Air Canada’s frequent flyer program Aeroplan was spun off into a separate public company in 2005. As a separate company, the frequent flyer program makes arms-length transactions with the airline and has a very extensive contract allowing it to buy a minimum number of seats and other benefits.
Air Canada expects to negotiate more favorable terms for the airline compared to the current contract which expires in 2020.
And ‘more favorable terms’ for the airline means less favorable terms for the consumer.
The CEO also hopes to improve Air Canada’s agreement with Aimia Inc., which administers the carrier’s Aeroplan loyalty program.
“We are having good discussions,” he said. “There’s no doubt that Air Canada will make some substantial gains coming out of that.”
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Aeroplan’s parent Aimia purchased over half a billion dollars worth of travel on Air Canada in 2015, and is the single largest Air Canada customer. Aeroplan sells miles to partners like banks who award them to consumers, and sells miles to Air Canada as well. Air Canada paid out about $180 million to Aeroplan for miles it awarded to travelers.
Under a new agreement that’s expected to include a ‘revision’ of some of the terms, the airline expects to “reduce the percentage of seats that it holds for Aeroplan members.”
Hopefully there won’t be a concomitant increase in the cost of Star Alliance awards, which are a much better deal than redeeming Aeroplan points to actually fly Air Canada.