Consumers win as Aeroplan duel ensues
Points plan battle takes off as TD, CIBC wrestle for customers
Travel rewards have been thrown into the spotlight as TD Bank and CIBC fight over Aeroplan, Canada’s richest travel program. What it means for consumers is that now may be a good time to shop around.
CIBC’s position as the primary credit card issuer for Aeroplan expires at the end of the year. The bank decided not to match an offer by TD Bank to become Aeroplan’s new credit card partner.
TD is set to take over Jan. 1, 2014, pending the outcome of negotiations over who’ll own the existing customers. At the same time, Aeroplan kicks off a new tiered recognition program that gives its members better access to flights. There are plenty of pain points for Aeroplan customers who want to use their miles. Fees and blackouts mean you can’t always cash in the points when you want them. The plan keeps changing the mileage needed for a free flight. For many customers, the big issue is the lack of choice when it comes to redeeming points — it’s Air Canada only.
“If you’re happy taking a red-eye and switching planes two or three times, then you can probably get good use out of your Aeroplan points, but it’s tough for those of us travelling with our family,” said Ian Haase, who lives in London, Ont., and has been an Aeroplan member for more than a decade.
The 34-year-old executive, who works with technology startups, also uses the CIBC Aerogold credit card to earn extra points. Haase has no trouble accumulating miles, but finds it hard to spend them. His main beef is that the limited number of Aeroplan seats set aside for rewards makes it difficult to find a flight.
He’ll often search on Air Canada and find flights — but then log into Aeroplan and the same flights aren’t there. Even when he finds a flight through Aeroplan, he’s irritated by the taxes and fees that aren’t covered. “I really don’t know what to do,” said Haase. For consumers, things should be clear by Aug. 26. That’s when they’ll find out if CIBC was successful in retaining half its Aerogold cardholders, the ones with deeper ties to the bank, while selling the other half of the portfolio to TD. TD will offer a lineup of Aeroplan Visa credit cards in the new year, each with different levels for earning and redeeming miles.
Here’s what else we know for sure: 1. Your CIBC cards accumulate points through Dec. 31.
2. Your miles are safe because they’re tied to the loyalty program, not a credit card issuer.
3. CIBC is waiving the annual fee on its cards and giving 15,000 bonus miles for new customers.
4. TD is offering 40,000 points (worth $200 in travel) if you sign up for its First Class Travel Infinite card before Sept. 13. The card comes with a $120 annual fee.
5. American Express is offering to waive the $150 annual fee on its American Express Gold Rewards card in the first year. 6. More deals are on the way. Now is a good time to re-evaluate your current travel rewards program. RBC thinks it’s in a good position to take advantage of the situation while the spotlight is on travel rewards.
Its Avion program allows you to fly at any time without blackout periods. At 15,000 points, you can get a short-haul flight — up to a $350 value — and you can convert your points to other programs like Shoppers Optimum, Esso Extra, WestJet Dollars and British Airways.
RBC Visa Infinite Avion also has happy customers. According to MLM and Maritz Research Canada’s 2013 loyalty report, it ranked first in overall satisfaction, ease of tracking points, and understanding how the program works.
“We have over one million cardholders in the Avion program, so to rank No.1for ease of use and customer satisfaction is encouraging,” said Linda Mantia, a vice-president at RBC. Those are the kinds of qualities Aeroplan looks to improve upon when it launches its new Distinction program in January. Bank research showed that loyalty program members value a simple and flexible plan which offers a wide range of rewards along with exclusive privileges for top collectors. “We’ve been listening to our members and their feedback has inspired major improvements that will transform the program,” said Christa Poole, a spokeswoman for Aimia, which owns Aeroplan. Aeroplan announced in June that it bowed to customer pressure and eliminated its rules that let unused miles expire after seven years. One other flexible program for earning and redeeming travel miles is Capital One’s Aspire Travel World MasterCard, which consistently ranks as the top travel rewards card on the popular Rewards Canada website. With its No Hassle Rewards program you can book the travel with any airline or hotel and then redeem your miles online. Because it’s not tied to any one airline or travel centre, you can often book better and cheaper flights to get the most out of your points. Brent Reynolds, vicepresident of credit at Capital One Canada, says consumers should be wary of short-term incentives designed to attract new business. “You might get a juicy sign-up bonus or get the annual card fee waived in the first year, but unless you plan on switching credit cards every year, you should really focus on the longterm benefits of the card,” said Reynolds in a phone interview.
Have your cake and eat it, too? That’s what makes the Aspire Travel World MasterCard stand out from the pack. You’ll get 35,000 points after your first purchase — good for $350 in travel — plus 10,000 points each year on your card anniversary. That essentially brings the $120 annual fee down to $20 per year.
Haase still carries his CIBC Aerogold Visa card but is weighing his options. The experience with Aeroplan has left him jaded.
In the meantime, he wants to use up those Aeroplan miles. Robb Engen blogs at Boomer & Echo. Reach him at robbengen@gmail.com.