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Update: Aimia accepts Air Canada, TD, CIBC & Visa revised $450-million Aeroplan bid

Old Aug 21, 2018, 8:23 am
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Last edit by: yyznomad
For those of you interested only in the revised $450-million deal and related discussion, it starts on post 418:

https://www.flyertalk.com/forum/air-canada-aeroplan/1926409-update-aimia-accepts-air-canada-td-cibc-visa-revised-450-million-aeroplan-bid-28.html#post30109427
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Update: Aimia accepts Air Canada, TD, CIBC & Visa revised $450-million Aeroplan bid

Old Aug 22, 2018, 6:07 pm
  #556  
 
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Originally Posted by Shareholder
Remember, AMEX is a Charge Card that requires full repayment each month. TD and CIBC Visas are Credit Cards, so balances can be carried (though not sure how many premium cardholders don't pay off their balance each month). .
Far, far more than you would ever think.
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Old Aug 22, 2018, 6:29 pm
  #557  
 
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Originally Posted by MasterGeek
Air Canada's initial offer to buy Aeroplan included terms that would waive contractual obligations (until 2020) they agreed to when Aeroplan was spun off.

So I'd say brace for devaluations of Aeroplan miles as soon as the deal completes. Air Canada will devalue Aeroplan miles as soon as they can (ie: 2020). Air Canada is known for being stingy/greedy and seeking to offer the minimum possible in terms of value and compensation to consumers often at the cost of negatively affecting customer recovery/satisfaction/loyalty. They are far from being like Alaska Airlines.
My predictions:
  1. AC will remove the whole 8% of every route, every month, guarantee for Aeroplan. AC wants to optimize for paid seats. Points redemptions on otherwise unfilled seats is basically free for them, unless you were otherwise going to pay cash for the ticket. Good luck using Aeroplan points (at fixed mileage redemptions) on popular/profitable routes in the near future. They can do this silently, and very profitably. Initially, AC will play with the numbers manually (change 8% to 2%), then set it dynamically. Aeroplan will become more of a game with continuously changing availability.
  2. Mild devaluation of points - 10-20%. e.g. 25k-->30k for redemptions.
  3. Aeroplan promos on new routes. Because new routes take time to get full loads, AC can directly appeal to Aeroplan members.
  4. Reservations taken over by AC call centre staff.
  5. Cancellation of the deals with Porter, Flair and Transat. My guess is that they weren't true agreements at all, just to create pressure. Aeroplan probably drafted a contract that says "We'll sell you Aeroplan miles for $0.0000001 starting 2020. Either party can break this agreement for $x million break-fee with 30 days notice, without any damages. Here's the only press release you're allowed to publish".
    1. Flair "CEO" : "Hey Aeroplan, I'd like that free money, but I only brought a bucket and mop. Can I borrow your pen?"
    2. Transat CEO: "I'd like that free money. My pen had a part that was 0.00005" too short and all the ink leaked out, can I borrow your pen?"
    3. Porter CEO: "I'd like that free money, where do I spill my pilsner?"
  6. Levelling the playing field with competitors and scamcharges. Either Lower AC scamcharges, or new charges for non-AC bookings. AC would be dumb to payout to other airlines what it could keep for itself.
  7. No idea if TD/CIBC will do anything different other than cement their current state. No clue what's in it for Visa, other than stopping Mastercard from getting in the Aeroplan game.
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Old Aug 22, 2018, 7:09 pm
  #558  
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I would give a good look at the UA program. Doesn't the Nasr guy come from there?
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Old Aug 22, 2018, 7:12 pm
  #559  
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Originally Posted by Stranger
I would give a good look at the UA program. Doesn't the Nasr guy come from there?

"Mark joined Air Canada in 2016 as Managing Director, eCommerce, Loyalty Programs and Ancillary Revenues, bringing more than 15 years of experience in the travel and hospitality industry across three continents. After starting his career in hotel operations at Hilton, Marriott and InterContinental properties, he joined the Continental Airlines management team in 2006, initially in Revenue Management and later leading the airlines first Ancillary Revenues practice. In 2010, he joined the new United management team after the Continental Airlines merger, first leading Merchandizing, then eCommerce, and finally, Corporate Development and Strategy."

https://www.thesummit.ca/speaker/mark-nasr/


His interview in Skift worth a re-read.

"Why Air Canada Is Starting From Scratch With Its Loyalty Program
Brian Sumers, Skift - Jan 31, 2018

https://skift.com/2018/01/31/why-air...yalty-program/

Interesting re-read his answer to "What data are you missing because you dont run your program?"
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Old Aug 22, 2018, 7:18 pm
  #560  
 
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Originally Posted by tecate55
My predictions:
  1. Levelling the playing field with competitors and scamcharges. Either Lower AC scamcharges, or new charges for non-AC bookings. AC would be dumb to payout to other airlines what it could keep for itself.
I thought the whole point and appeal of scamcharges was to encourage travellers to book elsewhere on the network and see the superior service they get thereby making them regret that AC is the only game in town (sorry the Skunk, WS and Transat aren't viable options if you're expecting on time performance). It's called loyalty

Safe travels,

James
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Old Aug 22, 2018, 7:37 pm
  #561  
 
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Originally Posted by 24left
"Mark joined Air Canada in 2016 as Managing Director, eCommerce, Loyalty Programs and Ancillary Revenues, bringing more than 15 years of experience in the travel and hospitality industry across three continents. After starting his career in hotel operations at Hilton, Marriott and InterContinental properties, he joined the Continental Airlines management team in 2006, initially in Revenue Management and later leading the airlines first Ancillary Revenues practice. In 2010, he joined the new United management team after the Continental Airlines merger, first leading Merchandizing, then eCommerce, and finally, Corporate Development and Strategy."

https://www.thesummit.ca/speaker/mark-nasr/


His interview in Skift worth a re-read.

"Why Air Canada Is Starting From Scratch With Its Loyalty Program
Brian Sumers, Skift - Jan 31, 2018

https://skift.com/2018/01/31/why-air...yalty-program/

Interesting re-read his answer to "What data are you missing because you dont run your program?"
He must be thinking of FT when he say this:

You shouldnt need a Ph.D. to be able to enjoy rewards. While incredibly complex programs might benefit a very small number of particularly highly engaged customers, we dont feel thats the right decision for the broader community.

He ignores the fact these "highly engaged customers" spend a lot of money with AC.
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Old Aug 22, 2018, 7:45 pm
  #562  
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Of course what he means is Aeroplan points can purchase any Air Canada ticket at a value of 1c per point.

Last edited by KenHamer; Aug 22, 2018 at 7:59 pm
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Old Aug 22, 2018, 7:56 pm
  #563  
 
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Originally Posted by mapleg
He must be thinking of FT when he say this:

You shouldnt need a Ph.D. to be able to enjoy rewards. While incredibly complex programs might benefit a very small number of particularly highly engaged customers, we dont feel thats the right decision for the broader community.

He ignores the fact these "highly engaged customers" spend a lot of money with AC.
He's absolutely wrong here! If anybody can redeem points for airline seats then they'll be no seats left for us elites. The last thing any SE wants is a kettle sitting beside them in Long haul J bragging how they got the seat for 50,000 Aeropesos and mailing in 6 specially marked packets of Highliner!

In fact it's obscure rules like the 2 free stopovers if you call Aeroplan are the type of things only members of FT will know! You should need to be a regular on FT, have an active subscription to EF and spend hours optimizing the routing and minimizing the scamcharges to use the program beyond simple merchandise redemptions!

If by simplicity it means removing these loopholes, Air Canada loyalty fees (I.e. scamcharges) and raising the number of points needed per redemption then count me out!

Safe Travels,

James
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Old Aug 22, 2018, 10:33 pm
  #564  
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Originally Posted by mapleg
He must be thinking of FT when he say this:

You shouldnt need a Ph.D. to be able to enjoy rewards. While incredibly complex programs might benefit a very small number of particularly highly engaged customers, we dont feel thats the right decision for the broader community.

He ignores the fact these "highly engaged customers" spend a lot of money with AC.
The complex rules benefit travel hackers and credit card churners too, who are far from being big profitable spenders 😈
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Old Aug 22, 2018, 11:12 pm
  #565  
 
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Originally Posted by Shareholder
Remember, AMEX is a Charge Card that requires full repayment each month. TD and CIBC Visas are Credit Cards, so balances can be carried (though not sure how many premium cardholders don't pay off their balance each month). AC/Aeroplan originally had AMEX as its Charge Card partner, and CIBC Visa as its Credit Card partner. When CIBC renewed its partnership first time around, it insisted that AMEX no longer allow Membership Rewards earned with its Platinum Credit Card (Optima) to be transferrable for Aeroplan miles. When the Credit Card partnership came up for renewal, Aeroplan opened it up and TD made a better offer than CIBC. Ultimately, TD agreed that rather than a sole Credit Card partner, Aeroplan could keep CIBC but only for those Visa cardholders who had other accounts with the bank. AMEX has had a long relationship with AC, so managed to get Aeroplan to agree to having a Charge Card partner in addition to a Credit Card partner. I don't see this changing ever with the more direct VISA involvement.

What isn't clear to me is just how the TD/CIBC/VISA involvement in the purchase will work if Aeroplan returns to being an AC division? If these three are putting up dollars towards the buy-back then they'd have some form of equity in the unit, which would be through AC. Unless their involvement is only to backstop the unredeemed mileage liability, and AC's putting up the actual cash. Or they're lending AC much of the money to do the buy-back.
Maybe TD/CIBC prepaid for a LOT of points.

Ron.

Last edited by newfbc; Aug 22, 2018 at 11:24 pm
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Old Aug 22, 2018, 11:22 pm
  #566  
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Originally Posted by 24left
.....Aeroplan closed their international call centre line and worse, they operate on non 24/7 hours in a 24/7 world. .

Well this sums it up nicely at 01:20 ET, but well within still-awake hours for those in other time zones.

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Old Aug 23, 2018, 12:40 am
  #567  
 
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Originally Posted by 24left
Well this sums it up nicely at 01:20 ET, but well within still-awake hours for those in other time zones.

I mean, they apologised 4 times across two langauges. What more do you want from them ?
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Old Aug 23, 2018, 1:11 am
  #568  
 
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Originally Posted by j2simpso
(sorry the Skunk, WS and Transat aren't viable options if you're expecting on time performance).
I always enjoy your posts, James, but this one just isn't true. WS consistently clobbers AC for on-time performance.

https://www.flightstats.com/company/...orts/airlines/
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Old Aug 23, 2018, 3:05 am
  #569  
 
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Originally Posted by MasterGeek

The complex rules benefit travel hackers and credit card churners too, who are far from being big profitable spenders 😈
True, but really, most Canadians can't even be bothered to figure out the most basic "hacks" on Aeroplan. Just read the comments any time there is a CBC article or similar. Most people have not even figured out you can book on other Star Alliance partners, never mind anything more complex than that.
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Old Aug 23, 2018, 3:24 am
  #570  
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Originally Posted by tecate55
My predictions:
  1. AC will remove the whole 8% of every route, every month, guarantee for Aeroplan. AC wants to optimize for paid seats. Points redemptions on otherwise unfilled seats is basically free for them, unless you were otherwise going to pay cash for the ticket. Good luck using Aeroplan points (at fixed mileage redemptions) on popular/profitable routes in the near future. They can do this silently, and very profitably. Initially, AC will play with the numbers manually (change 8% to 2%), then set it dynamically. Aeroplan will become more of a game with continuously changing availability.
  2. Mild devaluation of points - 10-20%. e.g. 25k-->30k for redemptions.
1. Why would you expect it to work any differently than any other program? Or are you saying that it will become more like those programs (such as UA MP).
2. Why would they devalue anything? Aeroplan used to get $X for the points, and then transfer $Y < $X to AC for the seats. By AC owning the program, they already get more money per redemption, so there would be no need to devalue anything.
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