Apologies for not posting about this earlier but news of the Air Canada/Aeroplan split came while I was in the middle of the Carribean Sea on a cruise vacation and at 25¢/MB … I wasn’t doing my internet surfing.
Aeroplan is/was a program that was launched by Air Canada back in 1984 in order to build brand loyalty and to stay competitive in the ever-present trend of rewarding loyal airline customers. In 2008, the program was completely spun off from Air Canada and is now currently owned and operated by Aimia, a Montreal-based company that specializes in loyalty programs. While the Aeroplan program allows you to redeem points on Air Canada, it should be noted that Air Canada does not currently directly control Aeroplan nor the points that are issued.
The Long Divorce
On May 11th, Air Canada announced that on June 30th, 2020, Aimia and Aeroplan would not be the loyalty program for Air Canada. Instead, Air Canada will launch its own rewards program but details of that program have not been released. All miles earned in Aeroplan will remain in Aeroplan and you will still be able to redeem for Star Alliance awards up until June 30, 2020. After June 30th, 2020 you will still be able to redeem but my guess is that it will be at a fixed value (likely a poor one). You should also note that after June 30, 2020, you will not be able to redeem your Aeroplan points on Star Alliance Partners. Only Air Canada.
Air Canada’s Official Press Release
Below is Air Canada’s official press release for the change. The notable items in it are:
- Air Canada intends to continue to offer Aimia redemption seats post-2020
- Benjamin Smith, President of AC notes that “Similar to all of Air Canada’s North American peers, by managing our own loyalty program, we will be able to take better care of our customers by making decisions in real time that address specific needs,” added Mr. Smith. “We’re excited to take this next step that delivers on our promise for continued investments in the customer experience.”
- Greater details of the new program will be revealed on September 19th, 2017 during Air Canada’s Investor Day
Effect on Aimia
The news of the divorce significantly affected Aimia in a very negative way. I mean, take a look at their stock price:
That folk is one ugly chart. As of today, Aimia has lost a WHOPPING 65.5% of its market cap since the announcement and is currently trading at their 52-week low.
One very real issue that may arise out of this announcement is that Aimia may start making cuts to their overheads, staffing, and expenditures in an attempt to shore up the stock price. This could mean that phone lines could have even fewer CSRs available to book your complicated mini-RTW itineraries. I am not fully aware of the role that Air Canada plays in the service standards of Aeroplan but if it is left up to Aimia, we may see more “maintenance” of the website and decreased customer service.
PointsNerd’s Take and Advice
Air Canada has given all Canadians the gift of time. We have a full 3 years to come up with our strategies for how to use up your Aeroplan miles but news like this is why I continue to harp on holding your points in a transferrable currency like American Express’ Membership Rewards (MR). My guess is that as soon as June 30th, 2020 hits, American Express will have a direct 1:1 transfer from MRs to whatever the new Air Canada program is called.
If you currently have Aeroplan miles in your portfolio, I would suggest that you make a concerted effort dispose of your miles and move into a transferable currency.
I am personally not worried at all and expect the new Air Canada program to be similar to Aeroplan. If you have a fear of Air Canada moving to a distance based redemption like British Airways Avios, it’s a possibility but my guess is that it’s unlikely.
I will personally be tuned into Air Canada’s Investors Day on September 19th to hear more about the new program.