Canadian travel spectrum was rife with speculation after the announcement of Air Canada’s new loyalty program (in June 2020) and with that a divorce from Aeroplan. The news sent the 5 million members of Aeroplan in a tizzy, wondering about future of their account balances. But I argue that Air Canada’s new loyalty program is a good thing.

Facts

  • Air Canada’s agreement with Aimia for Aeroplan remains in place until June 29, 2020.
  • Before the new Air Canada program launches in June 2020 members can earn and redeem Aeroplan Miles for Aeroplan Rewards, including flights with Air Canada and our Star Alliance partners.
  • All Air Canada and Star Alliance activity after June 2020 will be earned into the new program.
  • Aeroplan Miles earned up to June 2020 stay in Aeroplan accounts and may be redeemed for Aeroplan Rewards.
  • Beyond June 2020, Air Canada expects to continue making Air Canada flights available for Aeroplan redemption. Star Alliance partner rewards will only be available through the new Air Canada program.

Why Air Canada’s new loyalty program is a good thing

  • Air Canada has a huge cache of data and loyalty program experience/expectations build through its Aimia contract. In building a program from scratch, we can expect them to offer a compelling package for members to join in. A program that will capture the attention of its competitors and loyalty of its members. As per Air Canada, “a program that will best serve the long-term interests of customers, shareholders and employees”.
  • Anytime there is a new player in a market, they do their absolute best to lure new members with exclusive perks and swathes of incentives. In fact, in their press release Air Canada noted that the launch of new program would come with “enrolment bonuses and incentives for new members as well as existing Aeroplan members”. Yay us.
  • Other than actual “butt in seat” miles, the best way to earn large number of miles is through credit card bonuses and spends. Once the new program is ready to hit the road, we can expect that the new credit card partnerships would yield another wave to enrolment bonuses from the credit card companies as well.
  • I also expect Air Canada’s new program to offer direct status matches from other competitor programs. They could use this strategy aggresively to earn potential membership and loyalty from other alliance members and non-Canadian residents.
  • Currently, Air Canada does not allow its members to upgrade seats using their miles. With a new program and complete control over its management, I expect that Air Canada would open this option to its membership. Another perk that will position the new program well against their North American competition.
  • Most airline programs make large profits by selling their miles in bulk at subsidized rates, something Air Canada hasn’t dabbled much with its Aeroplan/Aimia partnership. I expect this to change going past June 2020.
  • Last but not least – With complete control of its inventory and award seat management, Air Canada is in a tremendous position to make a huge impact in the loyalty space.

Aeroplan has seen significant devaluations in the past few years and members have been frustrated with black outs dates and unavailability of awards seats on desired dates. If played right, Air Canada can really hit it big in solving the award availability issues.

Take Away

Credit where its due – announcement of Air Canada’s new loyalty program in June 2020, allows Aeroplan members 3 full years to assess and adapt to the changes and new developments. If you are sitting on large Aeroplan balance, 3 years is a good amount of time to seek and book your dream vacation. Competition is a good thing, and I couldn’t be happier for a new player to ruffle the Canadian loyalty market. I can’t wait for my inbox to be flooded with new Air Canada program bonuses and credit card offerings.

To discuss these possibilities and more, I was lucky to be featured in a couple of media engagements;

CBC News (web edition) – “Which side of Air Canada-Aeroplan split should you be on”

The National – Skip to 5:22 of the video for the Air Canada-Aeroplan bit.