With special guest Rupert Duchesne (President, Air Canada Aeroplan).
Randy Petersen
Tonight I'd like to welcome everybody back to FlyerTalk Live!, our monthly event where we invite the executives that run frequent traveler programs around the world to come and chat directly with their members. This program is now in its second year and we've had the distinct pleasure of featuring some very special guests.
Randy Petersen
Tonight's guest, Rupert Duchesne (President, Air Canada Aeroplan) has become one of my favorites. He was with us within the last two months amid some major changes to the Aeroplan program and what I liked is that he welcomed the opportunity to hear and chat with the members of his program: a real public appearance. What was of equal importance is that he wanted to return shortly to give you all a progress report on his efforts coming from your feedback, including, I believe, meeting with a contingent of FlyerTalkers. Bottom line for me: Rupert is a man of his words and I'm very pleased to welcome him back.
Rupert Duchesne
I'm glad to be back (I think!) and hope that we can cover a lot of ground in the hour
Mikel at WebFlyer
Rupert-how about offering the option of Elite members using upgrades on discounted fares; your Y/M restriction is not competitive with US airlines. I was not able to use ANY of my Prestige upgrades last year!
Rupert Duchesne
We know that we're not competitive in some areas which is why we've said we'll look at changes for 03 and also cost out day-of upgrades
Mikel at WebFlyer
This question was submitted earlier by StuMcIlwain: Why did Air Canada reduce the seat pitch only in the "preferred seating" section of their A320 and 767-200 Y cabins, the section reserved for Aeroplan status members?
Rupert Duchesne
We didn't: the cabins in both aircraft were standardized at 32 except for exit rows which have 1 inch less on A320s. However, some of our members do like those rows and we can't move seats in this area which is unfortunate TQ
Dan at WebFlyer
Any plans to reintroduce attaboy cards we can give to staff when we do get good service? Something more meaningful to the employee than an entry in a draw?
Rupert Duchesne
Everyone likes these and because of the new privacy laws we need a different process - I'd like to see these for 2003. By the way our lights have gone out so we're doing this by the glow of one screen! TQ
Can Air Canada consider letting us upgrade at the gate if there are any seats available using double number of certs while Aeroplan tries to develop a new upgrade policy?
Rupert Duchesne
We're looking at all options as our national focus groups identify this as the #1 benefit TQ
Mikel at WebFlyer
This question was submitted earlier by airbus320: Given recent customer feedback, will AC allow more eligible fares for upgrade at the gate?
Rupert Duchesne
If we can do gate upgrades it would be most likely by status not fare type TQ
Mikel at WebFlyer
This question was submitted earlier by E Chen: I understand the AC is not longer offering Aeroplan miles for TravelCuts Z fares because the Z fare code is used on many types of heavily discounted fares. Could AC create a new student subclass (i.e. S class) for TravelCuts tickets in order to retain students' loyalty? On a recent trip between YYZ to YVR, I spent $501 on a TravelCuts ticket. Meanwhile, AC also offered a L class ticket at $543 for the same flights. I don't really see the $40 difference to be a student discount, but merely as the savings of not giving out Aeroplan miles (1036 miles x 2 x $0.02 = $41.44).
Rupert Duchesne
This is too broad a fare bucket as I said last time and there are fares sold much lower than TravelCuts so we can't make it work TQ
Has AC considered an upgrade product for other Star Alliance members (such as LH has with UA for a UA mileage redemption)?
Rupert Duchesne
Star knows that members want cross-upgrades and will build this into its planning process TQ
What % kickback does Aeroplan (or Air Canada) get from Diners Club and/or Visa Aerogold? I wonder what I am paying for the "free" tickets. I have lots of "miles" but no "Status", which I assume comes only from actually flying. It strikes me that you get as much benefit from my spending as from those earned flying.
Rupert Duchesne
That's confidential but without the revenue we earn from our non-air partners we couldn't afford to offer many of the benefits we do which is why we'll grow non-air (providing we can provide more redemption seats or alternative redemption options at the same rate of growth TQ
Mikel at WebFlyer
This question was submitted earlier by Shareholder: Both UA and AA now permit their RCC and AC members to use the lounges when they are not flying. By showing a membership card and ID, they can receive a pass and clear security to use the airside lounges to meet friends, etc. This was a benefit of SE status until 9.11, when it was withdrawn for "security" reasons. Since there appears to be no concern at US airports, when will AC reinstate this benefit for SEs?
Rupert Duchesne
We will not re-introduce this because of the heavy labour component in escorting etc TQ
Will Air Canada reconsider the same-day standby policy and let status members standby for flights on any fare?
Rupert Duchesne
I'm sorry, but no - this policy has helped both AC's airport processes and inventory management to make sure that premium-fare paying customers get seats on peak flights. It's based on a philosophy of sticking to the integrity of the fare conditions tht=at the passenger has paid for and whilst we do make exceptions because of operational imperatives, we'll not go back on this TQ
Mikel at WebFlyer
This question was submitted earlier by airbus320: Aeroplan basic members report long waiting times to speak to an agent. What is Aeroplan doing to improve access to an Aeroplan agent?
Rupert Duchesne
We've hired more than 500 agents since the start of 2001 and it's getting better every week. Unfortunately at the moment 20% of our telephone staff are working reduced hours because of AC's overall cost pressures. When we introduce the new web product we expect this to take much of the load off the call center which means that Basic will get good service (by the way the tier members always get quite quick answering TQ
Will you lift the blackouts for reward travel as UA has recently.
Rupert Duchesne
We will be reducing blackouts - watch this space - coming to a theatre near you soon! TQ
jet lag
Rupert, I believe I'm a high yield customer ($50k to $100k annual on J and Y tickets). So far this year I've spent ZERO on AC - largely due to aeroplan changes. My question: what assurances can you give me that SE benefits for 2003 will not be cut even further? It just seems fundamentally unfair that notice of changes is not given until after the earning period.
Rupert Duchesne
The whole industry works this way but I've committed to announce the 2003 program earlier. At the same time, I don't know now what events the industry will face in six months and would be irresponsible if I made this commitment, BUT I hope to do the reverse and add attractive program features (from AC and Aeroplan) for all members over the next nine months. We will (for sure) be researching with members any changes to avoid the kind of upset we had this year TQ
observer
Your response during your last visit to the charge for change fees for top tier members did not really get answered. Why are these members charged fees for date changes, only? They are not holding extra inventory, and are subject to the space being available just like any other member (or risk the double point charge).
Rupert Duchesne
To maintain fast top-tier service levels we need to compensate for the often very frequent changes many Es and SEs used to make. Most service businesses charge "convenience" fees - often very steep such as a $15 fee to book $50 theatre tickets online - and our industry is going that way as it realizes that we can't lose billions ad infinitum TQ
rad456
There was talk of Aeroplan being a separate operational arm of AC and expanding the offerings , much like Airmiles. The main addition has been Future Shop so far, are there still more expansion plans?
Rupert Duchesne
We are now a 100% AC owned full subsidiary and we are actively working on expanding both ways to earn and burn miles as most members want this breadth to be a feature of Aeroplan - it will also allow us to buy more redemption seats on AC, Star and other carriers TQ
Randy Petersen
I hope you all don't mind if i butt in here and chat with Rupert for a few minutes? Rupert, I understand you met recently with various members of Aeroplan to chat about the direction of the program and these meetings included a contingent from FlyerTalk. How did those meetings go?
Rupert Duchesne
We did focus groups in YVR, YYZ, and YUL as well as a dedicated group in MTL from Flyertalk. We really learnt first hand about some issues that only mileage hounds pick up and it will help us do the right thing going forward. We also found that many members needs within a given tier conflict. Some Elites want exactly the opposite of others and we've got to design the tiers around something for everyone and make sure that on balance they're better than average vs our global top ten peers TQ
Randy Petersen
One of the hot topics of late among programs has been "pooling" allowing non-related members to add miles into their programs with a simple transfer. Just as a curiosity, what are your own thoughts of this as a possible trend in the industry?
Rupert Duchesne
If both we and the member benefit from "rescuing" such orphan miles - which Aeroplan members can do through points.com - then we will encourage this trend. Naturally the more powerful programs will attract an inflow which is not good if you're program is perceived to be weak. We're seeing an inflow right now TQ
Randy Petersen
And finally, there has always been talk that programs would introduce more program benefits but on a fee-based system, similar to the way that credit card companies add benefits for a fee. Any thoughts on that as a possible direction for the industry? Obviously these benefits would be less driven by elite status and more on a member appeal. Again, any thoughts on this topic?
Rupert Duchesne
This is breakthrough thinking but will only work if the member perceives higher value. I'm sure that the airlines will continue to offer meaningful status benefits but we will add (as airlines and loyalty cos) other attractive fee-based services or products. We may also charge (as we are doing for changes) for low-value-added services that cost us a lot to deliver so that we can re-invest in stuff that matters TQ
Randy Petersen
Now, back to the program... and I still think it very, very cool that Rupert has taken time out to appear on FlyerTalk Live! twice in a row.
ACDUDE
I work for AC and I heard that we will have electronic upgrades for '03. Any truth to this and how is it going to work for our members? Thanx and you're doing great job
Rupert Duchesne
We have IT program specs for an electronic bank of upgrades vs paper - it's better and more flexible for members and more fraud resistant for us BUT it will cost a lot to do (but can be justified). The bigger problem is making it work in a multi-code/codeshare environment with our Star partners. I don't want to spend the money twice! TQ
Fisch
Has the errorplan.com site impacted at all on Air Canada's perception of it's customers?
Rupert Duchesne
We read it but so few of the comments are constructive that it doesn't help much. We find flyertalk a real help in terms of leading edge thinking. It's pretty obvious that if you attack people anonymously just for your own fun, they're not going to give you much credibility - so few of the really offensive complainers actually engage in an honest dialogue and those of you who have know that we're listening and will enter constructive debate as we should. Also it's great to quote out of context, but not particularly honest? TQ
Mikel at WebFlyer
This question was submitted earlier by StuMcIlwain: Since the Tango brand is expanding and will replace some mainline flights and routes this summer, are there any plans to award status miles for Tango flights?
Rupert Duchesne
Stu: not right now. Tango's been a great success and as it develops we'll review the policy. TQ
Mikel at WebFlyer
This question was submitted earlier by Empress: Does Air Canada offer lifetime status for accumulating certain number of miles? If so, what are the requirements?
Rupert Duchesne
No we don't but lifetime value is a critical determinant of sustained profitability and we know that it's a needed program feature to acknowledge continued support as the members career develops and flying patterns change year-to-year so stay tuned TQ
CPwingwalker
Any updates on the launch date for the new website? will it include capability to book upgradeably fare class so we don't tie up live AC agents?
Rupert Duchesne
Date is "soon" and will not do upgrades on revenue tickets which is a feature we know people want from the AC revenue booking site TQ
dillonsrock
Can you tell us anything about the decision to stay with the customer tracking program AC currently uses as opposed to the system/program that Canadian Airlines was using? I understand the CP version was already upgraded past the point the of current one.
Rupert Duchesne
If you're talking about the FFP program management software, the CP system was better than AC's in some areas and worse in others. We know which parts we want to build into AC's - such as a charity program - and this will be a part of the system re-write I reffered to in my previous chat TQ
Mikel at WebFlyer
This question was submitted earlier by StuMcIlwain: If Aeroplan Elite members are no longer allowed to bring in one free guest into the Maple Leaf Lounges due to overcrowding, why is Air Canada now selling access to the lounges to anyone willing to pay for it? Won't that make the lounges more crowded?
Rupert Duchesne
These buyers don't fly often and so don't crowd the lounge but help subsidize the average U$14 per visit that it costs per entry TQ
Mikel at WebFlyer
This question was submitted earlier by StuMcIlwain: Rather than charging Elites 200% of the award level to waive capacity controls, would you consider allowing Elites to convert revenue seats to award seats from, say, the V or H fare buckets? That would protect AC's full fare revenue while giving Elites better access to awards.
Rupert Duchesne
We will be doing this at a future point but it requires massive system programming changes - I'd like it to be in place before year end TQ
Empress
Rupert - are there any bonus Q miles promotion coming up?
Rupert Duchesne
Hey, secrets are secrets!
Mikel at WebFlyer
This question was submitted earlier by Shareholder: Given limited fares eligible for upgrading, when will the AC web booking engine permit reservations to be made by selecting these specific fares? At the present time, these fares can only be made through telephone reservations, which takes up needless agent time on simple return bookings. And the need to call in to confirm an upgrade also ties up res agent time. Are not these aspects of the program counter productive in that they tie up agents on transactions that could be handled over the web? Why cannot upgrade requests be entered into the original reservation, and automatically processed at the appropriate time window, as waitlists are now processed?
Rupert Duchesne
They may be labour intensive but they preserve revenue seats for the later-booking passenger; obviously we'd like to do these transactions on the web.
Rad456
Any chance of bringing California back in the Short Haul Rewards? I believe Canadian had it.. Also, any plans for one way rewards at a lower mileage amount?
Rupert Duchesne
No, our 15,000 shorthaul is a big bonus vs US programs even with a different earning structure and much better than competing non-FFP programs. One way rewards are coming in the very near future TQ
Randy Petersen
As I've come to expect from the Air Canada contingent - another great session with good questions and answers I can appreciate. Rupert, you are the man. May we leave you with an open invitation to return anytime you want to talk about Aeroplan and the topic of miles. Your members are an important part of FlyerTalk and I know that while they have really hounded you - it's because they truly want you to be the best program in the world, both for them and for Air Canada. Ahhhhh, and one more thing - congratulations for having the two best hockey teams in the world. During the Olympics, we all became Canadian. Continued success. Remember, transcript for those you know who have missed this session will be available tomorrow afternoon. Good night all and again, many, many thanks to Rupert.
Rupert Duchesne
Thanks everyone, sorry not to get to all questions