Aeroplan Announces Major Miles Devaluation, New Credit Cards and Elite Spending Program

Jul 1, 2013

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Air Canada’s Aeroplan Rewards program is launching some major changes to its program starting January 1, 2014, including a big devaluating overhaul of mileage award redemptions, signing a deal with a new credit card partner, eliminating mileage expiration, and instituting a new revenue-based program of elite status benefits.

Major Changes to Air Canada’s Aeroplan Program Coming.
Major Changes to Air Canada’s Aeroplan Program Coming.

Award Chart Changes

There were several major components to the award chart overhaul that Aeroplan announced. Starting with the good news, one-way Classic Flight Rewards will only cost 50% of the miles that a roundtrip costs. Currently one-ways require 67%, so flyers can at least save on those.

Now for the bad news. Aeroplan is increasing redemption levels by about 20% – which some cases adds up to 40,000 miles, to flights from Canada and the continental US to Asia, the Middle East and North Africa, and Australia/New Zealand/South Pacific. Here is a comparison of the old versus new redemption levels.

Increase in ClassicFlight Redemption
Increase in ClassicFlight Redemptions from Canada/US to almost every other continent.

So business and first class awards to almost every continent are increasing by 25,000-40,000 miles on top of the increase in award redemption levels that Air Canada put in place back in 2011.

Luckily, redemption levels within Canada and the continental US are not increasing, nor is that gem in the Aeroplan redemption chart, and one of the best ways to get from North America to Europe – 90,000 miles for roundtrip business class to Europe. That might just be the one award worth redeeming any more, and after this huge slew of changes, it might not be around for much longer, either.

For more information on Aeroplan redemptions, taxes and fuel surcharges, check out my series: In Part 1 of my series, I priced out awards on Air Canada, United, Lufthansa, Brussels Air, Singapore Airlines, Air New Zealand, ANA and South African Airways. In Part 2, I looked at some other popular Star Alliance carriers including: Air China, Asiana, EgyptAir, LOT Polish Airlines, SAS, Swiss, TAM, Thai Airways, Turkish Airlines and US Airways (for now). In Part 3 I examined the rest of the 27 Star Alliance partners including: Adria Airways, Aegean, Austrian, Avianca/Taca, Copa Croatia, Shenzhen and TAP, and the final installment: Aeroplan Star Alliance Taxes and Fees Overview Roundup.

Based on the changes, if you have Amex points, transferring them to Singapore or ANA may make a lot more sense once these changes go into effect.

New Credit Cards

Update: Per Aeroplan’s social media representative, “On June 27th, Aeroplan announced that TD will become Aeroplan’s new credit card partner effective from January 1, 2014, replacing CIBC, unless CIBC chooses to exercise its contractual right to match the terms of the agreement (my emphasis). Nothing changes this year and members can continue to use their Aerogold credit cards throughout the rest of the year.”

So for now, nothing has been decided, although in the announcement itself, Aeroplan stated: Effective January 1, 2014, TD Bank will become Aeroplan’s new financial credit card partner for the next 10-year period. Aeroplan is also still in talks with its other credit card partner, American Express, and nothing has been decided yet, though I wouldn’t count on Aeroplan remaining an Amex transfer partner.

Though they are promising new sign-up bonuses and other perks with the new family of TD cards, there’s no telling what those will be, so if you’ve been thinking about getting an Aeroplan credit card, get in on them now before they go away. Right now some of the best deals include the Canadian Amex Platinum Card, which awards 60,000 points when you spend $1,000 in 3 months for a $699 annual fee, and the AeroplanPlus Platinum Amex, which awards 25,000 miles when you spend $1,000 in 3 months for a $499 annual fee.

For other top Canadian travel credit cards, check out this post.

New Elite Program – Distinction

Distinction is a new Aeroplan tiered recognition program that rewards its top mile-accumulating members during the year (from January 1 to December 31 of each year) with different status levels and benefits and is based on base flying miles and spending. It counts Aeroplan miles earned through all direct partners including airline, travel, retail and financial card partners (except sign-up bonuses). This program is independent of Air Canada’s existing recognition program, Altitude. It launches in 2014, though earnings in 2013 will count toward 2014 qualification already.

Distinction Program Benefits
Distinction Program Benefits

Here are the status levels:

  • dSilver—25,000 eligible miles accumulated during the calendar year
  • dBlack—50,000 eligible miles accumulated during the calendar year
  • dDiamond—100,000 eligible miles accumulated during the calendar year

Benefits of Distinction include:

  • Exclusive flight reward benefits with significantly better value on new Market Fare Flight Rewards;
  • Special flights to popular destinations during peak periods with 100% of the seats reserved for Distinction members and offered at ClassicFlight reward mileage levels;
  • Bonus mile offers on eligible Air Canada flights, with select hotel partners, and through Aeroplan’s eStore;
  • Preferential treatment, privileges and limited-time offers, special partner and reward offers and invitations to exclusive events.

This is a very interesting new development that makes Aeroplan the first program to really award spenders in equal measure to frequent flyers. Granted, Delta and United have both instituted revenue/spending requirements for elite status recently, but you still must fly in order to qualify. With Distinction, you can literally spend your way to top-tier elite status and miles you earn on credit card spending count equally to those you spend in the sky.

I always say that frequent flyer programs are really frequent spender programs and Aeroplan really cements this fact in my perspective since they are clearly trying to woo co-branded credit card spenders just as Delta and United have with their co-branded credit cards – and I only expect this trend to continue and spread to more airlines as a way of earning and maintaining elite status.

No Mileage Expiration
The one silver lining is that Aeroplan has eliminated mileage expiration. Right now, regardless of how active your account is, if your Aeroplan miles are not redeemed within seven years of earning them, they expire, but this will soon change with the cancellation of Aeroplan’s seven-year mileage redemption policy.

With a strong competitive market, it is about time Aeroplan cancels mileage expiration. Fortunately more and more programs are going in the direction of “no mileage expiry.”  JetBlue just did the same thing and Delta doesn’t have mileage expiration either. However the 12-month expiry policy is still active, which states that “The miles in your account will not expire as long as you have one accumulation or redemption activity every 12 months,” so members will still have to continue to earn miles each year in order not to lose their miles.

What do you think of these changes? How will they affect your strategy with Aeroplan?

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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