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How Aeroplan Learned to Suck

December 24, 2009

I don’t think I have seen a better barometer of service declines than Aeroplan. Or of how something can start as one thing and, with logical decisions along the way, completely lose its vision to become the opposite.

I was a Director of the advertising agency that launched the Aeroplan program and so was one of the earliest to enroll back in the 1980s. It was a ground breaking idea and all the airlines were looking to reward their frequent flyers and create loyalty with free flights after considerable use.

But the Aeroplan program has moved from being a promotional incentive for Air Canada to being a free standing enterprise.

When it was a promotional incentive, the organization was oriented to serving and motivating customers. Getting you to earn and redeem your points as quickly as possible was its vision. Its purpose was to drive business for Air Canada. It did its job well.

But people did not use up their points quickly and created a huge liability of points that would have to be redeemed. After a time the airline industry, including Air Canada, hit the skids. For Air Canada, that eventually meant heading into bankruptcy.

Aeroplan prospered. Because at the end of the day, Aeroplan points (like other collector points) became a limited access and use currency = call it “near-cash.” Other retailers, including banks, saw Aeroplan as a way to stimulate their sales.

Imagine a credit card that gives its user “near cash” rebates for use. Visa could. And did with a highly successful credit card.

At first it was travel oriented products and services that aligned with Aeroplan. They could provide added value to their customers in a highly motivating manner. Frequent travellers could earn Aeroplan points from car rentals, hotels, airport parking. The ‘near-cash” market burgeoned.

And it wasn’t just Aeroplan. Other airlines and retailers played in this game with their own near-cash points.

Now redemption expanded to include all manner of catalogue items and cash cards for participating retailers. For the business traveller, it was payback time. Your company sends you all around the globe on business and you get after tax TV sets, vacation trips, whatever you want. It was incremental bonus compensation.

As Air Canada faltered, Aeroplan was spun off to be a separate promotional enterprise.  It fed funds into the failing airline.  It still had Air Canada as a major client, but there was so much more to it.

It was now a stand alone near-cash currency. But its operating vision seems to have changed, despite assurances to collectors of the points.

Now it is a guardian at the vault of earned points, fending off use and leeching away as much of the accrued liability as possible. Why, because it now has to pay for the goods and service that get redeemed. And the more points and cash it can get from its captive market, the more profitable its operations are.

So instead of wanting and facilitating redemption, the more slippage it can create the better. No more free flights. No more ready availability of flights for heavy users.

In fact, I just booked a free flight. It only cost me $120 in various fees and levies. So the program moved from free to discounted.

And booking a flight is restricted as well. You might get a flight for a certain number of points, but it will cost a whole lot more points if there are a few layovers along the way. I once tried to book a direct flight from Toronto to Vancouver and there was nothing less than two stop overs (adding four to five hours to my trip) for points. A travel agent I know once told me that people who have overseas vacation plans try to book a year in advance to be able to get seats.

Another way Aeroplan has reduced its liability is to confiscate points. A co-worker had her Aeroplan points confiscated due to one year of inactivity. The points were not taken away, she was offered an opportunity to buy them back. Let’s just say her response started with an “F.”

Aeroplan also charges fees for transfer of points. If you inherit points from someone passing away, or your spouse wants to give you their points. Expect to pay a few hundred dollars.

And Aeroplan bookings are much more inflexible than other travel arrangements. When booking a recent flight, I was prompted to also rent a car. I inadvertently made a mistake by agreeing to a date that was a default setting and not the date I wanted.

Despite immediately calling Aeroplan’s 1-800 number (my call was important to them, please hold), I was told I could request cancellation, but there were no guarantees, and the process would take at least ten days. Tough luck because I was flying within a couple days. Another snagging of points.

To make matters worse, they told me to call the car rental agency. Who immediately told me to…. you guessed it, call Aeroplan since it was their booking.

At the end of this, Air Canada was able to sell off Aeroplan for needed cash. And the new operators have to pay back their purchase. Fair enough.

But they are doing it at the expense of Air Canada’s already beleaguered customers. Crappy service at the Aeroplan side reflects on Air Canada as loudly as crappy service on the airline. And did I mention that my flight arrived on time, but it did take Air Canada an hour more to off load the luggage.

My colleague vows to avoid Air Canada at all cost since her points were “ripped off” from her. Now this volume growing technique has evolved into one that reduces volume.

Aeroplan has turned from promoting Air Canada to pissing off people making them avoid Air Canada. Quite a turnaround.

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