The New Aeroplan - A Devaluation Disguised
Air Canada and Aeroplan will re-launch their loyalty program to much fanfare on Monday. Although the delivery was pushed back due to COVID-19 (and due to testing issues), a red carpet was rolled out by Air Canada to launch the new program to the media in August of this year. While I can appreciate that the PR team at Air Canada did a fantastic job of selling the best features of the new program - but I’m here to say, the new program isn’t going to be good for a savvy consumer (nor the average consumer). In fact, I’m predicting that the new Aeroplan will be a bad value (especially when travel gets back to normal)
First things first, let’s give credit where credit is due, Air Canada put in a lot of effort (and money) to completely rebuild their loyalty program, Aeroplan. They asked consumers, they worked with their banking partners and ultimately came up with something that their core business (flying people around the world) could support while trying to deliver value to consumers. The headline values that have been promoted are great news for consumers - no pesky carrier surcharges, every seat on the plane is available and family sharing will all add value to consumers. That being said, most bloggers haven’t gotten down to the fact, for many users going forward Aeroplan flights will be more expensive and less accessible to the average consumer.
Air Canada has promoted the new award chart, with a reported “95%” of tickets being priced within the ranges on their reward chart, but they are not providing much confidence with the availability of flights within the lowest range. The website currently says
“You can expect your flight reward to fall into that range during normal times. If you’re looking to travel in a high demand period, just like booking with cash, the price of the trip in points might be higher than the range.”
To me, that screams like a constant devaluation of flights when demand is higher than normal. When it’s typically a good time to use points (during holidays, summertime, long weekends) I predict that flights will be much higher than the reward chart states. I think Greg, at Frequent Miler, sums up what I expect to be the standard going forward. In his May 2019 article, he was looking at awards from Detroit to Auckland and this is what American carriers, who have a similar reward set up to the future Aeroplan, offer:
AA shows awards available for “only” 175K per person one-way in business class:
Delta shows awards available for “only” 465K per person one-way in business class
United shows awards available for “only” 200K per person one-way in business class
Delta One - LAX to SYD (FrequentMiler)
Just as a barometer, Air Canada usually releases a few seats on their flights to Australia, but I can guess that in the future, they won’t release any at the bottom levels. For example, look at United’s flight from Los Angeles to Sydney at the end of the schedule next year - they only released two economy flights, and that’s it for availability, the rest is 200K for a one-way business class ticket.
Thank god I can fly Economy to Sydney on a random Wednesday
It’s the same with Delta, as they’re asking for at least 82,000 SkyMiles each way, in economy class on the Los Angeles to Sydney route.
That’s a lot of points for a little seat
This is more of the norm than the exception. Especially pre-COVID, most American companies offered limited value for their reward flights. For context, I’ve followed several Air Canada routes to Europe, and they typically didn’t release many business class seats until the last few weeks before departure. I don’t expect that to change, you should expect flights to London, Paris, Amsterdam and Tel Aviv will be constantly priced above 150,000 miles each way.
It’s going to take a lot longer to earn flights with the new Aeroplan (Air Canada Handout)
For a savvy earner, these increased rates may mean it takes 6 extra months to earn redemption, but for the average earner, it’s going to take several extra years to earn that dream flight you’ve been saving up for. Take two economy return flights at that 82,000-mile rate that Delta advertises - well above the 45,000 tickets that the old Aeroplan offered. At 37,000 points more than before, multiplied by 4 one way tickets, it would cost 148,000 more Aeroplan points than before. For someone using a “core” Aeroplan credit card (Credit card rundowns by Ricky at the Prince of Travel), this would take the average consumer an extra 4 years to earn two tickets to Australia (assuming the household spends $2k a month on their card at a blended average earn rate of 1.5 points per dollar spent), an astounding sum, and something to consider when comparing the Aeroplan cards to more flexible earning or cashback.
The value proposition of the new Aeroplan isn’t clear to all consumers, as prices will continue to increase, even as earning rates stay more or less the same. While some inflation is expected (10% - 20% even though the price of flights has decreased), the large variety of prices, and the fact that Air Canada will be allowed to increase prices without notice, means that Aeroplan won’t be my program of choice going forward.
It’s going to be harder to book direct flights on Air Canada’s Dreamliners (Air Canada Handout)
To Air Canada - My suggestion is to be more transparent, let us know how many saver flights you will be releasing, and consistently release them well in advance of the flights. For example, although British Airways Executive Club has its flaws, they do guarantee at least 2 business class tickets and 4 economy tickets on each flight, and that’s important. If Air Canada was willing to publicly come out and tell users there is a chance, if they book early, to get a seat for that low price they advertised on each plane, that would be a fair solution, and allow the average consumer to have a chance at their dream trip, and therefore provide value in their credit card products.
