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Friday, July 20, 2018

Aeroplan reveals more details of the program post July 2020 - most economy redemptions remain the same, charter flights and conversion to other frequent flyer programs


Late yesterday evening Aeroplan sent out a press release and posted a video giving us a better picture of just some of what they are planning to offer come 2020 when they split from Air Canada. I was a little surprised by an evening news release on Thursday in July when many people are on summer holidays but maybe, just maybe, they heeded my advice.

A few weeks ago I had the opportunity to speak with Jeremy Rabe who is the new CEO at Aimia, the parent company of Aeroplan. We discussed many topics during our hour long call and one thing I mentioned was to not leave the Canadian public hanging. The earlier news from May didn’t really give us much and I said if you have details of what the program will be like, even if it was just one good thing let us know, don’t wait and don’t give it a chance to lose members by keeping them in the dark. Now chances are I didn’t influence the decision for Aeroplan to release this news and video that they did last night but who knows maybe I did. ;-)

So let’s dive into what Aeroplan is telling us in the press release and video:

Economy Class award flight redemption rates will remain the same for most flights

In the phone call I stressed, as I have in some media interviews that to remain competitive in the market against programs like AIR MILES, proprietary credit card programs and even the new Air Canada program they can’t change their economy class offerings and the good news is they aren’t for the most part.

The press revealed that the following economy class redemptions will remain the same:

• North American short-haul: 15,000
• North American long-haul: 25,000
• Mexico and Caribbean: 40,000
• Europe: 60,000
• Asia: 75,000

These are published as ‘beginning at’ so it does appear Aeroplan's Market Fare pricing will still be part of the program still - that is if a flight is near capacity and the last few seats are pricing out high chances are you will be paying more miles than what is listed above.

We did discuss business class redemptions and I had mentioned they should try to keep business class at an out-sized value as one way to differentiate themselves from their main competitors but the press release mentions nothing so I have a feeling those will change.

Aeroplan (and most frequent flyer programs for that matter) are primarily economy class driven programs. That is when redeeming for travel most program members redeem for economy class and Aeroplan has confirmed this on numerous occasions. Firstly in last night's press release Aeroplan let’s us know that close to 95% of their redemptions will remain the same thanks to keeping the above mileage levels. What does that leave for the other 5%? It leaves economy Class redemptions to Hawaii, Australia, South Pacific, South America and Africa plus all premium economy, business class and first class redemptions. A few years ago Aeroplan raised the redemption rates for many International business class awards and they let us know at the time that it affected less than 2% of redemptions. So we know these premium class awards aren’t the primary or achievable goals for most Aeroplan members. You can even take an example from BMO and AIR MILES, remember when the BMO AIR MILES Mastercard offered an exclusive 25% discount on all flight redemptions worldwide but then changed it to North America only? That’s because almost no one redeemed for flights outside of North America as most members just couldn’t earn enough miles to do so. That is a similar case here with Aeroplan but more so on the economy vs. premium class rather than geographic area.

Any seat any airline

Aeroplan let us know back in April that they will become more flexible in the airlines you can choose. You will be able to book any seat on any airline with your miles. This means they are going to operate like an online travel agency but rather than paying cash you will pay in miles or as they mentioned in the video with a combination of cash and miles. Even if you don’t want to redeem miles you can pay all cash via the Aeroplan site and earn miles for flight, hotel, car rental and other bookings. Anyone remember destina.ca, the first time Aeroplan did this travel bookings? Aeroplan is definitely not going into this blind, they have the knowledge and experience!

Aeroplan only charter flights

Once again going on their past experience Aeroplan will begin offering charter flights that will be for Aeroplan members only. They did this many years ago in conjunction with CIBC for CIBC Aerogold cardholders who could redeem miles for these member only flights. (Here is the offer they had in 2013)

Convert Aeroplan miles to over 20 other frequent flyer programs

Jeremy asked me during our call about transferiring miles from programs and I thought he meant from hotels etc. to Aeroplan. I didn’t even think when he mentioned it about the miles going the other way! After the call I did contemplate it but not to other airlines rather to hotels just like you can with some frequent flyer programs (think Virgin Atlantic to Hilton) But I did not see this one coming - being able to transfer Aeroplan miles to almost 20 other frequent flyer programs! This may be huge but it will all depend on what the conversion rates are. And to many it may come as a surprise it’s not Torontos points.com who Aeroplan is teaming up with for this option! Instead it’s Singapore based Kaligo! Many Rewards Canada readers will recognize Kaligo as we have run exclusive promotions with them in the past and provide extensive coverage of their mileage bonuses for booking hotels with them such as this post: Current Bonus Mile & Point Offers for hotel stays booked via 3rd Party sites - Agoda, Kaligo, PointsHound, Rocketmiles. On the hotel booking site Kaligo has over 40 partners and chances are the almost 20 programs Aeroplan will offer will come from that list.
Which partners will Aeroplan choose?
The press release makes no mention of what will happen on the credit card front and that's simply because most of these contracts extend past 2020 so there shouldn't be many changes. Both TD and CIBC have contracts that run until 2024 with Aimia/Aeroplan although I would maybe see one of them cut the contract short if they bid on the new Air Canada program credit card portfolio and win it. I'd hedge my bets on CIBC for that one. The one card issuer we don't know about yet is American Express. Earlier this year American Express extended its agreement with Aimia/Aeroplan but only to June 29, 2020. That doesn't mean they won't extend it further after that but it does appear American Express is keeping its options open for July 2020.

There you have it. Aeroplan has now let us know what we can look forward to for the most part with the program. There hasn't been much said on earning miles, but that shouldn't change. If the earn is changed they will lose members to their competition that we mentioned earlier. Also there isn't too much mentioned about new earning partners but that sort of news is best kept to their own separate press releases like they did with Amazon.ca.

Related: The Air Canada Aeroplan Saga - All the resources you need

I'd love to hear everyone's thoughts on this news! Are you happy with it? Will you stay with Aeroplan or will you still part ways? Does this give you a better feeling about what the program will be post July 2020? Tell us in the comments section below!

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