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Friday, August 14, 2020

The Good, The Bad and The Ugly of the new Air Canada Aeroplan program

 

Many moons ago we used to run a series here on Rewards Canada called Redemption Stories The Good, The Bad and The Ugly. The series had our readers tell us stories about redeeming points or miles from various loyalty programs from the good to the bad all the way down to the ugly. So why not resurrect here with the new Aeroplan program as it is only fitting since Aeroplan was the first program featured in the series way back in March 2012. You can read that original post here.

The original series focused on redemption so I'll bend our own rules with the return of the series covering all aspects of the new Aeroplan program and I'll provide what we think is Good, Bad and Ugly. Ultimately once the program is up and running in its new form I'll reach to the Rewards Canada community to have a reader based version after we all get a chance to experience the new program.

The Good

No more carrier/fuel surcharges
Say goodbye to paying hundreds of dollars in extra fees when flying on Air Canada, Lufthansa or any number of other Aeroplan airline partners who had those fees added to their reward flights. Fly on Air Canada and there are none of those dreaded airline surcharges while the most you'll pay is a $39 booking fee for travel on partner airlines.

Aeroplan Mileage Earn Rates for flying
Think about what it costs to fly in Canada - a lot of times it costs more to fly to St. John's Newfoundland than it does to London, Paris or Tokyo. Or how about being in a small city only served by Air Canada like Sudbury? Chances are you will earn more points now on those flights since it is revenue based and with those tickets being more expensive you'll earn more points than you would have in the old mileage based system. This especially holds true for elite members who earn extra points per dollar spent.

The Aeroplan earn rates for a Super Elite member

Family Sharing
You will be able to create a group of 8 people to pool points from to make it easier to reach those reward goals

Enhanced benefits for credit card holders
From first bag free to earning elite status miles and dollars, companion vouchers to rollover EQMs, the suite of Air Canada Aeroplan co-brand cards get some major boosts.

Recommended reading:  A closer look at the new Air Canada Aeroplan credit cards

Elite status enhancements
New benefits like Priority Rewards, Status Pass (share status benefits), additional elite qualifying miles and dollars earning options and more. The ability to earn elite status without even flying is a great segue for those who had status in the old Aeroplan elite program into the new combined elite program

Better redemption options
From being able to access Signature Suites when you redeem for higher fare awards, to almost endless routing options, to easily combining Air Canada and partner airlines in one booking, the entire redemption process will be better.

Points + Cash redemptions
If you don't have enough points for a rewards you can pay with a combination of Points + Cash. You can also use points to pay for taxes and fees at a better rate than was seen in the old program.

Some redemption rates
Some award redemptions have become cheaper. For example some short haul rewards will now only cost 12,000 points versus the old 15,000 for a round trip. You have to remember that the greatest percentage of Aeroplan redemptions are for economy class flights within North America and for the most part those remain very close in points requirements between the old and new programs.

The Bad

Aeroplan Mileage Earn Rates for flying
Yes we had earn rates in the good section but that's only for a sub-section of flights. Now look at routes where there is lots of competition and the revenue based model will likely see you earning less than the old mileage based model. This is especially so if you don't have elite status to get those earn multipliers. This will also have a big affect on U.S. based members since Air Canada was always undercutting the competition on flights from the U.S. to Asia and Europe (connecting via Canada of course)

Overall Redemption rates
Overall it does appear that members will be spending more on award flight redemption. We know this is true for partner airlines since those are published rates and the majority of those have gone in cost. 

Stopover fee
The new 5,000 point fee for adding a stopover on a rewards ticket makes those options a bit more expensive now.

No Stopovers on North America reward itineraries
The new program won't let you have stopovers on travel within Canada or the U.S.. You can only stopover in Canadian or U.S. if you are travelling to an international destination.

Increased annual fees for credit card holders
The mainstay and premium Aeroplan credit cards are going to cost more however you do get more benefits. That being said, there are consumers who don't need all those extras but are keen on the points earning ability of those cards so they will end up paying more.

The Ugly

Redemptions on no fee partner airlines
This is a combination of the new redemption amounts being levied by Aeroplan for their partner airlines along with the $39 booking fee and is in regards to those airlines who didn't charge or charged very little carrier or fuel surcharges in the first place. These are your airlines like SWISS, EVA Air, EgyptAir and so on.

Some redemption rates
Some award redemption options will be jumping significantly in the new program and those are just ugly. Since the award chart is distance based we see some big jumps in price for the longer flights within the new travel zones. Cross country award flights like Vancouver to St. John's become significantly more expensive in terms of the number of points required and many of the longer haul flights to the Atlantic and Pacific zones.

Loss of IKK for Super Elites
The consensus on this seems split - some Super Elites are excited about the new 50% off Priority Rewards while others at mad at the loss of the famous IKK benefit. This was the exclusive benefit for Super Elites which gave them access to many more reward seats at classic flight pricing. Super Elites could use this for up to ten reservations per year whereas the new 50% off Priority Rewards are capped at 11 per year but you don't get them all at once - you have to earn them by reaching various SQD levels.

Summary

As you can see there are definitely a lot more 'good' than 'bad' or 'ugly' and ultimately it comes down to each individual member and their earning and redeeming habits as to whether the new Aeroplan program is good, bad or ugly for them. For some even the bad and ugly will outweigh the good and for others it will be the opposite. Regardless of how you feel in the grand scheme of things (and a lot of you are looking at it as bad or ugly) you do have to look at this new program from the big picture. That is, look at Aeroplan as a whole and Canada as a whole. Not from the perspective of a points & miles maximizer, not a credit card churner, but from two other perspectives - the frequent flyer and the everyday average Canadian. That's who Air Canada really focused on for this program. How do we make it better for those who generate revenue flying on Air Canada (the frequent flyer) and those who generate revenue for the loyalty program (the everyday Canadian spending money on their Aeroplan credit cards and earning miles via non-travel partners). Look at what the new program encourages - bringing people back to Air Canada by eliminating surcharges on Air Canada and providing first bag free benefits, by making Aeroplan an attractive program with family pooling and points+cash options for those who don't earn enough points on their own and even opening up elite earning options via credit cards and overall points earning and you can clearly see the path this program wants to take. Support the frequent flyer and support the everyday Canadian who may travel several times per year or only once every few years.

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