TEST OF LOYALTY
Details sketchy about Air Canada’s proposed rewards plan,
I collect Aeroplan points and hope to use them for a trip to Australia. But my 176,000 points will cover only one Air Canada return flight to that far-off destination.
My husband, who has no points card, will fork out cash for his flight.
I’m disappointed, especially after hearing that Air Canada will start its own loyalty plan in mid-2020 and may sever all ties with Aimia.
Can we use our Aeroplan points to book Air Canada flights after the divorce becomes final? What about airline flights operated by the Star Alliance, of which Air Canada is a member?
Definitive answers are lacking. The May 11 announcement seemed both premature and legally necessary since both Aeroplan’s parent (Aimia) and Air Canada are listed on the Toronto Stock Exchange.
If you check into Aeroplan’s Facebook page, you find collectors asking whether their points will have value after 2020 and vague assurances from a company with few answers to provide.
“Aeroplan is committed to preserving a high value redemption proposition for its members, including travel and flight rewards with industry leaders. We look forward to providing you with more details at the earliest possible time,” says a typical reply on Facebook.
In other words, keep collecting and cashing in your points as usual. Meanwhile, details of deals available in 2020 will dribble out slowly.
Kevin O’Brien, Aeroplan’s chief commercial officer, puts on a brave face in an interview. The split with Air Canada is a reinvention opportunity, he says, offering a chance to sign up other airlines. (I vote for WestJet.)
“The bulk of our members use their points for flights in North America, not Australia,” he tells me after I open up about my Aussie obsession.
But does it make sense to use hard-earned points for local flights?
My husband and I flew from Toronto to Los Angeles on Air Canada in early May. Our two return flights cost just over $800, a great deal considering the distance travelled.
Using points for those L.A. flights would have exposed us to an array of fees and surcharges, representing about half the cost of the cash fare.
About a year ago, Aeroplan allowed collectors to use points to pay for fees and surcharges. This preserves the illusion of free flights while shrinking the stash.
“Keep in mind that the miles haven’t cost you any- thing,” O’Brien says to explain why members don’t mind cashing them in for local flights.
You earn Aeroplan points from retailers keen to build their businesses and banks that offer co-branded cards (TD, CIBC and American Express). They are a byproduct of purchases you make and credit cards that let you defer payments while enjoying the use of a bank’s money.
Aeroplan’s five million active members redeem their points on average once every two years, the company says. Most of the rewards they pick are for flights.
Am I in a minority? As an Aeroplan member since 1987, I’ve redeemed points for flights maybe six times (or once every five years). About five years ago, CIBC offered free flights to Orlando for Aerogold credit card customers and reserved an entire Air Canada plane for us. All I had to do was reply to an email, an amazingly easy process.
Here’s what I think as a long-time Aeroplan member:
Collecting points is easy. Watching them grow is satisfying. But cashing them in for flights can be frustrating. The lack of choice and difficulty in reaching a live agent can make you miserable.
Communication is poor and personal pitches are non-existent. I rarely hear anything and rarely log into my account. Aeroplan should make an effort to find out what I want and send meaningful reminders about what I could do with my points.
Rewriting the rules every few years reduces customer loyalty. Aeroplan imposed a seven-year expiry date for points and backed off. It imposed a harsh bereavement policy and modified it after protests. No wonder people are upset to hear about the break with Air Canada.
Cutting off inactive members without notice is unfair. Aeroplan has a policy of cancelling points if your account is dor- mant in a one-year period. But instead of calling or sending mail to inactive members, it often uses older email addresses that are obsolete.
Bond Brand Loyalty, a market research agency, did a survey of 28,000 consumers in Canada and the United States about loyalty programs. The results were fascinating:
More than one-quarter of program members have never redeemed.
More than half of members do not know their points balance.
Four in 10 members are unaware of the value of their points.
An estimated $16 billion worth of loyalty points are yet to be redeemed in Canada.
“Programs could be doing a much more effective job of engaging members and driving redemption behaviour,” the study concludes. Ellen Roseman appears weekly in Smart Money. Email eroseman@thestar.ca.