As we have discussed in other threads with regard to possible changes that can get the flyers back to AC, the problem with Air Canada is more than just upgrade policy and award redemption issues. Someone just talked about what if AC hasn't cut back on catering. Service level needs to improve. They need to invest in their products, which they haven't for a very long time in the airline industry. While the time is difficult, major airlines have chosen to innovate their products so that they will be ready when the economy recovers (e.g. ANA, Japan Airlines, CX and SQ). It is unfortunate that when we talk about Aeroplan these days, we are thinking of which benefit is the next to be eliminated or how AC is going to cut their cost at the expense of flyers. This is the wrong way to go as flyers would respond by not flying AC. So when trying to save a small fish by cutting benefits that anger the best customers, they miss the biggy. So is there anything that AC can do to recover some these damages? Granted it's going to be very difficult but Air Canada has to realize it's in their interests to pay attention to what we have to say. All these years since CP disappeared, AC has adopted an attitude: "We make the rules, take it or leave it." But this is not going to work anymore, the flyers are angry and if nothing is done about it, the flyers are going to retaliate forcefully.

Now, here are some suggestions as to how Aeroplan can reward its best customers:

UNUSED UPGRADE BONUS

One of the problem with Super Elites and some Elites is that they often have a surplus of upgrade certificates. For people who fly mostly full J, these papers are about useless. If Air Canada can establish a policy that would accept unused certificates for miles at the end of year, then it would be an extra incentive for flyers to fly Air Canada. Most importantly, I think high-yield passengers would then be more inclined to fly full J whenever possible because they know the fewer certificates they use, the more miles they get. AA and UA both have such policy as an unpublished benefit. With AA, their program is the most generous - for every 10,000 Q miles flown, you get 4 X 500 Miles upgrades which worth also 10,000 bonus miles if unused.

Aeroplan is not very competitive when it comes to earning miles for its Elite members. It only becomes better after you reach 100K threshold. For Elite flyers, they would earn less miles than their counterparts in other programs such as AA or UA. The situation is even more pathetic for people flying less than 50K a year with AC, you earn about 30% bonus of your total miles flown at 50K whereas similar programs with most major U.S. airlines earn 100% bonus of total miles flown. Someone who flies 40K would earn slightly more than 10% bonus of its total flown miles whereas others give you 100% bonus. Of course, that didn't even take into account the difference for exchaning upgrades against miles. In summary, if Air Canada wants to retain its loyal customers, it needs to increase the mile earning power of its most important flyers. Canadian flyers have many choices and they will vote with their budget.

Here is a comparison between the life of an AA Platinum VS. AC Elite:

At 40,000 Q miles

AA Platinum earns 40,000 base miles + 40,000 elite bonus + 40,000 unused upgrade bonus = 120,000 miles

AC Elite earns 40,000 base miles + 5,000 treshold level 1 bonus = 45,000 miles

At 80,000 Q miles

AA Platinum earns 80K X 3 = 240,000 miles

AC Elite earns 80,000 base miles + 45,000 treshold bonuses + ( one reward ticket worth 25,000 miles ) = 125,000 miles or 150,000 miles considering the value of the free ticket

At 120,000 Q miles

AA EXP earns 120K X 3 = 360,000 miles

AC SE earns 120K base miles + 85K treshold bonus + 30K bonus (at 10K) + free reward ticket = 235,000 miles or 260,000 miles with the reward ticket.

The conclusion is at levels below 50K which more than 99% of Aeroplan members belong to, the earning power is about a pathetic 35% of a U.S. program. Of course that didn't take into account the fact AC only offers 50% of mileage for domestic disccounted economy flights. At higher levels, the difference is smaller but nonetheless quite far behind still (e.g. 100,000 miles of difference, wow!) AC should seriously consider recuperating upgrade certificates for miles if they intend to spin off Aeroplan and the certificates would actually have a value to them. It would be an extra incentive for its best customers to remain with AC and especially those J pax unable to use those certificates to remain loyal. Remember, CP Plus used to do this just like AA, why can't AC? It will encourage people to buy J fare whenever possible not the other way around.


CLASS OF SERVICE BONUS

It was there until January 1st of this year, for people flying in C class. Taking this away is another reason for Elites and Super Elites to be indifferent about AC. By lowering itself to the level of its competitors would not give your loyal customers any incentive to choose you over your competitors. For people who buy C fares, it's unfair. Why can't they get bonus when they are paying business class fare? Another reason to fly someone else other than AC b/c paid discounted business fare earns class of service bonus on other airlines' program. It seemed AC only thinks about cutting costs but hasn't realized some things can't be cut or why not just shut down the airline completely, then there will be no cost at all? For flyers using certificates to upgrade to C class, they now earn about 20% less miles than before. This decrease is big although many don't seem to realize it. I for one is quite disturbed by this. Already earning power with AC is weak, now they have just cut it by another 20%, forget about it, UA or AA looks much more attractive now than ever.

Eliminate the fees associated with changing/cancelling awards for Elites and Super Elites

Impose fines for those who fail to show up and didn't bother to notify in advance but don't try to squeeze cash out of your best customers when you risk to get on their nerves and they will respond with irrational behaviors (swear not to fly you again). This is annoying and punishing for your best customers.


I trust these suggestions are more than reasonable as several of them were in fact old policies that you have abandonned in the name of cost cutting. But cost cutting is not the way out of this economic downturn if the bad will you create simply destroyed the customer loyalty of your most important customers. To fellow FTers, please feel free to add your comments and any other suggestions. We'll talk to AC on Feb. 7th but they will have chance to have an idea what to expect.