Aug 21, 2018, 8:23 am
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
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
Update: Aimia accepts Air Canada, TD, CIBC & Visa revised $450-million Aeroplan bid
Aug 9, 2018, 10:28 am
#391
Join Date: Mar 2010
Location: Canada
Programs: *G
Posts: 2,304
Keep an eye on AC's job postings. If they were really going to spin something up internally, there would've already been a substantial amount of hiring along such lines. I haven't seen anything that remotely even resembles an effort to establish even so much as a management structure for developing a program. And I doubt AC could or even would be discreet about the whole thing, given their extensive obligations to their unionized workforce which usually includes publicly posting most jobs and negotiating with their unions accordingly.
Mark Nasr
Vice President, Loyalty and eCommerce"Mark Nasr was appointed Vice President, Loyalty and eCommerce in July, 2017. In this role, Mark has responsibility for developing the vision and strategies for Air Canada's all-new, digital first loyalty program to be launched in 2020.....Mark joined Air Canada in 2016 as Managing Director, eCommerce, Loyalty Programs and Ancillary Revenues."
Aug 9, 2018, 10:38 am
#392
FlyerTalk Evangelist
Join Date: Jun 2003
Location: YYC
Posts: 23,803
However that does not necessarily make it true. I am firmly convinced that the attempt by AC and the banks to buy AE was primarily addressing that very issue.
While there has to be some liability associated with the miles, the actual one (not necessarily the same as the one per accounting rules, if any), is clearly less for AC than for AE. At least as of the date of the divorce.
But now that the attempt to buy AE failed, AC and the banks may need to look at some plan B in that respect, if only in order not to lose too much buiness between now and the activation of the new AC FF program. Note that in effect in their offer, AC and the banks were not just taking that liability for free but actually paying for it, in the sense that the cash offered was more than the AE market capitalization value. What the that tell you? (Admittedly, the banks may have been chipping in too in that offer.)
Aug 9, 2018, 10:56 am
#393
Join Date: Oct 2013
Location: YEG
Programs: AC Lifetime SE100K, 3MM, SPG Lifetime Plat, Hertz PC, National Executive Elite
Posts: 2,901
Keep an eye on AC's job postings. If they were really going to spin something up internally, there would've already been a substantial amount of hiring along such lines. I haven't seen anything that remotely even resembles an effort to establish even so much as a management structure for developing a program. And I doubt AC could or even would be discreet about the whole thing, given their extensive obligations to their unionized workforce which usually includes publicly posting most jobs and negotiating with their unions accordingly.
I have never done this, and it is probably a pretty big task. I don't know how successful AC is going to be at having this up and running perfectly, by mid 2020. However, I don't think the sky is going to fall.
Aug 9, 2018, 11:43 am
#394
Join Date: Apr 2007
Location: Toronto, Ont., Canada
Programs: Aeroplan; Marriott Platinum; IHG Platinum; Best Western Diamond
Posts: 2,165
Regardless of the bid by AC group to buy ae, it is in AC and ae's best interest to find ways for people to want to continue flying AC and earning ae points, leading to June 2020 and beyond.
It was looking bleak for ae, but ae has shown some paths forward especially the very similar redemption rate, on supposed 20 airlines. OTOH, AC hasn't shown much, other than saying they are building a new program. AC needs to either ante up $450M, or show they have something concrete going forward.
There were some talk or rumors of AC having draft agreement with MC. Any more insights into that?
It was looking bleak for ae, but ae has shown some paths forward especially the very similar redemption rate, on supposed 20 airlines. OTOH, AC hasn't shown much, other than saying they are building a new program. AC needs to either ante up $450M, or show they have something concrete going forward.
There were some talk or rumors of AC having draft agreement with MC. Any more insights into that?
Aug 9, 2018, 4:34 pm
#395
Join Date: Oct 2008
Location: YYC
Posts: 4,035
Keep an eye on AC's job postings. If they were really going to spin something up internally, there would've already been a substantial amount of hiring along such lines. I haven't seen anything that remotely even resembles an effort to establish even so much as a management structure for developing a program. And I doubt AC could or even would be discreet about the whole thing, given their extensive obligations to their unionized workforce which usually includes publicly posting most jobs and negotiating with their unions accordingly.
Aug 9, 2018, 8:21 pm
#396
Join Date: Apr 2002
Location: YXE
Posts: 3,050
de
Where would they get the data to do any of this? They have their own internal data, but AC wouldn't even know if a person's AP balance was 0, or 1M+ points. Let alone what proportion of an account consists of unredeemed AP points derived from flight activities.
If/when the economy enters a recession, with a consumer spending downturn (most seats are flown these days for leisure, not business), as was seen in, for example, the early-mid 1990s, the early-mid 2000s, even 2008/2009, and revenue load factors fall into, say, the 60% range, it might be reasonable to allocate the bottom 20% percentile of seats, rather than only the bottom 8% (for instance). AP under AC's control allows them to modulate the redemption flow in such a way that is actually in line with AC's business and the current economic climate.
A handful of manager types does not make for a program for which, at the rate that a typical AC IT deployment works, pretty much would need to be pretty close to beta testing at this point to meet an actual 'go live' date of 2020. And it is still a major point of contention whether AC would even bother with a 'new program' if they could acquire AP. Officially, yes, but why bother with an acquisition if it were so easy to spin up a new program? Why throw the reputation the AP program has gained amongst Canadians away?
In this scenario, I think it is likely that they'll provide RDM based on BIS miles flown with AC (and possibly *A) for a certain period prior to the new program, and not miles earned via CC/Esso/HH/Etc. AC might also consider conversion of miles awarded by AC for things such as COS, Altitude mileage bonuses, EYW, etc.
The fact that my plan is to redeem as many miles as possible makes me wonder if AC stands to make more money by delaying any announcement as uncertainty may cause a large number of other people to use miles. It is widely believed that AC has made quite a bit of money by selling "valueless" seats to Aeroplan. If AC were to discretely increase award inventory (IIRC 8% is the minimum they need to allocate for awards), and there ends up being a run of people trying to cash in, could AC increase its revenue (and force AE to pay out some of the $2B liability)? I don't know if AC is better off allocating more award seats (i.e. getting some more money for the next batch of seats above the 8% that are less likely to be sold) or relying on market fares (since this would take a seat out of regular revenue inventory); just speculation on my part.
Whether they buy AP or not, they are launching a new program in 2020.
A handful of manager types does not make for a program for which, at the rate that a typical AC IT deployment works, pretty much would need to be pretty close to beta testing at this point to meet an actual 'go live' date of 2020. And it is still a major point of contention whether AC would even bother with a 'new program' if they could acquire AP. Officially, yes, but why bother with an acquisition if it were so easy to spin up a new program? Why throw the reputation the AP program has gained amongst Canadians away?
Aug 9, 2018, 9:35 pm
#398
Join Date: Jan 2016
Location: YYZ
Programs: Only J via Peasant Points, 777HDPeasant or The Unexpected Virtue of Ignorance and Narcissism.
Posts: 5,951
Lmao dkm
There's nothing like outsource your business critical process to these consulting firms that relies on follow-up work
I can never forget that Deloitte Digital in Canada proudly advertise the supposedly great work on the EQ Bank app, an app that currently have an avg score of 2/5 on Google Play..
There's nothing like outsource your business critical process to these consulting firms that relies on follow-up work
I can never forget that Deloitte Digital in Canada proudly advertise the supposedly great work on the EQ Bank app, an app that currently have an avg score of 2/5 on Google Play..
Aug 9, 2018, 9:46 pm
#399
Join Date: Dec 2006
Location: YEG
Posts: 3,925
Would they do this? Who knows, it’s just speculation based on whether AC is concerned about people flying with others for fear of orphaning miles.
Aug 10, 2018, 8:45 am
#400
Join Date: Jun 2004
Location: I'm From Here
Programs: AC*SE & MM/*Wood Gold/HHonors Diamond/Marriott Silver/AirMiles Gold
Posts: 4,567
In my scenario the actual Aeroplan mileage balance and potential calculations for pro-rating, etc. are irrelevant - the miles awarded by AC would be bonus miles for startup of new program, not a transfer of miles from Aeroplan. Upthread there was mention of an interview where someone at AC said something to the effect that bonus miles in the new program would be awarded based on pre-2020 flying. IMHO it would be very easy for AC to award bonus Altitude 2.0 miles based on AQM earned in the year(s) up to 2020 (either 100% or a portion thereof). As AC also knows what miles they awarded for promotions, top tier bonuses, etc. those AC based non-AQM miles could facto into the calculation too.
Would they do this? Who knows, it’s just speculation based on whether AC is concerned about people flying with others for fear of orphaning miles.
I cannot imagine they would do that. That would be 6x YYZ-SYD to get enough miles for an over ocean redemption in J (assuming the same 'rules' will apply).
I have to imagine they are going to let everyone start with a balance but who knows. Given we are less than two years away, it would be nice to get some idea of what to expect
Aug 10, 2018, 3:50 pm
#401
Join Date: Apr 2009
Location: YYC / random hotel in YYZ
Programs: Back of the bus
Posts: 922
Banks don't like losing their cash cows. I highly doubt we see the current banks on the deal walk away.
AC will come back and buy somewhere around $400 million. Points will be brought back over. AC will then devalue the redemption chart. Win win for AC, lose lose for everyone else.
AC will come back and buy somewhere around $400 million. Points will be brought back over. AC will then devalue the redemption chart. Win win for AC, lose lose for everyone else.
Aug 10, 2018, 4:14 pm
#402
Join Date: Apr 2007
Location: Toronto, Ont., Canada
Programs: Aeroplan; Marriott Platinum; IHG Platinum; Best Western Diamond
Posts: 2,165
AC may need to pay the breakup fees to Porter, Flair, and AT. They'll scrap the development of their own FFP.
AC will drastically increases the scamcharges, while reducing the redemption seats to 2% per route. AC execs will laugh at the huge bonuses they get.
AC will drastically increases the scamcharges, while reducing the redemption seats to 2% per route. AC execs will laugh at the huge bonuses they get.
Aug 10, 2018, 4:50 pm
#403
Join Date: Dec 2006
Location: YEG
Posts: 3,925
Not necessarily. IIRC AC only ever said they'd buy the Aeroplan program and allow conversion of miles to the new AC program. AC could conceivably keep running Aeroplan as a parallel program since there are existing partnerships with many other companies that have contracts that expire at different times. If that were to happen a couple other scenarios could play out: 1) AC would view the new partnerships as a liability that would prevent them from raising the price further or 2) if AC takes over control of Aeroplan Porter/Flair/AT could walk away and pay a breakup fee to AC/Aeroplan (although there is likely an escape clause for those 3 carriers in the event of AC taking over AE).
Aug 10, 2018, 6:36 pm
#404
FlyerTalk Evangelist
Join Date: Jun 2003
Location: YYC
Posts: 23,803
Another article in the Globe. Relationship between TB and Aimia souring?
https://www.theglobeandmail.com/busi...-takeover-bid/
OTOH insiders at Aimia buying stock on the belief that apparently AC will sweeten the bid.
https://www.theglobeandmail.com/inve...a-stock-flies/
https://www.theglobeandmail.com/busi...-takeover-bid/
OTOH insiders at Aimia buying stock on the belief that apparently AC will sweeten the bid.
https://www.theglobeandmail.com/inve...a-stock-flies/
Aug 10, 2018, 11:18 pm
#405
Join Date: Mar 2005
Location: YVR
Programs: AC SE, HH Gold, Marriott Titanium, National EE, Sixt Platinum, Hertz PC, AVIS PC
Posts: 1,910
Another article in the Globe. Relationship between TB and Aimia souring?
https://www.theglobeandmail.com/busi...-takeover-bid/
https://www.theglobeandmail.com/busi...-takeover-bid/
National Bank Financial analyst Gabriel Dechaine estimates the program now delivers $400-million in profit to TD and CIBC combined.
I assume that's annually. If that's the case, they, along with AC should have no problem going to $450 million.
Ron.