What is the Most Devalued Airline Frequent Flyer Program in North America?

I believe the Most Devalued Airline Frequent Flyer Program in North America award goes to Air Canada and Aeroplan.

I do caveat this, I am very specific in the title of the award.

  • Airline frequent flyer program so the March 28 bloodletting at Hilton HHonors doesn’t count. (Nor does the introduction of category 7 awards at Starwood, although that was a specific devaluation and meanwhile the program has improved elite benefits.)
  • North American programs, so LatinPass which first tried to make members earn back their existing point balances and then changed from being a frequent flyer program to an online shopping program doesn’t count.
  • Devaluation isn’t the same as “going out of business” so while I lost all value from my Mexicana Frecuenta miles I don’t really think that airline’s shutting down is really a frequent flyer program devaluation.

With those caveats in place, I believe the program that’s devalued the most in the past few years has to be Air Canada’s. The elite benefits are on the Air Canada side, the mileage redemptions are on the Aeroplan side (technically the frequent flyer program was spun off from the airline and is a different company). Both have hit members hard.

First there was the gutting of their award chart on July 15, 2011. For instance, my favorite award — first class to most of Asia — went from 120,000 miles to 175,000 miles (a 46% increase in one shot). Australia awards went from 75,000 to 80,000 in coach; 100,000 to 135,000 in business (35% increase), and 140,000 to 185,000 in first (32% increase).

Then the cost of redeeming awards went up hundreds of dollars through the imposition of fuel surcharges on many of their partners effective November 2011.

And now they’re increasing award prices again. Remember that first class Asia award that two years ago cost 120,000 miles? It’s going up to 210,000 miles. First class to Australia? 220,000. And that’s not even the most expensive award.

But it’s not just mileage redemptions that have been hit brutally, nearly doubling in some cases plus now requiring hundreds of dollars per passenger in cash. It’s the elite program as well.

And the latest hit? The imposition of cash co-pays on elite international upgrades.

Now, they’ve offered the improvement that all paid fares are going to earn elite qualifying miles — though that’s not quite as good as it sounds, the cheapest fares will earn only 25% of flown miles.

But once you achieve your status, it’s going to be far less valuable. They’re taking away the ability for top tier elites to upgrade on award bookings, and they’re restricting the ability of elites to upgrade other passengers.

The biggest killer, though, is adding a $500 each way cash co-pay for upgrades to Europe and South America and a $750 co-pay for Asia and Australia on top of spending upgrade credits. This is waived for Air Canada’s 100,000 mile flyer Super Elites, but is a new cost for all other members.

Air Canada’s frequent flyer program was — just over two years ago — among the best in the world. But its members have just gotten consistently hammered. And you have to feel bad, because our Northern neighbors are just so darned friendly. They don’t deserve this, eh?

(HT: Chris R.)


    You can join the 30,000+ people who see these deals and analysis every day — sign up to receive posts by email (just one e-mail per day) or subscribe to the RSS feed. It’s free. Don’t miss out!

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

More articles by Gary Leff »

Pingbacks

Comments

  1. Air Canada was the first to spin off its frequent flier program into a publicly traded company. Gary, is there a cause and effect here? Is there a hidden common cause of both the spinoff and the recent massive devaluations?

    Sometimes decisions which look horrible from the customer viewpoint turn out to be wise for the business. Is this one of those times or not? Why?

  2. Since most of us in the U.S. don’t credit their mile to Aeroplan, I would give the award to Delta. Skypesos are very difficult to use AND keep losing their value. I don’t know why anyone flies Delta that has the choice.

  3. Aeroplan miles can at least be used… the cost is high but there is availability. Delta rewards are expensive (and will be even more so next summer) and they are impossible to redeem.
    My vote is for Delta… they should not be even called an airline.

  4. It’s a tossup since Delta is raising award prices next year. I guess Air Canada just had to match and kill their elite program to bring their international upgrade programs similar to other North American competitors.

  5. To me the Starwood cash and points devaluation had as much impact as any this year (basically a 40% devaluation in value of points). Hilton was definitely worse but I’m less vested in them.

  6. Happy to have made my last AC redemption about a month ago. Now down to about 10k on AC and 10k on Delta.

  7. The upgrade benefit being devalued may be a good thing for “non-‘loyal'” flyers who buy points (or manufacture spend their way into acquiring points) to redeem for Star Alliance flights …. if the AC premium cabin seats aren’t taken up by upgrades and instead end up as inventory available for award redemption by partner airline program customers. Fans of buying Lifemiles or Dividend Miles may come to welcome this move while loyal AC customers get burned yet again by AC (including Aeroplan in which it has a very large share, large enough to have a controlling influence of some sort).

  8. and people wonder why DOJ wants to shut down AA/US Airline merger…COMPETITION…and what happens when it is limited or non-existant

  9. Wouldn’t you say that Mexicana Frecuenta miles going from some cpm to 0 cpm is the worst type of devaluation ever? Like having German Marks or French Francs after the Euro came out?

  10. Although AC “spun off” Aeroplan… it really hasn’t been. A series of 100 million dollar “loans” to it’s largest customer(AC) kind of gives it away.

    AC is just now flexing their muscle of being the only game in town.

    I gave up on AC several years ago and I have finally booked my last Aeroplan award ticket.I am FREE!!!!

  11. Gary, Air Canada is an extreme example it seems, but to what extent does “buy when the price is low” apply here? That is, do you see the more devalued programs as the wave of the future, so it’s best to just jump on board and get ahead of the crowd? And, is this really a sign of changes in the business model, or is this just simply inflation at work in an economy where parties can print “money” but the recipients don’t necessarily have to spend it? Are there programs that you see, by virtue of their business model, to in some way or the other be more resistant to devaluations?

  12. I think IdahoSt hit the nail on the head, this is a direct result of enjoying monopolistic market share along with a gullible public – as evidenced by 2 of Canada’s biggest banks fighting to be the credit card issuer for these miles. The only alternatives – WestJet and Porter, have no comparable FFPs so domestic Canadian flyers are left with limited alternatives. The savvy ones credit their Air Canada flights first to Aegean for *G, and then to United for redemptions, but the lack of ability to earn United miles via spend in Canada puts a real damper on its competitiveness as an alternative.

  13. In General Aeroplan is a joke. fuel surcharges are very high and seats are not available in most European and Asian countries unless you are willing to make a few connecting stops. We do not want monopoly here and want competition….

  14. Maybe Delta should merge with AirCanada so they can add $200-$400 fuel surcharges to their pricey reward seats? Then they would make more reward seats available and stop the complaining about limited reward availability.

  15. A bit disingenuous with the admittedly limited scope of the question. Aeroplan is mostly irrelevant to the vast majority of Americans who fly mostly US carriers. If you go worldwide then BA really deserves honorable mention with introduction of Avios and severe cutbacks in TATL inventory plus hikes in absurd “fuel surcharges”

    And hopefully your next column will nominate a hotel program. Because Hilton will win handily over IC and SPG.

  16. I feel like there have been a lot of un-noticed changes to Emirates recently:

    – Introduction of fuel surcharges on codeshared routes with Qantas of several hundred dollars
    – Award chart now matching Qantas for classic awards hence going from 95000-128000 in Y, 180000 to 256000 in J, and 270000 to 384000 in F

    I’m ditching my Citi Emirates card based on the changes.

  17. I agree you make some fine points about Aeroplan but you can book F awards still with Aeroplan.

    my vote goes to Delta. A 25%increase with no advance warning. Blocking AF awards and denying the fact. I think Dekta is the biggest loser.

  18. @ Gary

    you can still exchange the “old” european currencies for Euros at the central bank branches without any problems… 😉

  19. Is the ‘elite’ program also managed by Aima, the public spinoff company that handles the mileage side of Aeroplan? Or is that still administered internally?

  20. I agree about Aeroplan. These “fuel surcharge” airlines do not deserve any business that is driven by loyalty program considerations. The “fuel surcharge” turns nearly free tickets into somewhat discounted tickets.

  21. 1. STAR upgrades are from the highest economy fares and thus have little impact on upgrade inventory either way and often have priority over elite instrument upgrades when R inventory is zero’d out until day of flight;
    2. While there is F award redemption, LH, LX and SQ pretty much embargo that cabin from Aeroplan until the last minute, if at all, leaving UA, TG, NH and OZ for F awards, the latter three coming with huge surcharges;
    3. AC rationalizes the elite instrument upgrade copays on international routes (not NAmerican ones) by saying US programs have copays for their miles upgrades, but AC doesn’t have miles upgrades for its own flight, just for STAR flights…and no US carrier as yet has copays for elite instrument upgrades (though like AC some do have a minimum upgrade eligible fare requirement);
    4. Curiously neither US nor UA levy similar surcharges on their awards on their own or STAR flights but those same flights using Aeroplan miles may cost hundreds of dollars (i.e. my AC YYZ-YVR-YYZ award ticket using UA miles next month cost me $60 in fees/taxes, but would have been $160 using Aeroplan miles);
    5. Last year AC increased the number of eUpgrade credits required for those same international flights it is now asking another $500-$750 for…it also raised the fare threshold for upgrade eligible flights by similar dollar amounts (varying by route) on those international routes.

    I remember at the SMD2 when Aeroplan won the best NAmerican FF program at the newly launched awards, for both elite benefits and award redemptions. AC/Aeroplan has gone from FIRST TO WORST in a matter of three years!
    Many of us, seeing the writing on the wall, have been moving our business and flight credits to UA/MP…and a few others who just want STARGold benefits — another devaluation we won’t get into right now — crediting their STAR flights to A3. I moved over to MP a couple of years ago, maintaining AC top tier SuperElite and 1K each year. However, I have not put a single flight mile into AC/Aeroplan since last fall when the higher upgrade fares were introduced and redemption chart increases were announced. Instead I moved that part of my travel over to AA and AAdvantage where I did the 1K/ExecPlat status match and this year am just one TATL from requalifying for ExecPlat 2014…along with 1K.

    A look at the response on AC forums of FT and MP certainly shows this to be the FF equivalent of the infamous Stamp Tax and the Tea Party as the last holdouts of AC/Aeroplan jump ship for UA/MP or for transition purposes to A3.

  22. True story: Redeemed all of my Aeroplan miles last spring so I could visit Barcelona with my girlfriend. I used my points for her ticket and bought another for myself.

    My Lufthansa ticket costed around $700 CAD. Her “free” ticket came with a fuel surcharge of $500!

  23. I have been a member of Aeroplan since 1985 and am looking for another FF program because I can not put up with their customer service anymore. I traveled in July and they still have not fully credited the miles. There is no way whatsoever to talk to the people who credit miles. I flew with LH and they say that it is the problem of LH because of a slight difference in name in the ticket and on Aeroplan. Meanwhile, when I call LH they absolutely insist that it is Aeroplan that is blocking the crediting of the miles.

    What is the best Alternative to Aeroplan for someone in Canada? Star Alliance would be preferable.

  24. Unfortunately in Canada Aeroplan is the only Star Alliance game in town. Thankfully there’s still quite a value in Aeroplan but Gary Leff just doesn’t realize it. 🙂

    @esms – If you have a bit of a travel budget then buying Lifemiles/USDM is easiest.

Leave a Reply

Your email address will not be published. Required fields are marked *