Aeroplan no more? Air Canada to launch own loyalty program

Click to play video: 'Air Canada ditching Aeroplan'
Air Canada ditching Aeroplan
WATCH ABOVE: Canada's largest air carrier is pulling out of the customer loyalty program it started. As Sean O'Shea reports, the airline says it will create a new program by 2020 – May 11, 2017

Air Canada announced Thursday it plans to launch its own loyalty program and will replace Aeroplan in 2020.

In a statement, Air Canada said Aeroplan will no longer be the carrier’s loyalty program after its agreement with Aimia – Aeroplan’s parent company – effectively ends June 30, 2020.

“The new program, launching in 2020, will offer additional earning and redemption opportunities, more personalized service and a better digital experience for Air Canada customers,” Benjamin Smith, president of Air Canada’s passenger airlines, said in a statement.

“Similar to all of Air Canada’s North American peers, by managing our own loyalty program, we will be able to take better care of our customers by making decisions in real time that address specific needs.”

READ MORE: Canada’s best credit cards to rack up travel rewards points

Air Canada noted members will still be able to collect and redeem Aeroplan miles until the new loyalty program launches. After June 2020, points earned from Air Canada and Star Alliance flights will be credited to the new loyalty program.

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“Aeroplan miles earned up to June 2020 will stay in Aeroplan members’ accounts, and will continue to be subject to the conditions of their program,” the company noted in a press release.

The company said it intends to offer redemption of Aeroplan seats to members after the new loyalty program kicks in “with pricing competitive with other third-party rewards programs.”

“Doing the right thing for Air Canada’s customers throughout this transition period will be our guiding principle,” Calin Rovinescu, the airline’s president and CEO, said in a statement.

Several banks offer credit cards with travel rewards, including Aeroplan. On Thursday TD Bank Group said there will be no changes to its Aeroplan credit card program following Air Canada’s announcement “at this time.”

“Given the lengthy timeline, and the overall strength of TD’s Credit Cards business including its market leadership and value proposition, the Bank does not expect a material impact to TD’s net income after tax when the partnership expires,” TD said in a statement. “TD will continue to provide our customers with compelling loyalty reward programs, and credit card solutions to help them achieve their goals.”

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Both TD Bank and CIBC have contracts with Aimia through 2024.

Prior to Air Canada’s announcement, Aimia said it had been engaging in talks over contract renewal with Air Canada but “very recent discussions leads Aimia to the belief that Air Canada does not currently intend to renew its partnership with Aeroplan.”

“Our partnership has proven to be both powerful and successful over the years, pairing one of the world’s best global airlines with one of the world’s leading loyalty providers,” Aimia’s incoming group chief executive said in a statement Wednesday night. “Members can continue to earn and redeem with Air Canada as our contract remains in effect until 2020. We will work with Air Canada to provide uninterrupted service for Aeroplan members.”

Following Air Canada’s announcement, Aimia shares tanked nearly 60 per cent by mid-day trading.

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