The Lev

Oh I've been around long enough to be very aware of all the "enhancements". I'm not saying the program will be better, I'm saying there is more than a remote possibility that it could become better. I agree AC's track record in this regard is less than stellar - but we will see.

Agree. I think it will be very important for AC to clarify their intentions quickly - especially with regards to potentially stranded aeroplan miles.

I don't think AC will buy AE. If you re-read my post I said they could pay Aimia to operate the program that they AC would own - just as Aeroplan currently operates altitude for AC.


They may indeed do that if they get in desperate financial straights. Didn't kill me last time they did it, wouldn't kill me if they did it again.

I don't believe AE will go down. It will survive as a smaller, less profitable program that competes with Air Miles and whatever AC names its new program.

We don't live in a populist nirvana. Something tells me the Canadian courts will uphold the law.

Zero.

You and Fiordland are correct. Can't see AE wanting to write a big cheque when they can give people toasters instead.

worldtraveller73

I wonder whether Aeroplan will start selling miles like AAdvantage and Alaska Mileage Plan to shore up another revenue stream in the near term ?

This is a near total disaster for TD Bank with their recent acquisition of the Aeroplan credit cards.

heraclitus

Haha...poor TD. First they got burned when CIBC maintained its toehold in the AE affiliated card game, now this.

Dorian

If they didn't see this coming they deserve it.

tracon

Any coincidence that these negotiations were mostly carried out during the CEO's sick leave?

worldtraveller73

That current 30,000 sign up bonus is going to go up to 50,000 as customers start to dump this card in mass in the next 12 months.

Transpacificflyer

Couldn't happen to a more deserving group. Yea, yea, I know, innocent until proven guilty, but honestly I won't shed a tear if they get dinged by this, just as I won't if CIBC is dinged since it is also named in the link.
http://www.cbc.ca/news/business/russ...nada-1.4102132

I disagree with your optimistic view. Aimia is in bad financial shape now. This is going to be the death by a hundred slices. I give it a year, until 2018. My reading of its financials is that it just doesn't have the strength to see this through. I also expect that we will see a rush on redemptions much as one sees a rush on the bank that is failing. The difference here is that there is no other entity to prop up this company.

West Jet if it has any brains will capitalize on this negative PR event and the increasing consumer animosity towards AC. It should push forward its international expansion plans, build closer ties to another alliance, and improve its FF plan. One thing it could do with its international routes once they are operating would be to offer an introductory preferred status to those who switch over.

In respect to the courts, if the court believes that AC acted in an unfair manner with an intent to deceive its customers, different rules apply. At the very least, I anticipate that we will at some point see a class action case if AC doesn't proceed in a transparent, and fair manner.

So much of this now depends upon Air Canada doing the right thing, of behaving in a fair and honourable manner. Based upon the airline's current behavior with its despicable approach to IROPs, overbooking and IDB, I expect this to be mishandled with tens of thousands of angry vindictive people resulting.

Guava

Termination of a material contract should indeed be disclosed. The question is, Aeroplan does not think this is final, based on their own press release although AC appears to think it is. Why disclose something that is supposedly still under negotiation knowing that such announcement could have very significant impact on the market as the share price of both companies showed after the announcement?

Thanks for this helpful insight. It appears my intuition was correct. AC will likely honor any AE tickets issued for AC metal in the event of a AE shutdown given that they were issued under 014 ticket stocks, therefore, likely paid/settled and to avoid any reputation damage. But any award tickets for travel on *A carriers may be much less secure given that they are only paid when they submit the flown coupons. If AC refuses to assume the liability of these *A redemption issued by AE, the holders of such award could still risk being stranded in the event of a sudden shut down of Aimia.


Thanks for this information, this is very helpful. Now things are making more sense.

Yes, I remember about Mr. Duchesne, seems like long time ago. I met him in Toronto once, very diplomatic man.

The highlight part is mine. I wonder, if this change is what soured the AC-AE partnership. There are likely other reasons we will never know.


I think the banks could have very strong incentive to take both AC and AE to Court if these changes materially alter the nature of their contract prior to the expiry and damage their businesses. TD essentially spent the last 3 years building their retail operations around Aeroplan, neglecting their own Rewards program prior to Aeroplan. Given how critical loyalty and customer satisfaction are to the Canadian banks, a big chunk of their bonus structure from CEO down to tellers are based off such criteria - any sharp drop in the volume of account sales / transactions will for sure prompt very strong reactions from TD. We'll see about that.

Not for the flight segments on *A partners, as the informative post by D582 explained. If the ticket involves any airline other than Air Canada, the risk that a passenger may be denied boarding is not trivial. In fact, judging from past experiences of similar situations, those *A carriers will likely not honor F/J award tickets issued by a defunct TA which they can't submit for payment.

To answer this question, AE needs to be put under the appropriate stress testing. The information you posted, while interesting, does not help us determine AE's capacity to withstand the sudden shock. Liquidity crunch can overwhelm a company that otherwise has a healthy balance sheet. Commercial credit lines can be terminated very quickly if the lenders believe your business can no longer afford them. Access to capital markets will be very difficult for Aimia from now on because there will be questions about its status as a going concern and the fact its stock price plunged by 63% in one day won't help. Unless AE can stabilize quickly, things will likely go from bad to worse. Without the specifics, I am not sure how these supposed diversification overseas help given that its core business in Canada has pretty much been obliterated, it's like saying Saudi Arabia is diversifying into solar energy knowing that one day oil wells will become dry, it won't help them much one way or the other.

The bottom line is there are still many things we don't know. How will the consumers react? Will there be a stampede to redeem AE miles? Will they divert their purchases away from accumulating AE miles? Will people stop crediting their flights to Aeroplan? Will AE attempt to filter out *A award inventory like United used to do in order to conserve cash flows? Will AE try to pull off any "cost saving measures" like Air Miles tried? Now that the information is public, how will the other stakeholders such as the big banks react? Will the government step in to prevent any disorderly shutdown of Aimia in case it runs into trouble?

Judging from the reactions of this thread, even the die hard AC apologists, usually SEs with a lot at stake in their Aeroplan accounts, are having some very serious second thoughts. I think a potential forum name change is the last thing we need to be concerned with at this time.

Argonaut1000

Not sure what all the fuss is about. Looks like everything is working as usual - It's after 9PM in Vancouver and can't log into the Aeroplan site.

ulyparis

Of course there is a link. It was announced just a few days ago that the CEO would not come back...

robsaw

Given that it was AC that mandated those surcharges (according to AE), that is a snort-worthy statement.

Jagboi

Too bad I don't need a toaster. Oh well, I don't have many miles when they disappear.

Handcake

I would love it if AMEX had the same amount of carriers they seem to in the US to move MR to.

Korean Air / Delta would work well for me.

Singapore Air/ Asiana for *A would be great, or even Air China...

PointWeasel

+1

I remain suspect of the new and improved AC FF program.

ulyparis

Interesting... but not sure I am following you. Any intelligence Aeroplan had, AC had, no?

Who is that exec who went back to AC?

We all complained about the "children" behaviour. For me, dealing with Aeroplan was always worst than dealing with AC. For example, if I make a mistake on an AC booking and realized it within 24 hours, I can cancel. Not so with AE.

Most of frequent flyers also have cases of missing miles never solved. This did not happen when AE was incorporated within AC.