Evidence of the latest threat to the Canadian retail travel sector is probably right in your own wallet. It’s your Costco membership card.
TORONTO — Reports say Aeroplan aims to get into the airline business by offering charter flights to its most popular destinations as the loyalty program prepares for the end of its exclusive partnership with Air Canada in 2020.
“We have routes where we have enough redemption demand today that we can fly a daily charter throughout the year on some particular routes,” said Jeremy Rabe in his first media interview since taking over in May as CEO of Aeroplan parent company Aimia Inc.
“Those will be dedicated Aeroplan aircraft that are flying just for Aeroplan.”
Aimia is in negotiations with potential airline partners to operate narrow-body aircraft ideally suited for flights to sun destinations in the Caribbean, he added.
Details about the number of planes, their outside look and configuration will be announced in the next year or so, said Rabe.
“We can optimize the itineraries, we can make sure that those planes are flying to the places where people actually want seats and again that’s a big difference than today.”
When its partnership with Air Canada ends, Aeroplan members will be able to buy seats on any airline, any time, to any destination.
Aeroplan is working to sign up preferred airline partners and is also introducing several new program features that will create a more flexible program and a better member experience.
Starting in September, Aeroplan will introduce a new online travel booking tool that will initially enable members to earn miles when they rent a car or book a hotel using cash.
Aeroplan plans to offer redemptions starting at the same mileage levels for about 95% of its flight redemptions. That answers one of the biggest questions he’s heard from members about how Aeroplan will look after 2020, said Rabe.
It is also introducing a points transfer program in 2020 that will allow members to convert Aeroplan Miles to the loyalty programs of nearly 20 airlines covering several alliances, giving them wider access to flights and hotels.
Rabe downplayed the risk that the transfer program will be a conduit for members to end their loyalty to Aeroplan.
“If members see that we’re going to have an incredible loyalty program, differentiated value, flexibility and experience then I’m confident that members will continue to engage in the program and it will be the best loyalty program in Canada.”
In other airline news, after months of negotiations WestJet and Delta Air Lines say they’re moving ahead with their plans for a joint venture, signing a definitive agreement to create a comprehensive transborder joint venture arrangement that will offer customers an extensive route network within the U.S. and Canada.
“WestJet continues its drive toward becoming a global airline, and the signing of this agreement marks a major milestone in that journey,” said Ed Sims, WestJet President and CEO.
In December 2017 WestJet gave notice that it was ending its nearly eight-year relationship with American Airlines. The news came just a few weeks after it announced it was looking to expand its existing relationship with a joint venture with Delta.
The anti-trust immunity that goes along with airline JVs means that the airlines cooperate on everything, from scheduling to pricing to marketing and, critically, sharing the revenue from transborder flights.
The WestJet-Delta deal is subject to government approval. Air Canada and United were blocked from implementing a similar arrangement back in 2012. There have been reports, as recent as June 2017, that Air Canada and United are seeking to again pursue a joint venture, now that Canadian federal regulations for JVs could potentially loosen up.
With files from The Canadian Press