Wednesday, August 28, 2013

Is Air Canada Altitude descending?

First time Rewards Canada contributor Sol Zia gives us his perspective on the recent Air Canada Altitude changes that we mentioned back on August 21 (click the link for complete details on the changes if you are not aware of them yet)

Recently, and rather unceremoniously, Air Canada (AC) announced a number or changes to miles accumulation and upgrade benefits at various tier levels in their fledgling Altitude program. Those changes were summarized in an email dated August 19th and more details could be found on the Air Canada Altitude website. Reading the email sounded like a doctor telling you a good news, bad news prognosis and starting with the good news without even asking.

The good news, and it's been a long time coming, is the ability to earn status miles (Altitude Qualifying Miles if you will) for Tango fares that previously did not qualify for status miles. And now for the bad news, and there's lot of bad news, starting next year, upgrading will be a costly affair and upgrading companions will be more challenging (not that it started out easy). Unless you are Super Elite (Super Elite 100K to be precise) you will be required to pay an add-on, on top of surrendering those hard earned e-upgrade credits on AC long haul. Further bad news came in the body of reduced ability to upgrade those traveling with elite tier travelers. This will be most felt by Super Elite 100Ks with family who were looking to upgrade their loved ones on  paid or award tickets to that far off vacation destination. It has only been a year that Super Elites have had the feature of upgrading on award tickets and next year it will be gone.

"What's the big deal?" you say, "Many US carriers are already doing this!" True, but Air Canada has started out with add-on price points between $500 and $750 CAD well above where US competitors started. AC has chosen to price the add-ons competitively to the marketplace versus a more gradual approach or more discreet add-on levels by distance traveled. By taking such a sweeping approach to 25, 35, 50 and 75K level members one might predict that further changes to each sub-Super Elite level are coming. The trend for US carriers has been to widen the gulf between tiers so with so many tiers AC may rapidly follow suit and eliminate benefits for the "lower" tiers. With so much profit concentrated with 50, 75 and 100K members AC could, arguably, reduce benefits at the 25 and 35K level without much economic impact. At the 25 and 35K level members are clearly doing fewer long hauls so the knee-jerk compulsion to switch to United or other Star Alliance members makes only emotional sense as United would offer no greater benefit to a 25 or 35K member.

At the 50, 75 and 100K level things are a bit more interesting as switching earning designation could yield improved benefits on, for example, United while retaining Star Alliance Gold status giving you access to elite check-in counters, no fee and prioritized baggage, domestic lounges and advance boarding. It will be interesting to see if defection becomes measurable and AC has to examine some of its recent changes to Altitude.

At the end of the day these changes make a great deal of economic sense to Air Canada and devaluing 25 and 35K members may prove a winning bet. Let's see if the bet pays off for the 50, 75 and 100K members.

Sol Zia, a loyalty consultant, has been an Air Canada Super Elite (100K) member since he first fast-tracked out of Elite in 2003.


  1. Indeed AC has almost thoroughly gutted its elite tier benefits for those not SuperElite next year. Having seen signs of such diminution coming, I stopped posting STAR flight miles to my (then) SE account and moved them into my UA MileagePlus account, leaving me with 75KElite this year with AC. Not a single STAR flight mile has gone into my AC Aeroplan account (all went into MP) and I have only flown AC to use up my eUpgrade credits on domestic routes.

    Last year there were too many changes to consider remaining with AC, among them: increased fare levels required to use eUpgrades on overseas flights, reduced earning levels of eUpgrades; lowered mileage earning for overseas fares; significant increases in required number of miles for premium overseas award tickets (with another coming in January 2014) and huge surcharges for most award tickets.

    While my business would not be considered significant to AC (my spend of about $15K a year is not insignificant either) and all but about $1K now gone to UA and AA. This year I will requalify for both UA's and AA's top elite tiers whose benefits put AC's in the dust. Unlike the majority of SEs I don't work for a company that can afford higher fares. As a small business person, I try to keep my travel costs as low as possible and not gouge clients unfairly to cover such expenses. And at the same time take advantage of legitimate ways of maximizing the creature comforts of air travel.

    This decision to abandon AC was not easy, since I was a charter member of both the AC and CP frequent flyer programs back in 1984. I have racked up several million miles/points in these programs over almost 30 years, an elite in both since they started. (And with well over two million AC/CP seat miles earned over that period, AC would not even recognize me with Million Mile status since it discounted any in-seat miles earned flying CP, and any miles earned prior to 1989!) AC put me through university through my summer job as a reservations agent for three years, and as their campus rep for two. So my severing of this relationship was a step I took with reluctance, but with good reason.

    I hope to have another five good years of flying ahead of me before I slow down (at age 70), so while I know the benefits of the US programs will be reduced to some degree, I doubt they will ever descend to the level AC has brought to Altitude!

  2. I couldn't agree more with the comments above.

    I have been 50KElite for 20 years. The only real advantage of being a part of Aeroplan was the chance my Wife and I might get an upgrade with my certificates on our trip to Europe each summer. And we only had the opportunity if we paid a higher fare. Now that it's going to cost me another $1,000 so AC can show their appreciation, I'm done.

    I've been questioning for a while if I am better off to just pay the lowest fare available on any airline then purchase the occasional long haul seat in Premium Economy, Business, or First. At times, buying another airline's premium cabin isn't much more than purchasing the higher fare required by AC to have your upgrade credits considered.

    I didn't know if I should focus more on DL or AA as they both fly out of my city. I have discovered if you join Alaska Airlines program you receive Qualifying Miles when flying DL or AA, and they both recognize your Alaska Status, effectively making you a status flyer on all 3 airlines. You only need 25,000 miles total to get the perks I want (Priority Check In, Baggage, and Boarding and waived baggage fees). It also appears DL is extremely generous with its upgrades on North American flights - even to Alaska Airlines Members.

    To keep my Star Gold Status, I have enrolled in Aegean Airlines Frequent Flyer program, You only need 4,000 Miles for Star Silver and 20,000 for Star Gold. Ironically, I will pretty much have Gold due to a long haul flight I have booked on AC. (I won't be nearly as tied to AC next year as I won't be trying for upgrades). You have to be careful though, as some flights may not give you any miles.

    Finally, if I decide to go back to flying only Star Alliance, I will get a Status Match on United using my Alaska Status. Reading the forums on Flyertalk, UA Status Members seem very happy with the frequency UA upgrades them (no Upgrade Cert's required), and UA Status members are always seated in Economy Plus.

    For those of you who are members of AC because of Aeroplan, UA's program can get you on AC flights for much less. For the exact same AC flight (YYZ - YVR), AC requires 17,000 miles, UA requires 12,500 and AC is $83 while UA is $27. UA and many others do not charge the fuel surcharge on award flights like AC does. Check out Flyertalk for more examples, or apparently you can search on each Airlines award travel site to compare specific flights.

    Bottom line: I'll hopefully have status on Star Alliance, DL, and AA by picking the least expensive seat and not paying up in hopes of AC throwing we the occasional bone. I'll use the money I save to pay a slight premium over AC to get a nicer cabin on long hauls which in turn will give me bonus miles toward status.

    1. Thank you for comment, one note as of Jan 1 Aeroplan will also be 12,500 for one way between YYZ-YVR however the fees will still be higher!