On one level, I scratch my head in puzzlement about Tango. On another level, AC may be correctly anticipating trends with its in-house discount carrier and cutting its losses before they get totally out of hand.
First, by making available cheap tickets without advance purchase/Satuday stay requirements, AC is most definitely cannibalizing some of its high yield travel. And I find it hard to believe that, in the short run, the loss of even a few of these high yield passengers can be made up by cost savings/volume on Tango. in other words, on this level, Tango seems like a downright dumb move.
But the other level of the argument is more complex -- high yield fares may be going the way of the do-do-bird (at least for well-travelled North American city pairs) and AC may rightfully be realizing that desperately trying to hang onto the $3000 YYZ YVR fares in Y class is a losing proposition. Small businesses have always chafed at these fares; now larger companies are doing everything they can to avoid them, either by not flying, offering employees compensation for weekend stays or (worse for AC) instructing their employees to head to Buffalo for US destinations or Westjet for Canadian ones.
The breakdown in conventional air fares/patterns is spreading -- in the U.S., a mid tier transcontinental carrier, America West, has taken out the over saturday/advance booking restrictions so you can now fly coast to coast for under $700 US.
What all this means to the 'conventional' airline industry (and the Aeroplan program) is quite challenging, indeed. Somehow, I think it to be virtually impossible to graft a discount carrier structure on a full service airline body. And I think it quite impossible to connect a loyalty, er, bribery program for high yield business travellers (the elite/suerelite status tiers) with a program for the 'masses' redeeming their credit card and future shop purchases for 'free' vacation trips. The sheer complexity invites loophole finding and program manipulation -- and 'patching' the loopholes probably proves more costly in lost loyalty/anger than the revenue saved by cutting out the so called abusers.
I don't envy Rupert Deschesne and Robert Milton, and wouldn't hold it against them if they fail to solve the structural problems here -- and they will win "executives of the year" in my mind (and possibly a place in the business journals) if they can overcome these challenges successfully.