Aeroplan

Aeroplan
Subsidiary
Industry Marketing/Consumer Discretionary
Founded 1984
Headquarters Montreal, Quebec, Canada
Key people
 Kevin O'Brien (Chief Commercial Officer, Aeroplan), Vince Timpano (President and CEO of Aimia in Canada), Rupert Duschene (Group Chief Executive of Aimia)
Owner AIMIA
Website www.aeroplan.com

Aeroplan is a coalition loyalty program[1] owned by Aimia, a global loyalty management company. The Aeroplan program was created in July 1984 by Air Canada as an incentive program for its frequent flyer customers. There are approximately 4.6 million active members in the program.[2]

In recent years, Aeroplan has evolved into a loyalty marketing program with retail partners such as Esso, Home Hardware, Birks, Thrifty Foods, and Nestle Canada. Aeroplan is also used by Air Creebec, Canadian North, Calm Air, and First Air.[3] Internally, Aeroplan has deployed the MicroStrategy platform for business intelligence reporting and analytics for its personnel to analyze member information, track purchasing patterns, identify profiles of loyal members, and align its loyalty program with members' preferences.[4]

Many Aeroplan members collect miles via credit cards. Credit cards were originally allocated to CIBC and Diners Club/enRoute, but were later offered to AMEX Bank of Canada, while Diners Club withdrew from the program.[4] (The contract with CIBC expired at the end of 2013, and Aimia began a new partnership for credit cards with Toronto-Dominion Bank as of January 1, 2014.[5])

In 2012, approximately 2.3 million rewards were issued to members, including more than 1.6 million flights on Air Canada or other Star Alliance carriers, which offer travel to more than 1,000 destinations worldwide.

Corporate history

When it was created in 1984, Aeroplan's operations were fully integrated with those of Air Canada. In 2002, Aeroplan was spun off as a wholly owned subsidiary of Air Canada.

In June 2005, Air Canada's parent company, ACE Aviation Holdings, sold 12.5% of Aeroplan for $250 million through an initial public offering, thereby creating the world's first publicly traded loyalty program, Aeroplan Income Fund.

On December 20, 2007, Aeroplan Income Fund acquired Loyalty Management Group, a loyalty marketing and customer-driven insight and analysis business that owns and operates Nectar, the UK's leading coalition loyalty program.

On May 28, 2008, ACE Aviation Holdings disposed of its remaining holdings in the fund.[6] As such, the Aeroplan program is no longer under direct control of Air Canada.

The corporate name was changed to Aimia in order to "reflect the fact that the program has grown and diversified into a comprehensive customer loyalty program with hundreds of participating retailers."[7]

Competition

Aeroplan faces competition from many sources, including other airline reward programs (even within Star Alliance), various bank-affiliated credit card loyalty plans, and the Air Miles program.

Mileage expiration

Aeroplan points expire if the member has no account activity for a period of 12 months. In the past, Aeroplan had a policy where all miles would expire after seven years, even if there was continued activity in the account. This policy has since been cancelled as of June 27th, 2013. [8]

Class action lawsuit

When miles expire, Aeroplan offers to restore the miles for a fee of $30 plus $0.01 per mile, which in some instances has resulted in charges of several thousand dollars for high-mileage members. Members have argued that Aeroplan had already been paid for the miles through the selling partner by virtue of the retail pricing and by fees charged for certain collector credit cards. As a result, on many blogs, members were upset that their miles had been emptied from their accounts.[9][10]

As Aeroplan refused to give the miles back, a class action lawsuit[11][12] was launched by Montreal lawyer Owen Falquero of Merchant Law Group LLP.[13]

On August 3, 2009, the Quebec Superior Court granted authorization to launch a class-action lawsuit challenging Groupe Aeroplan Inc.'s practice of cancelling points accumulated in its loyalty program. The motion, obtained by Montreal lawyer Owen Falquero of Merchant Law Group LLP, was filed on behalf of about seven plaintiffs across Canada; however, thousands of petitioners have registered for membership in the class. The motion was filed formally on behalf of Noella Neale of Port Coquitlam, BC, a single mother whose 150,000 points were annulled by Aeroplan because she had not made a contribution or a redemption in her account for one year, a period during which she had fallen ill. Those points fell victim to Aeroplan's rules, under which the company erases points in an account that has been dormant for 12 months. In a telephone interview, Neale said she had been going to pay for her daughter's trip to New Zealand—her graduation gift—until she tried to pay from her account and saw that it had been emptied. Aeroplan spokeswoman JoAnne Hayes declined to comment on the issue because it is now before the courts. In a statement, Aeroplan noted, "no class action has yet been filed. This motion is the first procedural step before any such action can be instituted." The company stated, "petitioners (are) seek(ing) court permission to sue Aeroplan on behalf of program members in Canada to obtain reinstatement of expired miles, reimbursement of any amounts already expended by Aeroplan members to reinstate their expired miles, $50 in compensatory damages and an undetermined amount in exemplary damages on behalf of each class member, all in relation to changes made to the Aeroplan program concerning accumulation and expiry of Aeroplan Miles as announced Oct. 16th, 2006." But Aeroplan stressed that it "is of the view that there are good grounds for opposing the motion for authorization and will vigorously defend any class action, should one be authorized by the court." Neale said, "I felt like they stole from me." "If the bank took my money like that, it would be theft. I earned those points. They belong to me, and (Aeroplan) has no right to take them away from me."

Air Canada membership levels and numbers

There are four levels of membership in Air Canada's Altitude Program: Basic, Prestige, Elite, and Super Elite. The latter three are called "Top Tier" membership levels and provide travel benefits such as upgrades, lounge access, priority services (e.g., check-in, luggage handling), and bonuses when earning miles through air travel. In order to qualify for one of the three Top Tier levels, a member must earn a certain number of "status miles" or fly a certain number of "status segments" in a given calendar year (thus qualifying that member for the next benefit year). Prestige members and Altitude Elite 35 K receive Star Alliance Silver status, while Elite 50K, Elite 75 K, and Super Elite members receive Star Alliance Gold status.

As of January 16, 2006, there were approximately 4.9 million Basic members, 57,000 Prestige members, 68,000 Elite members, and 9,000 Super Elite members.

Air Canada Status Miles are calculated on an annual basis (January 1 through December 31) to determine Altitude Membership Status for the following benefit year (March 1 through February 28).

Air Canada Top Tier status prior to 2013

2013 Top Tier changes

Air Canada redesigned membership levels and qualifications in 2013. The Elite level, previously at 35,000 Aeroplan Status Miles or 35 Status Flight Segments, was changed to 50,000 Aeroplan Status Miles or 50 Status Flight Segments.[14] New levels at 35,000 Status miles or 35 segments and 75,000 Status Miles or 75 segments were introduced. The Super Elite level was unchanged.

Earn miles

1. Earn Aeroplan Miles with Air Canada:[15] For travel on flights within Canada and between Canada and the continental United States (including Hawaii), 25% of miles flown are earned for Tango Class, 100% of miles flown are earned for Tango Plus and Executive Class Lowest, and 150% of miles flown are earned for Executive Class Flexible. For travel on flights for all other destinations worldwide, 100% of miles flown are earned for Tango Plus, 125% for Executive Class Lowest, and 150% for Executive Class Flexible.

2. Earn Aeroplan Miles when booking from AirCanada.com:[16] Earn up to 1 Aeroplan Mile for every dollar spent when you purchase an eligible ticket at AirCanada.com (Canadian and US edition only). Earn 1 Aeroplan mile for every 3 dollars spent when you purchase an eligible Flight Pass at AirCanada.com (Canadian and US edition only).

3. Other partners:[17] Aeroplan miles can be used to redeem flights from Air Canada and partner airlines. Air Canada is part of the Star Alliance, a group of 28 airlines that co-operate to expand the offerings of each individual airline. Awards are redeemable on any one of these airlines. Each flight is allocated a certain number of "award seats" available to be used for award redemption.

Airline partners

A full listing of partners can be found at.[17]

Fully integrated airline partners

Star Alliance partner airlines

Other partners

June 2013 announcements

On June 27, 2013, it was announced that Aimia had signed a conditional agreement with Toronto-Dominion Bank (TD) to become a credit-card partner as of January 1, 2014, and that Aimia would seek to terminate its decades-long relationship with CIBC.[5][18][19] After the announcement, Aimia's stock rose by 11 percent.[5]

In response, CIBC suggested that Aimia was attempting to nullify CIBC's right of first refusal.[20] CIBC had already been hinting that it was dissatisfied with its arrangement with Aeroplan and might start its own loyalty program.[21]

Aimia's conditional deal with TD would last ten years and involve an up-front payment of $100 million. Aimia said that CIBC had until August 9, 2013, to exercise its right of first refusal by matching the terms of the proposed TD contract.[19]

In another announcement, Aimia cancelled Aeroplan's "seven-year mileage redemption policy".[22] The policy had originally come into effect at the beginning of 2007, and provided that all miles would expire if unused after seven years, with the accumulated mileage of all customers as of January 1, 2007, expiring at the end of 2013. Aimia CEO Rupert Duchesne told Bloomberg news service that people had been worried there would be a run on Aimia's cash flow in 2013, but cancelling the seven-year expiration policy removes that worry.[5]

In addition, on June 27, Aeroplan announced the launch of Distinction, a tiered recognition program that rewards top accumulating members based on total Aeroplan Miles earned across all coalition partners, with preferential mileage levels for redemption, bonus mile offers, and exclusive privileges. Benefits begin as of January 1, 2014, and include three status levels based on a member's total eligible mileage accumulation during the calendar year: dSilver (25,000 miles), dBlack (50,000 miles), and dDiamond (100,000 miles).

References

  1. ↑ "ANNUAL INFORMATION FORM FOR THE FINANCIAL YEAR ENDED DECEMBER 31, 2009." Aeroplan. 6 (9 of 79). Retrieved on February 18, 2011. "The registered and head office of Aimia is located in Aimia Tower in Montreal, Québec, Canada, H4A 3T2." Archived October 11, 2010, at the Wayback Machine.
  2. ↑ "Aeroplan travels overseas to buy British loyalty program". CBC News. December 3, 2007. Retrieved 2013-05-20.
  3. ↑ "Our Partners". Aeroplan. Retrieved 2013-05-20.
  4. 1 2 "Aeroplan Chooses MicroStrategy for Enterprise Business Intelligence Solution" (Press release). MicroStrategy. February 29, 2012. Archived from the original on 2008-07-31. Retrieved 2013-05-20.
  5. 1 2 3 4 Doug Alexander (2013-06-27). "Aimia Soars as TD Signs Aeroplan Card Agreement: Montreal Mover". Bloomberg. Retrieved 2013-06-29.
  6. ↑ Jones, Jeffrey (2008-05-28). "ACE sells remaining stakes in Aeroplan, Jazz Air". Reuters. Retrieved 27 October 2016.
  7. ↑ "Aeroplan program set to switch to TD from CIBC". CBC News. 2013-06-27. Retrieved 2013-06-29.
  8. ↑ https://www4.aeroplan.com/mobile/Help.do#FAQItem2
  9. ↑ "Aeroplan: have a dream? Too bad.". November 9, 2003. Retrieved 2013-05-20.
  10. ↑ "Aeroplan class action suit?". October 12, 2007. Retrieved 2013-05-20.
  11. ↑ "Group seeks class action lawsuit against Aeroplan". CBC News. 3 July 2009. Retrieved 27 October 2016.
  12. ↑ "Aeroplan National Class Action/Recours collectif Aeroplan". 2009-03-04. Retrieved 2013-05-20.
  13. ↑ "B.C. mom behind Aeroplan class action lawsuit". July 7, 2009. Retrieved 2013-05-20.
  14. ↑ "All About Altitude". aircanada.com. Retrieved 2013-11-11.
  15. ↑ "Air Canada - Earn up to 150% of the miles you fly". .aeroplan.com. Retrieved 2013-01-29.
  16. ↑ "Book your travel online at aircanada.com and earn Aeroplan Miles for eligible flight reservations". .aeroplan.com. Retrieved 2013-01-29.
  17. 1 2 "Earn Aeroplan Miles from partners". Retrieved 2013-05-20.
  18. ↑ Tim Kiladze (2013-06-27). "TD, CIBC battle for Aeroplan loyalty". The Globe and Mail. Retrieved 2013-06-29.
  19. 1 2 Judy McKinnon and Ben Dummett (2013-06-27). "Aimia Moves to End Aeroplan Partnership With CIBC". The Wall Street Journal. Retrieved 2013-06-29.
  20. ↑ "CIBC provides further disclosure on Aimia press release" (Press release). CIBC. 2013-06-27. Retrieved 2013-06-29.
  21. ↑ "Aeroplan program set to switch to TD from CIBC". CBC.ca. 2013-06-27. Retrieved 2013-06-29.
  22. ↑ "Good news: 7-year points expiration scuttled for Aeroplan". CTV British Columbia. 2013-06-27. Retrieved 2013-06-29.

See also

External links

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