Is it time to Bail from Aeroplan

Old May 30, 2003, 3:39 pm
  #1  
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Is it time to Bail from Aeroplan

I am a AE member and have accumulated a considerable aeroplan nest egg over the last 4 years. Has the time come to start booking long haul flights on UA, ANZ,or SA in order to secure their value in case AC goes down or Aeroplan miles are devalued once the new / bailed out airlines raises out of the ashes.
Latest activity has got me worried. Any thoughts or strategies would be appreciated.
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Old May 30, 2003, 3:47 pm
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I think it's too late to be worrying. If you wanted to burn up your miles/points you probably should have started some time ago. Booking a flight on another carrier will probably not amount to a flight if AC goes under this weekend, for example.
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Old May 30, 2003, 8:24 pm
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Ken hAAmer:
I think it's too late to be worrying. If you wanted to burn up your miles/points you probably should have started some time ago. Booking a flight on another carrier will probably not amount to a flight if AC goes under this weekend, for example.</font>
Why not, Aeroplan is a separate company, so we are led to believe and just like Jazz might not be included in a bankruptcy.
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Old May 30, 2003, 10:18 pm
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by parnel:
Why not, Aeroplan is a separate company, so we are led to believe and just like Jazz might not be included in a bankruptcy.</font>
It's actually Aeroplan and Destina that are not included in the CCAA filing. All the remaining portions of the AC entity are included in the filing, including Jazz.
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Old May 31, 2003, 11:49 am
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Ken hAAmer:
I think it's too late to be worrying. If you wanted to burn up your miles/points you probably should have started some time ago. Booking a flight on another carrier will probably not amount to a flight if AC goes under this weekend, for example.</font>
Agreed. Without AC I can't see Aeroplan being around regardless of whether it is seperate or not. Who will pay it for miles so AP can pay partners? The bulk of their income must come from AC - no?
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Old May 31, 2003, 12:48 pm
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Given the inability of most members to actually get seats they want, for many of us the question is somewhat moot.

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Old May 31, 2003, 4:38 pm
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Altaflyer:
Agreed. Without AC I can't see Aeroplan being around regardless of whether it is seperate or not. Who will pay it for miles so AP can pay partners? The bulk of their income must come from AC - no?</font>
You'd think that someone at Proctor-Silex might read this forum. What with all of the talk of toasters here, there might be some business to be had!!

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Old May 31, 2003, 5:18 pm
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by pdjcrawford:
You'd think that someone at Proctor-Silex might read this forum. What with all of the talk of toasters here, there might be some business to be had!!

</font>
You *are* catching on.

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Old Jun 1, 2003, 10:38 am
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In fact, Aeroplan may be the most protected FF program in the world. It is no longer tied to AC corporately in that if that airline goes down, Aeroplan is still an operating business. Your liability in miles and award tickets lies with them, not AC. They are solvent, and can remain in business offering seats on other STAR carriers, and new ones who could then affiliate with it.

Why would CIBC be so willing to up its stake in a program that would stiff millions of Canadians? Why did so many other banks want to get in on Aeroplan? Why does Amex want in? Why does Onex still want to keep its deal on the table?

Surely these businesses do not see Aeroplan's future being solely tied to AC, and recognize it can still meet its obligations for "free" travel. Otherwise, they too would be liable for misleading us. But the FF programs of most other carriers are owned and operated as divisions of those airlines. So if UA went down, so would Mileage Plus, as would AAdvantage if AA folded.

Of course, CIBC insisted on loaning money to some pretty flakey ENRON subsidiaries...
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Old Jun 1, 2003, 10:49 am
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Shareholder:
Why would CIBC be so willing to up its stake in a program that would stiff millions of Canadians? Why did so many other banks want to get in on Aeroplan? Why does Amex want in? Why does Onex still want to keep its deal on the table?

Surely these businesses do not see Aeroplan's future being solely tied to AC, and recognize it can still meet its obligations for "free" travel. Otherwise, they too would be liable for misleading us. But the FF programs of most other carriers are owned and operated as divisions of those airlines. So if UA went down, so would Mileage Plus, as would AAdvantage if AA folded.
</font>
No, several airline groups have their "loyalty" product as a separate enterprise.

UA has been given a big pile of money by Jamie Dimon and his company, Bank One - the same bank that issues the UA credit cards. Why? Because affinity cards, such as the UA cards or Aerogold, have a lower churn rate, lower marketing costs and make a significantly higher contribution to the bank's bottom line numbers.

The world does not revolve around Aeroplan, and if anything, there is the real danger that the companies involved are going to inadvertently strangle this golden goose by overextending it away from its core - by charging so much to redeem a ticket, for instance, that the points are seen by the average consumer to be practically worthless - AeroMiltons, as it were.
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Old Jun 1, 2003, 11:00 am
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Outside of Carlson Wagon Lit which manages FF programs for NW and KL, can you identify which others are operated by independent companies. Mileage Plus and AAdvantage are all integral operations of those airlines, not separate companies as Aeroplan has now been established. That BankOne gave UA money, is for the reasons you noted, to assist in its reorganization under Chapter 11. But Mileage Plus was covered under that filing, whereas Aeroplan and Destina are not.
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Old Jun 1, 2003, 11:29 am
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Shareholder:
Outside of Carlson Wagon Lit which manages FF programs for NW and KL, can you identify which others are operated by independent companies. Mileage Plus and AAdvantage are all integral operations of those airlines, not separate companies as Aeroplan has now been established. That BankOne gave UA money, is for the reasons you noted, to assist in its reorganization under Chapter 11. But Mileage Plus was covered under that filing, whereas Aeroplan and Destina are not.</font>

You don't get your own point - Air Canada Aeroplan is not operated by an independent company - it is "independent
wholly-owned subsidiary of Air Canada" that has its own management, but is nothing more than an asset under Air Canada. If Air Canada would be liquidated, Aeroplan in its entirety would be sold to the highest bidder or wound down, whichever best addresses the interests of the creditors.

Aeroplan is in no way - at this point at least - an independent company and it derives it raison d'etre from Air Canada.

An example of an independent program would be Air Miles, the company based in the Netherlands, as opposed to the Loyalty group folks in Toronto.

A second, now wound up example, was Qualiflyer, which survived the Swiss meltdown and then was split amongst its dominant participants.

The fact that Air Canada made a subsidiary company in which to hold the Aeroplan program does not somehow make it independent! If your logic would hold true, then these UAL Corporation entities are "independent" as well:

UAL LOYALTY SERVICES INC

MILEAGE PLUS HOLDINGS INC

MILEAGE PLUS MARKETING INC

MY POINTS.COM INC

CYBERGOLD INC

MYPOINTS OFFLINE SERVICES INC

MILEAGE PLUS INC

Edited to add more companies.

[This message has been edited by msn (edited 06-01-2003).]
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Old Jun 1, 2003, 11:47 am
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by msn:

You don't get your own point - Air Canada Aeroplan is not operated by an independent company - it is "independent
wholly-owned subsidiary of Air Canada" that has its own management, but is nothing more than an asset under Air Canada. If Air Canada would be liquidated, Aeroplan in its entirety would be sold to the highest bidder or wound down, whichever best addresses the interests of the creditors.

Aeroplan is in no way - at this point at least - an independent company and it derives it raison d'etre from Air Canada.

An example of an independent program would be Air Miles, the company based in the Netherlands, as opposed to the Loyalty group folks in Toronto.

A second, now wound up example, was Qualiflyer, which survived the Swiss meltdown and then was split amongst its dominant participants.

The fact that Air Canada made a subsidiary company in which to hold the Aeroplan program does not somehow make it independent! If your logic would hold true, then these UAL Corporation entities are "independent" as well:

UAL LOYALTY SERVICES INC

MILEAGE PLUS HOLDINGS INC

MILEAGE PLUS MARKETING INC

MY POINTS.COM INC

CYBERGOLD INC

MYPOINTS OFFLINE SERVICES INC

MILEAGE PLUS INC

Edited to add more companies.

[This message has been edited by msn (edited 06-01-2003).]
</font>
HUH????
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Old Jun 1, 2003, 11:52 am
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Okay - Shareholder was trying to assert that because Aeroplan is a separate company under Air Canada, it is independent from Air Canada somehow and a program like Mileage Plus is not separate from UAL, so I listed the "separate companies" that comprise UAL's loyalty program group.
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Old Jun 1, 2003, 1:57 pm
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by msn:
Okay - Shareholder was trying to assert that because Aeroplan is a separate company under Air Canada, it is independent from Air Canada somehow and a program like Mileage Plus is not separate from UAL, so I listed the "separate companies" that comprise UAL's loyalty program group.</font>
Doesn't matter who is connected corporately;it's who files what companies into ch.11 and UA put the whole works into it while AC did not. Its up to the individual parent company to decide what Companies need protection from the courts. In the case of AE it spins off some cash which the parent then has access to during the bankruptcy period.
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