Saturday, November 7, 2020

The new American Express® Aeroplan®* Card offer is up to 20,000 Bonus Aeroplan Points and a buddy pass for travel in North America including Hawaii & Mexico


Here we are jumping right into second post of the night with coverage what would be considered Air Canada Aeroplan's mainstay American Express card - the American Express® Aeroplan®* Card

 Recommended reading:

The Welcome Bonus

The limited time welcome bonus revealed today for the new American Express® Aeroplan®* Card is very similar to that of the TD Aeroplan Visa Infinite card however instead of an annual fee waiver it provides more points. The total points you can earn ranges from 15,000 to 20,000 and is broken down as follows:  
  1. Welcome bonus of up to 10,000 points consisting of 9,000 Welcome Bonus points with $1,500 in spend and 1,000 points/month with $500 spend monthly in the first six months
  2. Earn an Air Canada Buddy Pass to bring anyone along to anywhere Air Canada flies in North America, including Hawaii and Mexico. ​
  3. Those who joined the waitlist are eligible to earn an extra 5,000 bonus Aeroplan points upon approval, for a total of up to 20,000 points.

First you see your standard welcome bonus points offer which is the lower than what was featured on this card's predecessor the American Express AeroplanPlus Gold card. However you do have that buddy pass now.

The Air Canada Buddy Pass is a companion pass that you can use to get a $0 base fare on any Air Canada, Air Canada Express or Air Canada Rouge flight in North America including Hawaii and Mexico. You receive the pass once you spend $1,000 on the card within 90 days of opening your account. The buddy pass is good for travel in economy class (in any economy class - Standard, Flex, Comfort, or Latitude​) so when you buy a ticket you can redeem the pass to have someone fly with you and you only have to pay the taxes and fees on that second ticket. The pass is valid for 12 months from date of issuance. This is where the potential big value comes in, if you are planning on traveling in North America, to Hawaii or Mexico and will be traveling with at least one companion you can enjoy some big savings, especially so if you buy the higher end economy class fare levels and as the buddy pass has no black out date it can be used during peak season albeit peak season in 2021 won't be anything like pre-COVID times. 

Here are a few examples of using the Buddy Pass for travel in early 2021:

Vancouver-Toronto  February 2021

The base fare is $840 per adult for the highest Economy Fare Class (Comfort) which means the buddy pass will save you $840! Combine this with our minimum valuation of Aeroplan points at 1.2 cents each and the welcome bonus for this card becomes $900 in value. If you chose to go with the lowest Economy Class fare (Standard) the base fare is $290 per adult so the value of the buddy pass drops but is still a really good valuation of $350 for the welcome bonus in this card.*
* The valuations here do not take into account the extra points awarded from the wait list bonus

Toronto-Honolulu March 2021


The base fare is $949 per adult for the highest Economy Fare Class (Comfort) which means the buddy pass will save you $949! Combine this with our minimum valuation of Aeroplan points at 1.2 cents each and the welcome bonus for this card becomes $1049 in value. If you chose to go even higher and purchase a Latitude fare on this same flight the base fare is $1633 per adult so the value of the buddy pass is huge at $1633!!*

* The valuations here do not take into account the extra points awarded from the wait list bonus

 That is a huge value for those who do buy Latitude fares but for most Canadians I think the buddy pass will be mostly used on those Standard to Comfort fares.

For the most part I would value the Buddy Pass at no less than $100 based on redeeming it for some shorter competitive routes like Toronto-Montreal or Vancouver-Calgary. For example here's a really cheap fare between YYZ and YUL where the Buddy Pass would only be worth $112:

Basics of the new card 

The NEW American Express® Aeroplan®* Card, created using 70% reclaimed plastic as part of American Express' commitment to sustainability, will offer: 

  • 2X the points on eligible Air Canada and Air Canada Vacations purchases
  • 1.5X the points on eligible dining and food delivery in Canada
  • 1X the points on everything else
  • Air Canada Travel Benefits: including Free First Checked Bag, Status Qualification Boost and Preferred Pricing on flight rewards
  • Access to American Express Entertainment & Experiences: presale and reserved tickets through Front of the Line, insider access to events through Amex Experiences, and tailored perks and discounts through Amex Offers
  • A suite of travel related insurance coverages: including Flight and Baggage Delay Insurance and Lost or Stolen Baggage Insurance so Cardmembers have more confidence knowing you can be covered on eligible travels abroad
  • $120 annual fee on the primary card and two options for additional cards $50 annual fee card with full benefits or $0 annual fee card to earn points only

Why a buddy pass instead of more points?

There are several reasons why Air Canada is doing this and I do get why they have chosen to go this route. The first is breakage - this is a term loyalty programs love and it is where miles, points, vouchers, bonus gift cards or in this case buddy passes go unused and they expire. Hotel chains like Best Western are famous for this - they rather award limited time gift cards over points since the latter never expire. It allows loyalty companies an easy way to get rid of that debt. And here in Air Canada Aeroplan's case they know travel is severely curtailed right now and by not offering as many points as the welcome bonus and instead providing a buddy pass that has a concrete end date Air Canada is truly hoping a lot of them go unused. Even if the customer at the time of application has full intentions of travelling there is no guarantee they will be able to if more travel restrictions are put in place, the traveller becomes sick themselves and so on. So that's the first reason Air Canada has done this - it will cost them a lot less than issuing tons of points that people will hold onto for a couple of years. The second reason is to boost revenue. There are people who will travel who may not have before if they didn't have this buddy pass. So for Air Canada this means a boost in revenue - sure you are giving up two seats for the price of one but that's better than none. Planes aren't flying anywhere near capacity right now so if this buddy pass can entice someone to get out of their house to take a trip then they will do so on Air Canada instead of WestJet or any other airlines and that's a win for Air Canada. The third reason they have gone the buddy pass route is they want the cardholders to be able to experience the benefits that come with card such as the first bag free benefit.

Final thoughts

Just like it's compatriot card from TD I must say this welcome bonus is not what we were expecting and it will appeal to a smaller proportion of Canadians who are ready to travel. The airline and the loyalty programs know very well that many Canadians are not travelling right now and those who are considering are on the fence - they're 50-50 whether they will or not so they'll take a chance with this offer but if they end up on the no go side of the fence they lose the buddy pass and only end up with that 10,000 point bonus. Not an ideal welcome bonus. Then you have the solo traveler who has no need for a buddy pass and not a huge amount of value from those 10,000 points. That person would be better off getting a card like the HSBC World Elite Mastercard with its 100,000 point bonus which is worth $500 in travel and using that to book a flight on Air Canada (and earn you Aeroplan points for the flight while doing so). In my mind the ideal bonus would be 25,000 points with the buddy pass and the annual fee rebates and allow for the buddy pass to be used on Aeroplan economy class reward flights as well.

Still, if you do you travel with someone else and know you will be heading to a destination covered by the Buddy Pass then this is a good welcome bonus that can provide some really good value seeing that you aren't paying an annual fee in the first year. 

Learn more about and apply for the new American Express® Aeroplan®* Card offer here

No comments:

Post a Comment