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Update 1/20/2023: AwardWallet followed up with Air Canada about its transition to a revenue-based program and received the following statement: “We do still intend to introduce revenue-based accrual for flights, and look forward to sharing more details later this year. You can count on us providing plenty of advance notice and full details ahead of this change.”
As part of the revamp of their Aeroplan loyalty program, Air Canada has been planning to roll out a revenue-based earning model. This is similar to the majority of U.S. airlines. This delay is good news for program members, as the new Aeroplan revenue-based earning rates don't look all that great.
If you fly short, expensive segments with Canada's flag carrier, you might come out ahead. Otherwise, for many travelers, switching to a revenue-based program will be a devaluation. Luckily, it's been put off for at least a year.
Transition Postponed: Aeroplan Revenue-Based Earning
Air Canada Aeroplan is postponing its transition to a revenue-based earning model until at least late 2022. The transition was supposed to take place late in 2021, per the original announcement.
This new program only affects how Aeroplan points are earned from flights. Other Aeroplan program changes have already been implemented.
Air Canada's reasons for postponing the Aeroplan revenue-based earning change are centered around the Covid-19 pandemic. The first reason is interesting, as “evolving customer needs and preferences” is pretty vague.
The Aeroplan revenue-based earning rates are pretty sad. Where carriers like United, American, and Delta all offer 5x miles per $1 (excluding ticket taxes and fees), Aeroplan's cheapest “Basic” fares will earn just 2x miles per CAD$1 spent. Even given the USD to CAD exchange rate, this is a very poor earning rate. Here are the proposed earning rates:
|Fare||Earning Rate per $1 (base fare and carrier-imposed charges)|
Aeroplan will keep its current distance-based mileage accrual system in place for approximately the next year. Here is the current chart:
|Fare Options||Aeroplan Points & SQM (% of Miles Flown)|
|Standard (U.S. and other International Routes)||50%|
|Standard (within Canada)||25%|
|Basic (U.S. and other International Routes)||25% (no SQM)|
|Basic (within Canada)||10% (no SQM)|
The carrier stated that it will provide ample notice of coming changes and will develop a clearer timeline.
Pros/Cons of Revenue-Based Loyalty Programs
Southwest is an excellent example of a fully revenue-based loyalty program. The number of Rapid Rewards points you earn depends on the price of the fare and the type of fare you purchased. The number of points required for an award flight is also tied to the cash price. Other major airlines — including United, Delta, and American — have all transitioned to a revenue-based system for earning miles, which is what Air Canada Aeroplan plans to roll out.
The benefit of a revenue-based program is that it gives greater returns to those who spend the most with the airline. If your work travel often includes last-minute tickets, you'll come out ahead under a revenue-based model. That's because these tickets tend to cost more. You earn more by spending more. Conversely, long-haul leisure travelers who book the cheapest fare tend to earn fewer miles. Saving money actually harms you in this model, because you earn fewer miles.
Example: How Does the New Revenue-Based Earning Stack Up in Aeroplan?
Consider a standard ticket between San Francisco (SFO) and Toronto (YYZ). This flight is a total distance of 2,259 miles each way. Under the old system (assuming the cheapest non-basic fare class), you would earn 50% of flown miles. That's 2,259 Aeroplan miles for a round-trip ticket.
A non-Basic round-trip SFO-YYZ fare in February 2022 currently costs $516 CAD. Under the new system, you'd earn fewer than 1,548 miles (depending on what the base fare is, excluding taxes and fees). This is 30% fewer miles you'd earn with the current system.
On the other hand, consider a short flight like YYZ-EWR (Newark, NJ). You're far more likely to come out ahead under the new system.
My hope is that Aeroplan will ditch the change to a revenue-based model. Personally, I am very partial to distance-based earning. This is one reason why I really love the Alaska Airlines Mileage Plan program. There are a number of other, more attractive changes that have been rolled out already by Air Canada. For me, these have been enough of a revamp to the Aeroplan program. I don't think further changes are beneficial at this point.
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