Earlier this year I appeared on CBC’s Cost of Living program discussing the value of Aeroplan points after a listener reached out to them questioning what a point is worth. This has always been a topic worthy of discussion and one that is extremely subjective as the value of points, primarily those from frequent flyer and frequent guest programs, vary greatly from person to person, day to day, award to award and so on! And in the case of Aeroplan, it will even vary for a single flight award based on which ‘payment option’ you choose.
The background – why is the value so low?
The listener for the CBC program was wondering why they couldn’t find the 1.5 to 2 cents per point of value they had seen from their Google searches as the reward flights they were looking at between Calgary and Toronto were coming in at under 0.6 cents per point of value!
I signed up for the TD aeroplan rewards credit card thinking that Aeroplan points were worth 1.5-2 cents per point according to basic google searches and Air Canada’s chart https://www.aircanada.com/content/dam/aircanada/loyalty-content/documents/flight-rewards-chart-en.pdf. I’ve had my aeroplan credit card since March and have accumulated 52,000 points. I decided I would use my points to book some flights for 2 adults from Calgary to Toronto. At $0.015/ point I assumed I had ~$780 worth in points.I started to book with points and noticed it was 42,000 points + $749.10 for two people from Calgary to Toronto. The same flights without points were worth $986.82. So essentially 42,000 aeroplan points are worth $237.72 or 1 point = $0.00566. At this point I’m asking myself why I switched from my cash back card to Aeroplan points.
A couple of noticeable issues arose when I looked into this after being contacted by the CBC. First, these were last minute flights for the Labour Day long weekend which are inherently more expensive to begin with in terms of paying cash and as Aeroplan pricing for flights on Air Canada are dynamic they follow the cash prices. Dynamic pricing is rarely ever a ‘win’ when it comes to travelling during a busy time like Labour Day, Christmas, Spring Break etc.
The second issue arose from not selecting the best Aeroplan flight award pricing option. Aeroplan presents multiple options to choose from, with only one of those providing the maximum value for your points. The listener was looking at Aeroplan’s “Popular” option which in fact, is not the option that provides the best per point value for flight awards. It is this second issue of selecting the correct option that is the crux of this loyalty lesson.
Selecting the correct Aeroplan award flight payment option to maximize value
When you search for award flights on the Air Canada website they will present the flights that are available with what we will call their ‘standard’ award points pricing. While Air Canada does not have a name for it, we’ll use ‘standard’ as that seems to make the most sense since it is this pricing that forms the basis of Aeroplan’s published reward charts.
Once you select a flight, in this example we’ll go with the 6am departure, Air Canada will present you with four payment options:
In a nutshell these options are Aeroplan’s version of ‘Cash+Points’ or ‘Cash+Miles” that has become prevalent in many loyalty programs. It is great that Aeroplan provides these multiple options as members who may not have enough points for a ‘standard’ award are still able to redeem them to partially pay for a flight instead of a full cash outlay.
However, it is these other options where the value of Aeroplan points are eroded. If value does not matter to you then by all means these options are great to have but for some people, just like the CBC listener, it can raise the issue as to whether there is value in Aeroplan versus other travel programs or cash back rewards.
If you are the latter then it is good to know which award flight option you should be choosing to maximize the value of your points for that particular redemption. And the best value is the ‘standard option’ which unfortunately Aeroplan does not specify on the payment selection page. Day in and day out I have heard from our own readers and read story after story on sites like Reddit where members question the value of their points because they have ultimately not selected the ‘standard’ option which provides the best points value.
As you can see the ‘standard’ option is the third from the left and surprisingly it is not marketed as the ‘Popular’ option. I have always found the second option marketed as ‘Popular’ and I do feel Aeroplan should make some sort of notification of the more valuable ‘standard’ option, especially as the initial search results are based upon these.
However, from the program’s point of view I understand why they don’t. If they did it would affect their bottom line. If they can drive more members to use the popular option it works in the favour of the airline as it increases cash flow and their liability per point for accounting purposes is lower.
Speaking of the search results page and then the payment page, there’s a whole different story in that as I can’t count how many times I’ve heard from people saying the search results show a certain amount of points and fees but then the points and fees requirement ends up being different on the next screen due to the fact the ‘popular” option was selected. Personally I feel this is a part of the user experience Aeroplan needs to improve upon.
For hardcore points and miles enthusiasts this is a non-issue as they most likely know all of this – but think of someone like your grandma and in reality, the majority of Canadians who are not entrenched in points and miles like we are in our little community. Just like them, chances are you would pick the ‘popular’ option because well, why shouldn’t you? If it is popular that must mean it’s good right?
Comparison of value across the options
Continuing with our example from above, that exact one way flight from Calgary to Toronto has a cash price of $408.58.
We can use this to determine the value of the four payment options that Air Canada presents for an Aeroplan redemption:
Option 1:
For option 1 you can redeem 15,100 points and pay $248.95 for our flight example. If we subtract the cash amount of $248.95 from the total price of the flight of $408.58 you end up with $159.63 of the flight being covered by the 15,600 points. This works out to roughly 1 cent per point in value.
Option 2:
For option 2 you can redeem 20,800 points and pay $147.54 for our flight example. If we subtract the cash amount of $147.54 from the total price of the flight of $408.58 you end up with $261.04 of the flight being covered by the 20,800 points. This works out to ~1.25 cents per point in value.
Option 3:
For option 3 (the ‘standard’ option) you can redeem 26,100 points and pay $44.23 for our flight example. If we subtract the cash amount of $44.23 from the total price of the flight of $408.58 you end up with $364.35 of the flight being covered by the 26,100 points. This works out to ~1.4 cents per point in value.
Option 4:
For option 4 you can redeem 30,523 points with no cash outlay for our $408.58 flight example. This works out to ~1.34 cents per point in value.
As you can see from the examples of all four options, the ‘standard’ or Option 3 provides the best value per Aeroplan point. In this example it provides roughly 12% better value for your points than the popular option! No matter what awards you are searching for and booking with Aeroplan, Option 3 or ‘standard’ will always provide the most value.
Wrapping it up
For the CBC listener, there were a couple of issues that arose which really drove down the potential value of their Aeroplan points and in reality there was nothing that could be done to bring the value up to our benchmark of 1.5 cents or the higher values found on other sites. However, they would have found slightly more value (around 0.7 cents) had they selected the best payment option. Same goes for the countless stories I have seen on Reddit, Red Flag Deals and from our own readers – if they knew what payment option to select perhaps the value of their points wouldn’t have looked as bad as they initially thought.
In the grand scheme of things there is more to maximizing value than just selecting the right payment option with Aeroplan. Being flexible with the dates and time of travel, selecting one stop over non stop, flying into one city and back from another, partner airline flights and of course class of service all play a part in maximizing the value of your Aeroplan points. But even when you take into account all of those factors, you still need to make sure you choose the best or ‘standard’ Aeroplan points payment option to get the absolute maximum value for that particular award.
In the end, as long as you have enough points, make sure you select Option 3 when you are booking your Aeroplan award flights!
Speaking of cents per point, cents per mile, and valuing loyalty program currencies in that regard – keep an eye out for an upcoming Loyalty Lesson we are preparing that will take a deep dive into this often controversial topic!
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All images via Aeroplan