Aeroplan

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Aeroplan Inc.
Type Public
Traded as TSXAIM
Industry Marketing/Consumer Discretionary
Headquarters Montreal, Quebec, Canada
Area served 1942
Key people Kevin O'Brien (Chief Commercial Officer, Aeroplan), Vince Timpano (President and CEO of Aimia in Canada), Rupert Duschene (Group Chief Executive of Aimia)
Website www.aimia.com
www.aeroplan.com

Aeroplan is a coalition loyalty program [1] owned by Aimia, a global loyalty management company. The Aeroplan program was created in July 1984 by Air Canada as an incentive program for its frequent flyer customers. There are approximately 4.6 million active members in the program.[2]

In recent years, Aeroplan has evolved into a loyalty marketing program with retail partners such as Esso, Home Hardware, Birks, Sobeys, Thrifty Foods, Nestle Canada and others. Aeroplan is also used by Air Creebec, Canadian North, Calm Air, and First Air.[3] Internally, Aeroplan has deployed the MicroStrategy platform for business intelligence reporting and analytics for its personnel to analyze member information, track purchasing patterns, identify profiles of loyal members, and align its loyalty program with members’ preferences.[4]

Many Aeroplan members collect miles via credit cards. Credit cards were originally allocated to CIBC and Diners Club/enRoute, but it was later offered to AMEX Bank of Canada, while Diners Club withdrew from the program.[4] (The contract with CIBC is set to expire at the end of 2013, and Aimia has announced it intends to begin a new partnership as to credit cards with Toronto-Dominion Bank, as of January 1, 2014.[5])

In 2012, approximately 2.3 million rewards were issued to members including more than 1.6 million flights on Air Canada and/or other Star Alliance carriers which offer travel to more than 1,000 destinations worldwide.

Corporate history[edit]

When it was created in 1984, Aeroplan program's operations were fully integrated with those of Air Canada. In 2002, Aeroplan was spun off as a wholly owned subsidiary of Air Canada.

In June 2005, Air Canada's parent company ACE Aviation Holdings sold 12.5% of Aeroplan for $250 million through an initial public offering creating the world's first publicly traded loyalty program - Aeroplan Income Fund.

On December 20, 2007, Aeroplan Income Fund acquired Loyalty Management Group, a loyalty marketing and customer driven insight and analysis business that owns and operates Nectar, the UK's leading coalition loyalty program.

On May 28, 2008, ACE Aviation Holdings disposed of its remaining holdings in the fund.[6] As such the Aeroplan program is no longer under direct control of Air Canada.

The corporate name was changed to Aimia in order to “reflect the fact that the program has grown and diversified into a comprehensive customer loyalty program with hundreds of participating retailers.”[7]

Competition[edit]

Aeroplan faces competition from many sources, including other airline reward programs (within Star Alliance even), various bank-affiliated credit-card loyalty plans, and the Air Miles program.

Mileage Expiration[edit]

Aeroplan points do not expire, so long as at least one qualifying transaction is made before one full year has elapsed. [8]


Class action lawsuit[edit]

When miles expire, Aeroplan offers to restore the miles for a fee of $30 plus $0.01 per mile, which in some instances has resulted in charges of several thousand dollars for high mileage members. Members have argued that Aeroplan had already been paid for the miles through the selling partner by virtue of the retail pricing and by fees charged for certain collector credit cards. As a result, on many blogs, members were upset that their miles emptied from their accounts.[9][10]

As Aeroplan refused to give the miles back, a class action lawsuit [11][12] was undertaken by Montreal lawyer Owen Falquero of Merchant Law Group LLP.[13]

On August 3, 2009 the Quebec Superior Court granted authorization to launch a class-action lawsuit challenging Groupe Aeroplan Inc.’s practice of cancelling points accumulated in its loyalty program. The motion, obtained by Montreal lawyer Owen Falquero of Merchant Law Group LLP, was filed on behalf of about seven plaintiffs across Canada however many thousands of petitioners have registered for membership in the Class. The motion was filed formally on behalf of Noella Neale of Port Coquitlam, B.C., a single mother whose 150,000 points were annulled by Aeroplan because she hadn’t made a contribution or a redemption in her account for one year, a period during which she had fallen ill. Those points fell victim to Aeroplan’s rules, under which the company erases points in an account dormant for 12 months. In a telephone interview, Neale said she was going to pay for her daughter’s trip to New Zealand — her graduation gift — until she tried to pay from her account and saw that it had been emptied. Aeroplan spokeswoman JoAnne Hayes declined to comment on the issue because it is now before the courts. In a statement, Aeroplan noted that “no class action has yet been filed. This motion is the first procedural step before any such action can be instituted.” The company noted that “petitioners (are) seek(ing) court permission to sue Aeroplan on behalf of program members in Canada to obtain reinstatement of expired miles, reimbursement of any amounts already expended by Aeroplan members to reinstate their expired miles, $50 in compensatory damages and an undetermined amount in exemplary damages on behalf of each class member, all in relation to changes made to the Aeroplan program concerning accumulation and expiry of Aeroplan Miles as announced Oct. 16th, 2006.” But Aeroplan stressed that it “is of the view that there are good grounds for opposing the motion for authorization and will vigorously defend any class action, should one be authorized by the court.” Neale said: “I felt like they stole from me.” “If the bank took my money like that, it would be theft. I earned those points. They belong to me, and (Aeroplan) has no right to take them away from me.”

Air Canada Membership levels and numbers[edit]

There are 4 levels of membership in Air Canada's Altitude Program: Basic, Prestige, Elite, and Super Elite; the latter three are called "Top Tier" membership levels. These Top Tier levels provide travel benefits such as upgrades, lounge access, priority services (e.g. check-in, luggage handling), bonuses when earning miles through air travel, and more. In order to qualify for one of the three Top Tier levels, the member must earn a certain number of "status miles" or fly a certain number of "status segments" in a given calendar year (thus qualifying that member for the next benefit year). Prestige members and Altitude Elite 35 K receive Star Alliance Silver status while Elite 50K, Elite 75 K and Super Elite members receive Star Alliance Gold status.

As of January 16, 2006, there were approximately 4.9 million Basic members, 57,000 Prestige members, 68,000 Elite members and 9,000 Super Elite members.[citation needed]

Air Canada Status Miles are calculated on an annual basis (January 1 to December 31) to determine Altitude Membership Status for the following benefit year (March 1 to February 28).

Air Canada Top-Tier Status Prior to 2013[edit]

  • Air Canada Prestige: 25,000 Aeroplan Status Miles or 25 Status Flight Segments
  • Air Canada Elite: 35,000 Aeroplan Status Miles or 35 Status Flight Segments
  • Air Canada Super Elite: 100,000 Aeroplan Status Miles or 95 Status Flight Segments

2013 Top Tier changes[edit]

Air Canada redesigned membership levels and qualifications in 2013. The Elite level previously at 35,000 Aeroplan Status Miles or 35 Status Flight Segments was changed to 50,000 Aeroplan Status Miles or 50 Status Flight Segments.[14] New levels at 35,000 Status miles or 35 segments and 75,000 Status Miles or 75 segments were introduced. The Super Elite level is unchanged from previous levels.

  • Altitude Prestige: 25,000 Aeroplan Status Miles or 25 Status Flight Segments
  • Altitude Elite 35K: 35,000 Aeroplan Status Miles or 35 Status Flight Segments
  • Altitude Elite 50K: 50,000 Aeroplan Status Miles or 50 Status Flight Segments
  • Altitude Elite 75K: 75,000 Aeroplan Status Miles or 75 Status Flight Segments
  • Altitude Super Elite: 100,000 Aeroplan Status Miles or 95 Status Flight Segments

Earn miles[edit]

1. Earn Aeroplan Miles with Air Canada[15]

For travel on flights within Canada and between Canada and the Continental U.S.A. (including Hawaii), 25% of miles flown will be earned for Tango Class, 100% of miles flown will be earned for Tango Plus and Executive Class Lowest and 150% of miles flown will be earned for Executive Class Flexible.

For travel on flights for all other destinations worldwide, 100% of miles flown will be earned for Tango Plus, 125% for Executive Class Lowest and 150% for Executive Class Flexible.

2. Earn Aeroplan Miles when booking from AirCanada.com[16]

Earn up to 1 Aeroplan Mile for every dollar spent when you purchase an eligible ticket at aircanada.com (Canadian and U.S. Edition only).

Earn 1 Aeroplan mile for every 3 dollars spent when you purchase an eligible Flight Pass at aircanada.com (Canadian and U.S. Edition only).

3. Other partners[17]

Aeroplan miles can be used to redeem flights on Air Canada as well as partner airlines. Air Canada is part of the Star Alliance which is a group of airlines who co-operate with each other to expand the offerings of each individual airline. There are 28 members of the Star Alliance. When it comes to redeeming awards, they are redeemable for awards on any one of these airlines. Each flight will have a certain number of “award seats” available to be used for award redemption.

Airline partners[edit]

A full listing of partners can be found at.[17]

Fully integrated airline partners[edit]

Star Alliance partner airlines[edit]

Other partners[edit]

June 2013 announcements[edit]

On June 27, 2013, it was announced that Aimia had signed a conditional agreement with Toronto-Dominion Bank (TD) to become a credit-card partner as of January 1, 2014, and Aimia would seek to terminate its decades-long relationship with CIBC.[5][19][20] After the announcement, Aimia's stock rose by 11 percent.[5]

In response, CIBC suggested that Aimia was attempting to nullify CIBC's right of first refusal.[21] CIBC had already been hinting that it was dissatisfied with its arrangement with Aeroplan, and might start its own loyalty program.[22]

Aimia's conditional deal with TD would last ten years, and involve an upfront payment of $100 million. Aimia said that CIBC has until August 9, 2013, to exercise its right of first refusal by matching the terms of the proposed TD contract.[20]

In another announcement, Aimia cancelled Aeroplan's "seven-year mileage redemption policy".[23] The policy had originally come into effect at the beginning of 2007, and provided that all miles would expire if unused after seven years, with the accumulated mileage of all customers as of January 1, 2007, expiring at the end of 2013. Aimia CEO Rupert Duchesne told Bloomberg news service that people had been worried there would be a run on Aimia's cash flow in 2013, but cancelling the seven-year expiration policy removes that worry.[5]

In addition, on June 27th, Aeroplan announced the launch of Distinction, a new tiered recognition program that rewards top accumulating members, based on total Aeroplan Miles earned across all coalition partners, with preferential mileage levels for redemption, bonus mile offers and exclusive privileges. Benefits begin as of January 1, 2014 and include three status levels based on a member’s total eligible mileage accumulation: dSilver – 25,000 miles, dBlack – 50,000 miles and dDiamond – 100,000 miles (all accumulated during the calendar year).

References[edit]

  1. ^ "ANNUAL INFORMATION FORM FOR THE FINANCIAL YEAR ENDED DECEMBER 31, 2009." Aeroplan. 6 (9 of 79). Retrieved on February 18, 2011. "The registered and head office of Aimia is located at 5100 de Maisonneuve Blvd. West, Montreal, Québec, Canada, H4A 3T2."[dead link]
  2. ^ "Aeroplan travels overseas to buy British loyalty program". CBC News. December 3, 2007. Retrieved 2013-05-20. 
  3. ^ "Our Partners". Aeroplan. Retrieved 2013-05-20. 
  4. ^ a b "Aeroplan Chooses MicroStrategy for Enterprise Business Intelligence Solution" (Press release). MicroStrategy. February 29, 2012. Archived from the original on 2008-07-31. Retrieved 2013-05-20. 
  5. ^ a b c d Doug Alexander (2013-06-27). "Aimia Soars as TD Signs Aeroplan Card Agreement: Montreal Mover". Bloomberg. Retrieved 2013-06-29. 
  6. ^ Jones, Jeffrey (2008-05-28). "ACE sells remaining stakes in Aeroplan, Jazz Air". Reuters. Retrieved 04-01-2011. 
  7. ^ "Aeroplan program set to switch to TD from CIBC". CBC News. 2013-06-27. Retrieved 2013-06-29. 
  8. ^ https://www4.aeroplan.com/whats_new/news_articles.do?dl=WhatsNew_webup3561_2013_06_18&cid=webup3561
  9. ^ "Aeroplan: have a dream? Too bad.". November 9, 2003. Retrieved 2013-05-20. 
  10. ^ "Aeroplan class action suit?". October 12, 2007. Retrieved 2013-05-20. 
  11. ^ "Group seeks class action lawsuit against Aeroplan". CBC News. 07-03-2009. 
  12. ^ "Aeroplan National Class Action/Recours collectif Aeroplan". 2009-03-04. Retrieved 2013-05-20. 
  13. ^ "B.C. mom behind Aeroplan class action lawsuit". July 7, 2009. Retrieved 2013-05-20. 
  14. ^ "All About Altitude". aircanada.com. Retrieved 2013-11-11. 
  15. ^ "Air Canada - Earn up to 150% of the miles you fly". .aeroplan.com. Retrieved 2013-01-29. 
  16. ^ "Book your travel online at aircanada.com and earn Aeroplan Miles for eligible flight reservations". .aeroplan.com. Retrieved 2013-01-29. 
  17. ^ a b "Earn Aeroplan Miles from partners". Retrieved 2013-05-20. 
  18. ^ TAM Airlines: No longer an Aeroplan Partner—effective July 2, 2014.
  19. ^ Tim Kiladze (2013-06-27). "TD, CIBC battle for Aeroplan loyalty". The Globe and Mail. Retrieved 2013-06-29. 
  20. ^ a b Judy McKinnon and Ben Dummett (2013-06-27). "Aimia Moves to End Aeroplan Partnership With CIBC". The Wall Street Journal. Retrieved 2013-06-29. 
  21. ^ "CIBC provides further disclosure on Aimia press release" (Press release). CIBC. 2013-06-27. Retrieved 2013-06-29. 
  22. ^ "Aeroplan program set to switch to TD from CIBC". CBC.ca. 2013-06-27. Retrieved 2013-06-29. 
  23. ^ "Good news: 7-year points expiration scuttled for Aeroplan". CTV British Columbia. 2013-06-27. Retrieved 2013-06-29. 

External links[edit]