can redeem your miles for a seat on any airline at any time, you know you know it’s for suckers.

  11. DCJoe, when ACE (the holding company of AC, Aeroplan, JAZZ and other units of the post-bankruptcy AC) spun Aeroplan off completely it wasn’t as an IPO. It issued all the shares to its own shareholders who could then hold them or sell them at whatever the market ultimately valued the company. Also Aeroplan/AIMIA’s first president was technically in the chair when AC made the doomsday announcement about severing ties, though on sick leave with Johnston acting in his place. AIMIA had its annual shareholder meeting in Montreal this morning thus all the “news” yesterday and today.

    As for Amex MR, Amex’s primary link is with AC so it is likely to continue transfers to the new AC program (Altitude?) that will include STAR awards and drop Aeroplan.

  12. I think the best thing is to face reality and to realize that Aeroplan is not going to be the plan that we have now. For all its faults, as a Canadian resident it is and has been my go to plan for award flights. For a reasonable number of miles, most people would be able to get a pretty good flight and if you were careful even the taxes could be mnimized.
    All we can do is to make use of our points as soon as possible, get the best value possible and reassess our position in the future.
    If Air Canada’s new award system is as good as Aeroplan, we will not have a lot to complain about.
    Aeroplan will not have any choice but to fashion itself into a plan similar to Airmiles or possibly Amex’s miles for dollars. These are not terrible but really are not the plans that the awards clan like to patronise.

  13. Benjamin schlappig you just explain just how aeroplan makes and spends money. That will help us evaluate how they will survive iving the future. Don’t just regurgitate their press release. Add some value to it.

  14. The customer service at Aeroplan, for the most part, is terrible.

    Long waits, horribly broken website that is closed for several hours of the day at night, emails that never get answered / resolved, and 4-6 week waits for any points to credit for almost anything.

    The credibility of the program is seriously lacking for continuing on with customers.

  15. “I don’t want more choice, I just want nicer things!”
    -Edwina Monsoon

    Aeroplan has nothing to offer us OMAAT readers if they aren’t AC’s loyalty program. Nobody in this hobby uses Air Miles to fly and we won’t use Aeroplan to fly, because the points’ value will be fixed to revenue ticket prices. Business class revenue ticket is 3x economy? Then that’s 3x the Aeroplan miles. Nobody reading this blog is interested in that.

    However, Canada is full of ordinary, ignorant people with Aeroplan miles who don’t expect to ever fly in Business. They think the guys sitting up front are “rich”, or their companies are paying the high revenue fare. They don’t churn credit cards, they don’t take advantage of Welcome Bonuses and they don’t redeem at the Sweet Spot on the redemption chart. These people will give Aeroplan some breathing room. Air Miles will have a competitor. These people will spend their energy deciding between the two, as they do between “Rogers and Bell”, the two companies they think are their only choices in telecom.

    When God sends a sheep, skin it!

  16. There could be a niche to be filled in a points based system that is revenue based, but the conversion rate is what matters. At 1 cent per point the model would be of little interest. But Southwest is successful in its own program because its miles are worth more than that. What if you could get 1.5 cents of travel across many airlines for any seat with each Aeroplan point? No, the people requiring international business class wouldn’t be interested, but a lot of people could find value, particularly if the points are relatively easy to come by.

    I don’t know the economics of how that could work, but the Aeroplan management better figure it out if they want to have a business. And I do think there is increasing room for more models in the current state of the miles and points business.

  17. So what happens in 2020? Will Air Canada fliers have large balances they cannot use for Air Canada flights anymore and new flights will go into new accounts? Sounds like a big dip in redemptions coming.

  18. I think the key hint to the future is in Commitment 3.

    It looks like Aeroplan is trying to reposition itself as a one-stop-shopping travel portal with points. So redemptions will be for complete travel packages – flights, hotel, rental car, activities. You can already do most of that now, but I wonder how big the non-flight redemption part of their business is. That’s the most obvious place for them to grow.

    Flight redemptions on other airlines are somewhat problematic for Aeroplan post 2020, because Air Canada only has one domestic competitor in WestJet. Obviously there is a panoply of other airlines internationally, but it may be a challenge to sign up many of them, I suspect. But we’ll see.

    When the announcement of the divorce came last year, I was in the midst of working toward a Round the World vacation. For a variety of reasons it was proving difficult to coordinate vacation time with my spouse, and we decided to scrap the RTW for now. Which left me with 1.1 million Aeroplan miles. So I started burning. Several relatives had some very nice trips last year, using up 900,000 miles. Earn and burn is now the order of the day. I hope not to have very many miles left in June 2020. The last resort redemption would be for an Air Canada gift card. The value isn’t great, but it is a viable way to use up any remaining points and turn them into air travel.

    The interesting question going forward will be what credit card offerings will be out there, and what the start-up for the new Air Canada loyalty programme will look like. Lots of interesting bonuses I’d guess. We’ll have to wait two years for those details.

  19. I can’t say I’m sorry to see AC and Aeroplan break up — their “partnership” is a hot mess. I had an easier time booking seats on an AC flight with United miles and LifeMiles than with Aeroplan miles, which makes ZERO sense. Now the Aeroplan-booked ticket doesn’t show up on either Air Canada OR on Aeroplan — it’s like it’s floating out there in the aviation ether somewhere.

    Hope whatever AC uses as their “new” miles plan will be a vast improvement over the Aeroplan deal.

  20. @eileen

    If you can’t find your ticket on AC or Aeroplan it usually is a warning of a problem that needs to be checked out quickly. Had this happen a few years ago caused by a UA schedule change that caused the itinerary to be non-functional. Only AC’s trouble desk could fix it at the last minute after repeated phone calls.

  21. What are the chances that AC new program will have the cheap flight Classic Awards? ZERO! Best to start collecting convertable miles or join another*A program. Too bad SPG AMEX is devaluing their everyday awards Aug 1.

  22. Sounds like they’re positioning themselves to merge with Air Miles. Canada isn’t that big a market, hard to see how it can support two points currencies.

  23. As a Toronto resident Air Canada is my main carrier, and these days with Aeroplan, I’m “earnin’ ’em ‘n burnin’ ’em.” As soon as I have enough for the flight I want, I cash out. I don’t want to be holding a bag of useless points when the whole mess goes south. But I’m still holding out hope that Air Canada is deliberately driving Aimia’s share price down in hopes of scooping Aeroplan back up on the cheap.

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