Aeroplan & Altitude notes from invite-only Toronto event
 

Hi everyone. AC has recently posted several jobs all obviously related to customer loyalty and the Altitude program. Tonight they hosted an event at their downtown YYZ office where prospective job hunters were introduced directly AC. Several of the hiring managers were present and the night was hosted by Mark Nasr who is the VP of Loyalty and eCommerce at AC.

The event was invite-only but the content was public so I feel it's fair game to share here.

The main slide presentation was content we're all largely familiar with. Of note, they really highlighted the move to Amadeus and stressed their intent to build YYZ into a major hub while maintaining YVR and YUL as the other AC hubs. An example given was the new YYZ-SAV route. The comment here was that all they need are a few pax to connect on to LHR, TLV, HKG or wherever and all of a sudden they have the beginnings of a viable feeder route.

In general I would classify the theme of the main presentation as enthusiastic optimism. The fact that AC stock has gone from pennies to $27 per share is a source of pride as is the fact that Calin got CEO of the Year. There's excitement in the fleet renewal program and a sense of calm now that all the union issues have been largely dealt with. The folks working AC Loyalty seem genuinely interested in created a program that truly generates loyalty. My sense is that they want to evolve the loyalty program to something more akin to SPG where (Platinum) elites are really made to feel special. There was acknowledgement that right now, the AE process is linear - you generate points, you search for flights or toasters, you redeem points ... The goal is to change this to a more circular path where "rewards should feel rewarding" and you end up feeling like a valued customer.

The "rewards should feel rewarding" obviously caught my attention. Mr. Nasr noted that right now there's a lot of "anxiety" associated with redemptions and that your free ticket ends up costing hundreds of dollars. (I could have interjected with a "thousands, not hundreds" comment but I restrained myself. :p) This is an obvious area of focus for the AC Loyalty team. I later asked Mr. Nasr about YQ and the Carrier Surcharge but he politely laughed and gave me a "no comment". ;)

Other comments I can recall (no particular order):

- AE points wil continue to be redeemable after 2020 at "advantaged rates". I assume this to mean that a 15K short haul will now cost 25K or something like that. It was noted that AC would prefer to just cut things off in 2020, but for long-term customer loyalty, they're willing to keep AE redemptions for a bit longer.

- While SE and E are obviously important to AC, there's a little extra focus on regular Tangerine customers. Specifically, a significant number of AE customers take one AC flight per year. There's a lot of thought going in to how to make these people take 2+ flights per year on AC metal.

- AC MM will continue to be honoured in the new program. I assume this to mean that they will continue to have lifetime *A Gold and the usual 50K perks.

- The new loyalty program will keep AC flights at the centre of things, but the loyalty program is meant to be "experiential" in nature. i.e. People want experiences instead of toasters.

- AC, LH Group and UA all share "every penny". This comment wasn't expanded upon but clearly it's related to code shares.

- AC has moved from being a waterfall organization to agile on the IT side. They recently completed an IT project in something like 17 weeks (from whiteboard idea to production), and they are now making updates to AC.com every 6 weeks or so. Just a year ago, the website was seeing quarterly updates so the pace of change within AC has been notable.

- The AC app is being updated even more frequently than the website. My sense is that they're putting a lot of effort into the app.

- Mr. Nasr noted that they've recently put upgrade lists on the app. He acknowledged that there are things they could do on the app that they don't but the trend will be for greater transparency on things like upgrades, standby lists etc. The switch to Amadeus will (theoretically) enable a lot more.

- After speaking with a few of the hiring managers, I'd say that there's general acknowledgement that there's a lot of infrastructure to build as well as concurrently developing a world-class loyalty program. Said one manager, "I can't buy the furniture unless I already own the house."

- The RFP for branded credit cards has gone out and the initial response is overwhelmingly positive. All the Canadian banks have responded and a few US banks have as well. Some US banks "are willing to setup shop in Canada" just to be a part of an AC-branded card.

- There was talk of "huge" and "lucrative" welcome bonuses to the new program. My feeling here is that year 1 will be very welcoming especially to nutbars like us.

- One manager said (of the new program), "We shouldn't have to teach people calculus here." The idea is that the new program will be easy to use and very transparent as to where the value lies.

- Lastly, an observation: the AC office space is warm and inviting (as much as a large office can be). AC has taken one cue from WS - the managers have (large!) fishbowl offices on the inside so the worker bees get to have cubes by the windows. There also seems to be a lot of space in the office. They clearly are not going the HD route with office space! While there's a cynical series of comments that could be made, I'll choose the optimistic one and say that the loyalty team probably understands that 3-4-3 configs are not entirely conducive to generating raving loyal fans. There's explicit acknowledgement that Rouge is a key part of AC going forward, but from a loyalty perspective the customer will be the central focus which in turn will remodel certain business decisions.

All in all, it was a very interesting evening. While I personally hope to land a job out of this, I am quite pleased to see and hear that AC Loyalty is taking things very seriously. I left AE and by extension, AC, several years ago. My choice to leave took several years and the process of leaving took a year. Since then, I'm on record here taking more than few potshots at AC. But admit to still feeling a thrill when I see the maple leaf on a tail in some far-flung airport. And I've always hoped that AC would find a better way forward. After tonight's event, I'm feeling optimistic that AC is investing in the future and rethinking / reinventing the business in ways that will be positive not just for AC but for us pax as well. Nothing is perfect but I think Altitude will strengthen AC and lead to a much better experience for all of us.

Questions? Fire away.

Thanks.

And good luck with the job search. Will you still be talking to us if you get hired? :D

No questions from me, but thank you for the detailed write-up! ^

@RCyyz

Thanks for all the details and especially for posting here.

Thanks for the information.

One observation: the app is broken. It is terrible. And it has been so for months in exactly the same ways. I have sent numerous bug reports to no effect. If they count it a success I beg to differ.

With such a glowing review, sounds like s/he is already working for AC. 😁

In all seriousness, many thanks for posting this. Makes me potentially interested in flying AC post divorce...if AC has installed WiFi for its widebodies by then that is.

If memory serves me correctly, you are on IOS. The android app appears to be working very well. Perhaps they are still struggling with the one OS.

Very interesting. Thanks for taking the time to share it!

Lot of useful directional info from the OP.

Some focus on the FOTSG, eh. Interesting.

Thank you for sharing it with us, some incredible insights that I find to be fascinating.
Do you happen to know if they are looking for entry level product management people?

On a side note, I still find it funny that companies are going all out on "Lean six sigma" and "Agile", though personally it has been more BS than substance

Personally I find the app underwhelming, the fear is it will be significantly more bloated with reward stuff building in, my gut and experience in finance tells me they are probably going to go beyond flights and moving into something of an "ecosystem". UI in particularly is mediocre and un-user friendly.

I see almost every major CDN bank is moving into the direction stated in this McKinsey report,
https://www.mckinsey.com/industries/...n-for-us-banks

My take is that Airlines like AC are going to aim for the same, well it's either that, or they get squeezed out by 3rd parties.

Making 'em FTTSG, that's almost doubling the profit (or cost :D) if you think about it, assuming 95% of flyers are FOTSG.

They won't make any FTTSG types as long as the "We're not happy until you're not happy" stigma remains... and many of the FOTSGs I know who flew AC once swear on remaining an AC FOTSG, or never again. The stigma is hard to shake.

Well you can get past that with two things
Lowest Price or Higher Brand Perception
With the way they launched their Y products on new builds, its certainly is not the 2nd.

From a reward perspective, the trigger could be more different by focusing on up-sell instead (which they tried with Student Altitude which they have now killed)
Encourage more redemption of upgrade from Flex for non-altitude members, free bag, extended leg room could potentially lead to better brand perception, and reliance

Sounds like a plan.