Aeroplan no more? Air Canada to launch own loyalty program

May 12, 2017, 12:21
Aeroplan no more? Air Canada to launch own loyalty program

The move will see the Star Alliance member take back control of its rewards scheme, which was spun out and then sold off to become a fully independent scheme by 2008 in order to help Air Canada through hard financial straits - a situation which echoed speculation in 2014 that Qantas might do the same thing during its own troubled times.

Air Canada noted members will still be able to collect and redeem Aeroplan miles until the new loyalty program launches.

Air Canada today announced its decision to launch its own loyalty program in 2020 upon the expiry of its commercial agreement with Aimia, the operator of Aeroplan.

The contract with Aimia will be in effect until June 29, 2020, and miles earned from Air Canada and Star Alliance flights will be credited to the new program after that, Air Canada said.

In a statement Air Canada said that "Effective June 30, 2020, Aeroplan will no longer be the loyalty programme for Air Canada".

What about Star Alliance?

The Montreal-based airline (TSX:AC) says it's aiming to strengthen its relationships with customers in making the switch. All Million Mile program qualification activity and status will also be honoured in the new program. It was spun off as an independent business, now called Aimia Inc., which has expanded its customer base and evolved its services over the years. After the transfer, consumers can use the points for travel on Air Canada or any Star Alliance airline.

Chapman added that Aeroplan may have to scramble to find a new strategy, as its offerings become more fractured without Air Canada as a major partner. Now that Air Canada is leaving the nest, Brar hopes that Aeroplan may sign up more retailers.

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The relationship has been confusing to customers, with many not understanding Aeroplan is part of a different company than Air Canada.

Aeroplan was originally Air Canada's in-house loyalty program.

"Doing the right thing for Air Canada's customers throughout this transition period will be our guiding principle", said Mr. Rovinescu. Air Canada intends to continue to offer Aimia redemption seats for Aeroplan members after June 2020, with pricing competitive with other third-party rewards programs.

"We are very confident we'll have alternative ways for members to use their miles", said Aimia's group chief executive, David Johnston.

Dvorkin also isn't convinced that in 2020 he won't be able to combine his Aeroplan miles with miles earned by flying Air Canada.

He added that with five million active members buying up around $700 million worth of airline seats every year, it shouldn't be hard for Aeroplan to make new friends. The contracts with TD and CIBC expire in 2024, while the American Express contract expires in 2018.

He said the majority of Aeroplan members earn points not through flying but rather shopping while using those affiliated cards.

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