A hybrid redemption program
Today, Aeroplan operates with a fixed flight rewards chart based on the destination.
This is what we find through fixed mileage flight rewards.
But there are also market fare flight rewards that only apply to Air Canada-operated flights.
With these Market fare flight rewards, you can access to more flights, with a price matching the cash market.
These Market fare flight rewards may require more miles than fixed flight rewards, or fewer miles depending on the time of year.
Air Canada is now expected to operate a hybrid system with its new program in 2020.
Market fare flight rewards for the majority of flight rewards
Today, most of the flight rewards booked on Aeroplan are:
- Economy class flights
- In North America
- To Hawaii
- To the Caribbean
With the new Aeroplan program, all these flight rewards will be accessible through a variable fare, depending on the market.
That is the equivalent of Market fare flight rewards we know today.
For example, a round-trip ticket to North America could no longer cost 25,000 Aeroplan miles, but 21,254 – 32,470 – 41,890 – 55,352 Aeroplan miles in the future! So it will be a fare matching public price of the ticket.
However, according to Mark Nasr, there will be a cap on the number of miles required for a ticket. That way, there will be always an interest in redeeming miles.
But the sweet spot could be somewhere else.
Fixed mileage flight rewards for long-haul and on Star Alliance partners flights
Outside of North America, Hawaii and the Caribbean, Air Canada would keep a fixed rewards chart:
- for long-haul flights operated by Air Canada
- “partner” flights, i.e. Star Alliance airlines (or even other airline partners)
Indeed, the business model is totally different between:
- tickets sold by Air Canada
- tickets made available by Star Alliance airlines to their partners
Companies are willing to offer great discounted fares to their partners in order to fill their aircraft, especially in business class or First Class.
So we could hope that the future sweet spots of Air Canada / Aeroplan are long-haul flights and partner flights!
More partners for earning miles
Until its acquisition by Air Canada, Aeroplan was operated on its own. It gradually moved away from its primary role: being an airline loyalty program.
For example, right now, we have 2 programs offering 2 different types of status:
- Altitude:for Air Canada frequent flyers
- Aeroplan:for travel on Air Canada or Star Alliance airlines, as well as for everything else (eStore, affiliated credit cards, partner shops…)
Following Air Canada’s takeover of Aeroplan, according to Mark Nasr, many of the airline’s departments want access to the loyalty program to do actions they were unable to do before.
Mark Nasr therefore insists that the future loyalty program will indeed be an Air Canada-oriented program.
For example, Mark Nasr wants much deeper relationships with program partners, not only for the earning and redemption sides but also for elite status as well.
Credit cards issuers
Air Canada’s takeover of Aeroplan was made possible by the support of Air Canada’s financial partners:
- TD(which was the largest contributor investing more than $1 billion in the transaction)
American Express also entered into an agreement with Air Canada to issue credit cards with a new 10-year agreement.
From what we can see from the recent credit card offers:
- CIBC and TD are focusing on mainstream cards
- American Express has focused on high-end passengers/ frequent flyers cards
According to PaxEx.aero, it is therefore not difficult to imagine co-branded credit cards with elite status earning potential.
A status with a real value on Air Canada, unlike today with current Aeroplan credit card options.
In the United States, it is not uncommon to see this type of credit cards In Canada, WestJet offer this with its cards RBC co-branded cards.
But beyond credit cards issuers, it will be imperative for Air Canada to sign new partner, part of the everyday life of Canadians:
- grocery store
- gas station
And on this side, there is a LOT of work: in recent years, Aeroplan has lost its partnerships with Esso and Uniprix. However, great partnerships have been made possible thanks to the Aeroplan eStore with big names like Amazon or Apple.
So let’s hope that Air Canada can convince big banners to join the future program.
An up-to-date technology
In October 2017,Air Canada had chosen to fully incorporate Amadeus Altea suite for reservations, inventory and departure control management.
All this has been done to improve the customer experience and above all to have a better integration with its code-share and Star Alliance partners (more than 2/3 are already integrated with Altea).
In terms of flight rewards this means a complete overhaul of the technology to make it easier to display the tickets’ inventory from a customer perspective.
That’s why we’ve recently seen changes in the possibilities for multi-city flights (and the “mini-RTW”).
Very soon, and well before the launch of the new program in 2020,Air Canada will offer a new version of Aeroplan mobile application (and possibly its website). Most of the features of the new program will be hidden, but the base will be there.
The idea is to offer a tool that is easy to use from a customer perspective, but allows advanced flights booking.
Today, for example, Aeroplan can only get 3 flights through the advanced multi-city search. Maybe in 2020, Aeroplan will go further!
Providing more freedom for its customers would allow Air Canada to ease the congestion of Aeroplan’s telephone customer service.
Through Mark Nasr voice, Air Canada provides some details on what to expect from its future loyalty program.
It is clear that at this time, Air Canada wishes to reassure its customers to avoid a mileage redemption run BEFORE the release of its new program.
But the disappearance of a fixed rewards chart for North America, Hawaii or the Caribbean appears to me to be a significant devaluation of the program. Today, it is possible to build an itinerary like Montreal – San Francisco – Los Angeles – Montreal for only 25,000 Aeroplan miles and $200 in fees.
What will happen tomorrow?
On the other hand, holding a fixed rewards chart for long-haul flights and especially for flights on Star Alliance partners is good news for those who like to redeem their Aeroplan miles for this purpose.
We will still have to see what’s inside this new reward chart! Will it still be possible to redeem 155,000 Aeroplan miles for a business class ticket to Asia with a stop in Europe?
We will have that answer in 2020.