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Air Canada and partners (TD, CIBC and Visa) reached a deal with Aimia to buy Aeroplan for $450M cash and $1.9B in liabilities. Between the break-up and the recent announcement of buying out Aeroplan, millions of members have been in a tizzy, wondering about future of their account balances. So, what should Aeroplan members expect going forward?
First things first – Air Canada’s current agreement with Aimia for Aeroplan remains in place until June 29, 2020. Until then, business as usual – members can earn and burn under current conditions.
Potential Devaluation
For members that have account balances past June 29th, 2020, Air Canada has confirmed that the miles won’t expire, they will follow them into the new loyalty program, Aeroplan 2.0, if you will. What we don’t know is if the value of miles in Aeroplan account will be the same in Air Canada’s new loyalty program.
Air Canada (and partners) have taken on $1.9B in unused miles with this deal, one way to shave some of the cost is to strategically devalue the points in the new loyalty program. Even slight tweaks to the redemption charts can yield large savings for Air Canada. I do expect some form of devaluation of Aeroplan miles going past June 2020.
Rumours and Gossip
A reliable source has confirmed that the new loyalty program will get rid of the pesky fuel surcharges that Aeroplan has been notorious for. The new program will align itself better with its US partners and competitors.
If true, this alone should make members do a victory dance – no scam charges on award redemption would be a perfect foil to any award chart devaluation. And that they want to align themselves better with US competition suggests that future award charts would be similar to that of United (star alliance partner).
Given that Air Canada partnered with TD, CIBC and Visa in the buyout, Amex’s future with Aeroplan looks bleak. Amex offers the best credit card bonuses in Canada and unfortunately, I do not see them with the new loyalty program. Since Air Canada’s new loyalty program does not have to compete with Aeroplan for members, credit card bonuses may continue to be average, at best.
Last but not least, if the buyout goes through as expected, the recent partnerships Aeroplan announced (with Porter, Air Transat and Flair) will most definitely fall through as Air Canada would prefer to align itself with Star Alliance partners only.
Take Away
Under the new program, there will be devaluation to some degree, and members should still try and use their account balances before June 2020. If rumours about no fuel surcharges are true, that would be HUGE improvement and should make any potential devaluations easy to gulp down. This saga is far from over.
15 comments
The one thing I have learned about any travel loyalty program for the last while is that nothing will ever benefit the traveller unless it is offset by another reduction in benefit or devaluation somewhere else. I’m extremely skeptic about this whole transaction.
[…] (especially those couched as “enhancements”) are typically negative. However, if the rumor that Air Canada will be dropping fuel surcharges is true, a modest devaluation might be tolerable. […]
[…] а будут конвертированы в новую программу. Ходят также слухи, что в новой программе не будут взиматься топливные […]
Removing fuel surcharges just means an increase to the mileage requirements. No thanks.
It depends on how much they tweak the award chart, if at all. Best case scenario, they drop yq and simply match united’s award chart…
So what if they get rid of YQ if they simply jack up the number of miles? The net effect will inevitably be worse for members, so this sycophantic spin is nothing more than blatant shilling.
Lets hope the yq drop is not proportional to the increase in award chart. Dont think they will tweak the award chart that drastically. For example, I would be happy to pay 60k v 55k for a flight to EU, and not pay ~$600 in yq. That would be nice..
[…] Rumour: No Fuel Surcharges In Air Canada’s New Loyalty Program by Travel Update. I have no idea how reliable Travel Update’s source is. Getting rid of fuel surcharges is great, but if they just increase the cost of awards in miles it doesn’t help that much. […]
Fuel surcharges are a scam. They were introduced prior to the 2008 peak and just kept as extra revenue. I, like many others, seek alternatives as a result. Not a way to create brand loyalty.
Ditto a huge devaluation upon kickoff of a new program. Not a smart welcome.
Face facts , there will be a devaluation the minute Air Canada controls Aeroplan. To pay the 1.9 bill.
Your source is prob mistaken about YQ pure gossip.
Still better than independent Aeroplan.
I am confident in my source. But your are right, yq or not, its better than an independent AP.
Is AC likely to spell out the transfer details from Aeroplan 1 to Aeroplan 2 before the deal with Amex expires? I will spend all my current Aeroplan points before June, 2020. I have a lot of MR points I can transfer over and want to start the AC program with a good balance. My points come from credit cards so relying on TD and CIBC is a poor plan for acquiring enough points for long haul J class rewards. Getting timely info from AC is crucial to making the right decisions.
Absolutely, we will hear from AC and Amex as soon as they come to a decision. In fact once the butout process is complete, I expect a barrage of updates that will keep them in the news cycle. And you can always trust the boardingarea network to cover every stand of update that comes our way. Amex has directly address this issue in media and have conceded that they are evaluating their future with AP.
The fuel surcharges are charged by Aeroplan because Air Canada forces Aeroplan to do so. The fuel surcharge goes to the airline, not to Aeroplan.
Why would AC want to lose this extra money? This makes no sense. AC currently doesn’t charge fuel surcharges to their top tier members as a benefit to these members. If they didn’t want to charge this to all members, they could do so right now. They don’t need to wait till they purchase Aeroplan.
The July 2020 date no longer exists if AC buys Aeroplan. They could continue to use Aeroplan as long as they want. They could devalue the points as soon as they make the purchase – if the banks allow AC to do so.
Agreed that they dont need to wait until 2020 if the purchase goes theu before that. But I think they will, just so the new program can have a clear start date. I understand the hesitation in even considering theat the new program will drop yq, because it has been such a huge pain point, for so long. But I do want to believe the source its coming from and cant wait to find out more…I think AC will deliver on that and remove the yq. It will be their way to cushion the deval in award chart.