Saturday, November 7, 2020

The new CIBC Aeroplan® Visa Infinite* Card offer is 10,000 Bonus Aeroplan Points and a buddy pass for travel in North America including Hawaii & Mexico

The last set of cards we look at early this morning (or late at night for those out West like us) are the CIBC Aeroplan cards. We start with their mainstay card - the CIBC Aeroplan® Visa Infinite* Card which is CIBC's equivalent card to the TD® Aeroplan® Visa Infinite* Card and replaces the venerable CIBC Aerogold Visa Infinite Card. 

 Recommended reading:

And links to the other consumer card offers revealed today:

The Welcome Bonus

The limited time welcome bonus revealed today for the new CIBC Aeroplan® Visa Infinite* Card is the virtually the same as the TD Aeroplan Visa Infinite Card although CIBC goes a touch further on the annual fee rebate. There are three parts to this card's welcome offer: bonus points, a companion pass and an annual fee rebate. All of which are awarded for new applications and approvals made from today through to January 31, 2021. Like I mentioned in the post for the TD card this offer took us a bit by surprise. Why so? Well we thought they would come out guns a-blazing with an explosive amazing offer that would blow our minds and the competition away! Really you are launching your new highly touted program and it should be something over the top. Have they done that? Not really. Yes there is potential to have this welcome bonus provide some amazing value but it is limited to those who don't travel alone and for those who know they will travel by January 2022 and will want to do so in economy class with a companion. To explain this better let's look at the welcome offer:
  1. Welcome bonus of 10,000 points after your first purchase
  2. Earn an Air Canada Buddy Pass to bring anyone along to anywhere Air Canada flies in North America, including Hawaii and Mexico. ​
  3. Annual fee rebate for Primary and up to 3 Authorized Users

First you see your standard welcome bonus points offer which is the lowest we have seen on the primary Aeroplan card for as long as we can remember - prior to this the lowest bonus was usually 15,000 miles but without any other extras like buddy passes or annual fee waivers. I'm going to jump over number two and come back to that. The third part of the bonus is the rebate for the first year annual fee on the primary and up to 3 additional cards. This is the part where this card goes beyond TD's as TD only offers it on the primary card and the first additional however the TD does get the new year long Starbucks bonus.

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 $960 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 but is still a really good valuation of $410 for the welcome bonus in this card.

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 $1069 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!!

 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 changes to the card are very similar to the TD card. Like it's TD counterpart the primary card annual fee is being increased to $139 from $120 however this card's additional card fees will remain at $50 each. I suspect the main reason this card doesn't see the additional card increase is that it doesn't get the NEXUS benefit and doesn't see as many insurance benefit enhancements like the TD card.

The earn rates change slightly on the card, the card will now earn 1.5 Aeroplan points per dollar spent with Air Canada (any Air Canada purchase, prior to this it was only for purchases) It will continue to earn 1.5 Aeroplan points for grocery and gas station purchases but it does lose the 1.5 points for drug store purchases which will now categorize as all other purchases which all continue to earn 1 Aeroplan point per dollar spent on the card. 

Here are some of the new benefits for this card:

  • Preferred Pricing - Holders of these cards will receive discounts when redeeming miles for Aeroplan reward flights
  • First Checked Bag Free - Cardholders will receive their first checked bag free for themselves and up to 8 other travellers on the same reservation. This benefit works on both paid and award flights on Air Canada.
  • Elite Status Earning - These cards earn 1,000 SQM (Status Qualifying Miles) and 1 SQS (Status Qualifying Segment) for every $10,000 spent on the card(s)
  • New Mobile Device (up to $1,000)
  • Hotel Burglary (up to $2,500) 
  • enhanced Trip Cancellation (up to $1,500) insurance

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

I don't think the buddy pass is an ideal promotion to launch in the middle of a pandemic - case numbers are on the rise again, provinces and countries are starting to lock down again - it's just not ideal timing for something like this. Perhaps, and just perhaps Air Canada will provide extensions on these buddy passes should the pandemic situation not ease up in 6-8 months.  It's definitely a narrow group of people that this offer will appeal to.

Still, if you do you think you'll travel in the next 12-14 months and be doing that 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 CIBC Aeroplan® Visa Infinite* Card here

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