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  • Jason

Air Canada Overhauls Aeroplan



The day we have been waiting for has finally arrived. Today Air Canada unveiled details of its plans for an entirely revamped frequent flyer program. While the name “Aeroplan” remains, most everything else, including the branding, has changed. With this article, we will take a high level look at the changes to the program, providing a summary of the key features of the new program. In future articles we will delve deeper into different aspects of the program.


The big fear most everyone had about Air Canada's introduction of a revamped Aeroplan program was a significant devaluation of points. It should come as no surprise then that there has been a devaluation. However, the devaluation could have been much worse. In fact, on certain routes the number of points required has actually been reduced.

It’s important to note that while Air Canada announced the details of the revamped Aeroplan program today, the changes do not take effect until November 8, 2020. So, if you have a particular award redemptions in mind under the current program which will be more expensive under the new program, you still have time to make award redemptions under the existing program.

So, without further delay, let’s take a look at the big changes to the Aeroplan program:


1. Dynamic Award Pricing for Air Canada Flights

Under the new program, every Air Canada Flight is Redeemable Using Points. If there is a seat available on an Air Canada operated flight, you will be able to book it using points. No longer will you get nil search results when looking for award flights on Air Canada metal. Of course, there’s a catch. If it’s the last seat, it may be cost a lot of points.


Air Canada is moving to dynamic award pricing for seats on Air Canada flights. There will be a range of pricing based on the seats available on a particular flight. If the flight you want to take has lots of seats left, the award pricing will be on the low side, if there are only a few seats left, you will be looking at a much higher award price. For example, under the current program a one way Economy flight from Vancouver to Toronto costs 12,500 points. However, under the new program that same flight could range between 12,500 – 17,500 points. So, while you might pay more for your flight, on the positive side you should have many more flight options since every seat is available for booking an award seat.


The new dynamic pricing does not seem that dissimilar to Aeroplan’s current “Market Fare” pricing in which you can pay more points to book award seats that are not available for a fixed mileage award.

You will see when we review the award chart below, that while the award chart shows a range of prices for Air Canada flights, that is only a “likely” range. The Air Canada website includes the following statement:

“You can expect your flight award 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.”

While that statement is under the heading “Plan on Predictable Pricing” it would seem that the dynamic pricing is, in fact, not all that predictable. Time will tell how many seats are available at the lower end of the points range and how often flights are priced outside of the published range on the award chart.

2. New Award Charts

Throw out your old Aeroplan award chart. Air Canada will be implementing a completely different award chart with award prices being based not only just on zones but also based on distance within and between zones.

There are now 4 zones: North America, Atlantic, Pacific and South America, as set out below:

Air Canada has created award charts for travel within each zone and between each zone. The award charts also separate the prices for award flights depending on whether you are flying on Air Canada (where applicable) or a partner airline. The charts are further broken down showing award prices based on the distance travelled. The charts can be found at the following link: Award Charts


By way of example, below is the new award chart for flights within North America:


As you can see, the award chart incorporates a range of redemption amounts for flights on Air Canada to reflect the dynamic pricing of Air Canada award redemptions. The award chart also includes fixed prices for awards redeemed on partner flights.

The award chart creates some new opportunities for short haul flights. Under the current program, very short flights can cost as little as 6,000 points, which is less than flights would cost under the current program. For example, a short haul flight, say, from Vancouver, BC to Kelowna, BC currently costs 7,500 points for a one way economy class ticket. Under the new program, that ticket will cost between 6,000 – 10,000 points. Provided there is sufficient number of seats at the lower point level, such short haul flights may actually cost fewer points under the new program.

Taking another example, a flight from Vancouver to San Francisco currently costs 12,500 for a one way economy ticket. Under the new program that same ticket will cost between 10,000-15,000 if you fly Air Canada or 10,000 points if flying on United.


One of the sweet spots of the new award chart are flights to Hawaii flying from the West Coast of North America. Under the current program, a one way economy flight from Vancouver to Maui is 22,500 points. Under the new program, the same flight will cost between 12,500-17,500 on Air Canada or 12,500 points on United.


Of course, there are plenty of scenarios where flights will cost more points under the new program. Under the current program, a one way economy flight from Vancouver to Halifax is 12,500 points. However, given the distance based pricing, under the new program the same flight on Air Canada will cost between 17,500 – 22,500 points under the new program, a substantial increase.


Air Canada has introduced a handy “Points Predictor Tool” which is an easy way to find the points required between two destinations. Check it out here: Points Predictor Tool


In an upcoming article we will dive more deeply into each of the various award charts and focus on international redemptions.

3. No Fuel Surcharges

This is HUGE and the most exciting feature of the new program in my view. Gone are the days of avoiding flights operated by Air Canada and certain other Star Alliance carriers because of the extra fuel surcharges (YQ) which could add hundreds or even up to a thousand dollars on a single ticket. We should all rejoice that Air Canada is getting rid of fuel surcharges on award redemptions.


This change opens up the opportunity to fly several different carriers that you might otherwise have avoided under the current program because of the high fees. I suspect that Lufthansa will now become a far more popular carrier on which to redeem Aeroplan flight awards. This change alone will save hundreds of dollars and open up more attractive flights for award redemptions.


4. Reissuance of Credit Cards


TD, CIBC and American Express will all be reissuing Aeroplan branded Credit Cards with a host of different benefits. Depending on the card, new benefits include preferred pricing when booking awards on Air Canada flights, free first checked bag, priority boarding, sharing of benefits with supplemental cardholders, Maple Leaf Lounge access when flying on Air Canada and companion passes when reaching certain annual spend.


There is a lot more going on with the credit cards that we will cover in an upcoming article.

4. Family Sharing

Another positive change is the introduction of family sharing. Family members will be able to join a family group to pool their points and redeem awards more quickly. I can see this as being helpful to families that go on family vacations once or twice a year with the result that the kids have a few thousand points. There is always the risk that those points become orphan points with no ability to use because each child's point balance is too low to redeem for a flight. With family sharing, those points can be pooled and actually used.


In addition, with family sharing, if one member of the family group has elite status with Air Canada or is an Air Canada Aeroplan credit card holder, everyone in the family group gets to benefit from their preferred pricing on flight redemptions.

5. Use Points for Flight Perks

Under the new program, you will be able to use points, rather than cash, to bid on upgrades or to redeem for in-flight wi-fi.

6. Integration with the Air Canada Website

Now that Aeroplan is owned by Air Canada, under the new program you will be able to book award flights on the Air Canada website, you know, just like you can with most other major airlines - what a concept! Searching for award flights will be just like booking a cash ticket on the Air Canada website.

7. New Charges

What the Points God giveth, the Points God taketh away. I’m not surprised to see additional charges introduced particularly when Air Canada is dong away with their gravy train of fuel surcharges referenced above. As a result, Air Canada has introduced a $39 charge for booking an award on a partner airline. Still, I will gladly pay a $39 fee to fly Lufthansa or Asiana Airlines rather than pay hundreds of dollars in YQ charges.


There are also slight increases in cancellation fees, the amount of which differ based on when you cancel your award.

8. Changes in Earning Points on Flights

As other airlines have done, Air Canada is changing the earning rate from being based on miles flown to instead be based on the price paid for the ticket. This will generally mean fewer points will be earned. On the positive side, however, you can now earn points no matter the fare class you purchase, even the cheapest basic economy ticket.

Conclusion


Overall, the changes to the Aeroplan program are better than I thought they would be. Yes, there is a devaluation of points value but that isn't really a surprise. It would have been shocking if there wasn't a devaluation of some sort. At the end of the day, the devaluation is not nearly as bad as it could have been. That's not to say that there isn't some disappointment in the increased points required for some redemptions just that, on balance, Air Canada has also made some significant improvements to the program.


As noted, the biggest news is Air Canada's dropping of YQ charges (fuel surcharges). That alone represents considerable savings on many award redemptions.


I'm looking forward to finding the sweet spots in the award chart, trying out some carriers I would have normally avoided because of fuel surcharges, making use of family sharing and checking out the new credit card perks.


We will be posting more articles as we unpack the new Aeroplan program. Let us know your thoughts on the new program below in the comments.

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