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Tuesday, August 11, 2020

The new Air Canada Aeroplan program revealed - it all goes live on November 8!

 

It’s hard to believe it has been three years now since Air Canada announced they weren’t going to renew their partnership with Aeroplan, which at the time was owned by Aimia and were set to create their own brand new frequent flyer program. Without going into all the nitty gritty of what transpired (if you are interested in the complete background check out The Air Canada Aeroplan Saga - All the resources you need) over the span of a many months  after that Air Canada along with TD, CIBC and Visa ended up buying Aeroplan from Aimia but they still promised a new program by July 2020. Now with three years of behind the scenes work the program is here. The majority of the details of the program have been revealed today and it will officially launch on November 8. It’s still called Aeroplan but with a new logo to better match its ownership by Air Canada and it really is, for the most part, a new loyalty program. As an Aeroplan employee told us, “this isn’t putting lipstick on a pig.” They really wanted to revamp the program in almost all respects and they have lived up to that promise.

For some more info here are further articles on the new Aeroplan program:


It starts with a new logo and look for Aeroplan. You can see the logo at the top of this post and you’ll notice the ‘E’ is made up of the three stylized boxes which are taken from Air Canada’s new livery where they have the cockpit of each airplane painted in that same black shape. And of course the famous Air Canada Roundel has been added to provide the direct link to Air Canada.

 

Here's what the new Aeroplan membership cards will look like:

 

You'll also notice in the new program that the primary Aeroplan currency are no longer called miles - they will be called Aeroplan points. Your current Aeroplan miles will convert to the new Aeroplan points on a 1 to 1 basis. For Elite Status they will still call them Elite Qualifying Miles in terms of those miles required to achieve status.

 There is a lot to read in this post and if you aren't up for reading the entire thing here are the main take away points of the new program:

  • No more carrier/fuel surcharges - the most you'll pay is a $39 booking fee for travel on partner airlines. Fly on Air Canada and there are none of those dreaded airline surcharges.
  • 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
  • An enhanced elite program - New benefits like Priority Rewards, Status Pass (share status benefits), additional elite qualifying miles and dollars earning options and more.
  • Points earned on flights based on spend -  When you fly on Air Canada the points you earn will be based on what you spend on your base airfare. It will no longer be distanced based
  • Dynamic Reward pricing on Air Canada - No more set reward pricing for flights on Air Canada and while overall reward flights should be cheaper some may not like the fact that some rewards may be more expensive
  • You now have to pay for stopovers - if you want to have a stopover on your Aeroplan reward flight it will cost you 5,000 points per stopover
  • Credit Card Enhancements - 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.

And now what everyone is waiting for here are all the details of the new program:

Flight Rewards

This is the part of the program most members have been concerned about. All across the internet and social media a major devaluation was expected on this front. In fact, that hasn’t happened. Air Canada wanted members to still get a lot of value out of the program and for the most part, members will get more value now. How so? They got rid of the biggest thorn in everyone’s sides. Those dreaded carrier surcharges when flying on Air Canada and even partner airlines. Yes that’s right, no longer will a 60,000 mile round trip reward ticket on Air Canada to Europe come with $600 to $800 in fees. If that flight is on Air Canada it will have no carrier surcharges and if it is on a partner airline there is simply a $39 booking fee. Yes those Lufthansa awards will now only have a $39 fee instead of three to four figure surcharges! This even brings more savings in as those fees had GST/HST charged on them and now since there are no fees on Air Canada flights they are reported as a true $0 flight to other authorities like the U.S., so there are actually less taxes paid from the U.S. side.

Now you are probably asking that there must be some sort of trade off. And there is. If you are redeeming points for flight on Air Canada there will no longer be a published reward chart. No more Classic Flight and Market Fare Rewards. Now it’s just a dynamic range of pricing for reward flights on Air Canada. Flight rewards will become distance based within and to/from various travel zones as follows (click on the images to see them bigger):

All points amounts are for one way travel











When you go to book a flight online for Air Canada only travel you’ll be presented with a realistic range of points required for a flight reward. Most will be at or near what we were accustomed to with Classic Flight rewards. Some will be cheaper, some will be more expensive but 80% of the flight rewards should fall into the range that Air Canada presents above. Just like the old Market Fare rewards you can book every seat available on Air Canada in any cabins with points and thanks to their new back end system flight rewards can be booked right on aircanada.com or the Air Canada app. No more having to go to two separate websites to compare flight rewards and cash flights. 

Overall most reward flights on Air Canada are now cheaper in the new program when you take into account an increase in points combined with a decrease in the extra fees you used to pay for. Executives from Aeroplan showed me a few examples where you may be redeeming $200 more in points for a flight but were saving $800 in fees. There were also other examples where both the points redeemed and fees paid were lower than they are in the current program. 

I wanted to take a quick look for myself and based on the new reward charts a one way economy class ticket between Toronto and London will run 35,000 to 60,000 points (so 70,000 to 120,000 roundtrip) versus 30,000 right now for Classic Flight rewards (60,000 round trip) and sometimes a heck of a lot more for Market Fare Rewards. If we take that round trip classic flight between Toronto and London right now you it would run you 60,000 Aeroplan Miles and $735.33 in fees. The same flight new program would likely be 70,000 points and about $204 in taxes. So you would be spending 10,000 more points (worth a minimum of 1.2 cents or $120 but could be higher depending on what you personally value each point at) but saving over $530 in fees.

So while it is dynamic in most cases when you look at the big picture rewards should actually come out cheaper. And to see what you may have to spend dynamically Aeroplan has a point predictor tool to help out that will show you the range of points you could expect to redeem for a flight.

Aeroplan will retain a flight reward chart for rewards on partner airlines and the good news is they are going to bring in even more airline partners both domestically and internationally! And we’ve already mentioned the best news, no longer will there be fuel or carrier surcharges You will only pay that $39 booking fee!

Stopovers
One benefit that Aeroplan has been greatly heralded for over the years was the category of stopovers. That is, the ability to stop over in a city on an award ticket to your final destination - and Aeroplan used to allow you to do it twice each direction or by having one stopover and one open jaw until they changed their back end systems and had to limit it to one of either as of September 2019.  In the new program you can book one stop over per direction, that is for every one way/single bound itinerary you can have one stop over. So if you book a simple round trip you can have two stopovers. Book three one way trips and you can have three stopovers and so on! It is however limited by the maximum number of segments you can book on a PNR and that 12 for any reward that includes Air Canada or a combination of Air Canada and a partner airlines.

But here's the catch to the new program's stopover rules - you have to pay 5,000 points for each stopover. Hypothetically speaking, if you redeem 120,000 points for a round trip flight but choose to add in one stop over that reward will cost you 125,000 points, two stopovers and you're paying 130,000 points. 

Finally one more change to stopover rules - you can no longer book stopovers on reward flights within the Canada or U.S.. That is if you are flying from Toronto to Los Angeles you can't have a stopover in Denver. However you can stopover in Canada or the U.S. if you end destination is outside of Canada and the U.S. For example going from Calgary to Hong Kong via Los Angeles will allow for a stopover in Los Angeles.

Award pricing discounts
The dynamic flight reward pricing for travel on Air Canada has discounted pricing available. How so? By having Aeroplan Elite Status and/or an Aeroplan credit card you can get preferred pricing. The points required for flight rewards may be discounted by a certain amount if you have one or the other. Have both and your discount is even bigger as you can avail of the discount from both!

Points plus Cash
When you go to redeem points for a flight reward you'll be presented with several options. You can choose to pay for the entire reward of base points plus taxes and fees with miles (they have this option now but they have made the points for taxes part much more affordable) you can pay the old school way of points for the base flight and cash for taxes and fees but now they will also provide several options where you can redeem less points and some cash to cover the base fare. This is similar to what we have seen with many hotel programs and even some airline programs that give you this option. This is a good method to use if you don't have enough points for a reward but still want to use them to bring down the cash portion of a flight.

Other rewards
You'll continue to be able to redeem Aeroplan points for non-flight rewards including hotels, car rentals, Air Canada Vacations packages, gift cards (soon to be electronic only so you'll get them right away!), merchandise (the catalog is being expanded greatly thanks to partnerships with new retailers) and more.

Earning Aeroplan Points

The one thing many Aeroplan members were predicting is that Aeroplan would move to earning points on flights based on spend rather than distance flown. And this seems to be the case come later in 2021. While Aeroplan right now is kind of a hybrid revenue earn model whereby the lowest fare classes earn less or no points and higher classes earn more, it is still based as a percentage of the mileage flown. This appears to be going away sometime next year and likely we'll be earning a set amount of miles per dollar spend on base airfare:

  • Basic fares will earn 2x the base dollar amount spent as points
  • All other fares will earn 3x the base dollar amount spent as points

Although you will begin to earn points on all fare classes the amount you earn will really depend on your spend and your elite status. Buy a cheap flight to Europe or Asia with no status and I forsee lower points earning but buy an expensive ticket with status and you'll likely earn more points. This is truly indicative of revenue based earn system where those who can spend more earn more.

All other earn methods remain such as credit card partners, hotels, car rentals, online shopping etc. Aeroplan has also stated they will be adding even more non-flight partners but do not consider themselves a coalition program anymore like their competitor AIR MILES

Aeroplan Family Sharing

Several frequent flyer programs around the world have a family option for their programs where members of the same family or household can share and combine points for awards. That’s where Air Canada Aeroplan’s Family Sharing comes in. Each family sharing account can have up 8 members and all the points earned can be shared (pooled) so that it is easier to reach potential rewards sooner. Members can redeem for rewards from their shared balance and if one of the members of the Family Sharing Account has status and/or an Aeroplan co-brand credit cards all members in the the group will benefit from the preferred pricing when redeeming for rewards. All members in the Family Sharing group will retain their own Aeroplan number and keep the miles they earn under that number. It’s only at redemption time when miles may be pulled from various accounts. This allows for family members to leave a group should they want and take their miles with them. Personally that will probably be the case in my family in the near future as the Rewards Canada kids are almost adults and if and when they go out on their own they may not want to pool anymore.

Points Expiration

As was already announced in July Aeroplan Points will now expire after 18 months of inactivity instead of 12 months. That additional 6 months should be enough for most to make sure they earn or redeem at least 1 mile to keep their account going. Plus if your account does become inactive you can have your lost point reinstated if you fly with Air Canada within 6 months or get yourself an Aeroplan credit card.

Change and cancellations

Now that Aeroplan is owned by Air Canada there aren’t problems of integration between two companies like before which means Aeroplan award tickets now follow Air Canada revenue tickets more closely. For example if you cancel an Aeroplan flight within 24 hours of booking you can do so with no charge which is the same as an Air Canada revenue ticket. After 24 hours and up to 2 hours prior to departure you can cancel or change any flight reward albeit a fee will apply. Good news you’ll get a full refund of all your points and all taxes, fees and surcharges.


Elite Status

Prior to Aeroplan being taken back by Air Canada there were two elite programs. Air Canada Alititude and Aeroplan Elite Status. Now there will just be one elite program, Aeroplan Elite which retains most of what Altitude was. Gone is the name Prestige, it will now be Elite 25K, 35K, 50K, 75K and Super Elite . Status members will get some new benefits, the ability to retain status easier and be able to share many benefits with friends and family. The first new benefit is Priority Rewards. These are a voucher that provide a 50% discount on the base points required for a flight rewards and members can earn up to 11 of these vouchers each year.

Each Priority Reward Voucher is earned based on the elite member's Status Qualifying Dollars (SQD) and their elite status each time they reach an SQD level. Vouchers are earned when members reach the 4,000, 7,000, 10,000 and 15,000 SQD thresholds and then for every 5,000 SQD after that up to 50,000 SQD. Vouchers are valid for one year after issue and can be used as follows based on your elite level:

  • 25K - Voucher can be used for Canada / US Economy
  • 35K - Voucher can be used for Canada / US Economy
  • 50K - Voucher can be used for North America up to Premium Economy
  • 75K - Voucher can be used Worldwide up to Premium Economy
  • Super Elite - Voucher can be used Worldwide up to Signature/Business Class

Members who are 35K or higher as of November 8 will automatically receive Priority Rewards.

The next new elite benefit is Status Pass. Any member who is 50K or higher will have the option to select Status Pass as one of their Select Benefits as of March 2021. What is Status Pass? It's essentially a sharing of elite status benefits to family, friends and colleagues and they don't even have to be travelling with you.

Here is what those travelling on a Status Pass will receive:

  • Priority Check-In
  • 3 Complimentary Checked Bags, with Priority Baggage Handling
  • Priority Security Clearance
  • Maple Leaf Lounge Access
  • Priority Airport Standby
  • Priority Boarding

Looking to qualify for Elite Status? It can now be done without even flying! This is Air Canada's olive branch to those members who got elite status in the old Aeroplan program (not Air Canada Altitude) by shopping lots, using credit cards a lot etc.  If you earn 100,000 points through eligible transactions in a qualifying year you'll receive Aeroplan 25K status that is valid through the following year. Note that transfer from hotel programs and programs like American Express' Membership Rewards do not count towards those eligible points.

Aeroplan co-brand credit cards will also help you to achieve status as you can earn status qualifying miles and status qualifying dollars just by spending on eligible cards. Some eligible cards will also allow you to rollover unused SQM (whatever is left over your highest qualification level) and eUpgrades to the next year. Finally if you have an eligible card you'll get higher priority at the airport. What this means is that if you are waiting for an upgrade and it comes down to two 50K elites for that last business class seat and only one of them have an Aeroplan credit card, it will be that cardholder who gets that last upgrade!

Credit Cards


As we already mentioned one of the big new benefits of having an Aeroplan credit card is lower pricing on the number of points required for flight rewards on Air Canada. On top of that any flight benefits the cards have will now apply to all Air Canada flights whether you book with points or cash. Prior to this most were only available on Aeroplan award flights.  And watch out WestJet, the Aeroplan cards now carry similar benefits to your credit card. Cards like the TD Aeroplan Visa Infinite card and American Express Aeroplan Card (and higher cards) will give you your first bag free on Air Canada flights for you and up to 8 people on the same reservation! 

Then if you get yourself a Visa Infinite Privilege Card or top end American Express Reserve card they will offer a companion fare as well, albeit you need to hit a spend level of $25,000 and not just have the card like WestJet’s. However the Air Canada companion fare is good for anywhere Air Canada flies globally so it does give you a lot more destinations to choose from. The voucher will operate similar to WestJet's with where the companion will pay $99 and up (plus taxes, fees, charges, and surcharges) depending on where the flight is to. The benefits don't stop there, Infinite Privilege and Reserve cardholders( both Primary and Additional) will now receive complimentary access to Maple Leaf Lounges and Air Canada Cafés in North America and they can each bring one guest.

TD has also added Hotel/Motel Burglary Insurance and Mobile Device Insurance on all their Aeroplan cards  and NEXUS+ application fee reimbursement of up to $100 for the Primary Cardholder and Additional Cardholders for the Infinite and Infinite Privilege cards.

Cards will also have an elite status component whereby there will be improved status benefits with select co-brand credit cards as mentioned above from rollover SQM to additional SQM and SQD based on spend. The top end cards will let you rollover any unused SQM to the next year as well as give you 1,000 SQM and 1 SQS for every $5,000 in card spending. While the cards lower on the tier (Visa Infinite and Amex Platinum) will earn 1,000 SQM and 1 SQS for every $10,000 in card spending.

And there you have it! A very long and broad overview of the new Aeroplan program! Overall I'm very impressed with what they have done. In my virtual meeting with their executives last week you could hear the excitement from all of them as they feel this isn't a devaluation to the program being glossed over by several enhancements like we typically see. It is a definitely a rebirth of the program and you can tell they really wanted to keep the program valuable, relevant and rewarding to full gamut of Aeroplan members from Super Elite members to the member who only earns a few hundred miles here and there. I truly believe they have achieved this. Yes there are some drawbacks, that's a given and was to be expected but for the most part the program will be better for the entire membership base of 5+ million members whether you are frequent flyer, a frequent buyer or a seldom user - there is something for everyone. 

Click here to learn more about the program on Air Canada's site!

What do you the Rewards Canada community think about today's news? Let us know in the comment section below!

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