Aimia reaches settlement in Aeroplan case
Aimia Inc. has agreed to settle a nine-year-old lawsuit over the expiry of Aeroplan mileage points and the closure of dormant Aeroplan accounts setting the stage for a return of points to eligible members of the loyalty program.
Aimia will deposit a set amount of Aeroplan miles into the accounts of eligible members if a court approves a settlement agreement announced Friday.
Details about who is eligible to receive the points, and other specific information, aren’t being made public at this time because the settlement is subject to approval by the Superior Court of Quebec, Aimia said.
Merchant Law Group launched the national class action in July 2009, nearly three years after Aimia announced in October 2006 that it would change the rules for accumulating and redeeming Aeroplan miles.
The suit took aim at Aeroplan’s decision to cancel Aeroplan miles if there’s no activity in a member’s account within a 12-month period, as well as its decision to cancel points if they’re not used within seven years of acquisition.
Aeroplan eliminated the seven-year expiry date for points in June 2013, but continues to cancel accounts if there’s no accumulation or redemption activity in the previous 12 months.
Aimia said Friday that the proposed class action agreement is a positive resolution for members and stakeholders.
Lawyer Tony Merchant said Friday in a phone interview that he’s optimistic that the Quebec court will hear the case in the month of September and reach a decision quickly.
The company has undertaken to do the work of finding which Aeroplan members are eligible for compensation, calculating how many points they are owed and depositing the points into the customer accounts, he said.
“In my view Aeroplan acted responsibly in settling in the manner that they’ve settled.” Merchant said. “This is a very recipient-friendly kind of settlement.”
Ryerson University associate professor Gabor Forgacs, who specializes in tourism, hospitality and branding, agreed.
“It doesn’t make good business sense to create some kind of animosity against your loyal customers.”
There’s also a significant portion of valid loyalty points that don’t get converted to airline tickets, he added.
“The customers never find the right opportunity, or forget about it or don’t keep the records. So, for whatever reason, you don’t have to limit it as a business because a lot of it goes to waste anyway.”
However, Forgacs said, consumers like to collect points - especially business travellers who can use them for family trips - and airlines have discovered that data collected from their customers can be tremendously valuable.
“If they can move the needle just a fraction as a result of being smarter, with all this data, that translates into millions of dollars,” Forgacs said.
Last week, Montreal-based Aimia signed a tentative deal to sell the Aeroplan loyalty program to an Air Canada-led group, which includes TD Bank, CIBC and Visa Canada Corp.
The consortium also agreed to assume about $1.9 billion in liabilities related to redeeming Aeroplan points after the current long-term deal with Aimia expires in July 2020.