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Air Canada to launch own loyalty program; shares soar

Air Canada to launch own loyalty program; shares soar

Until then, points earned for travel on Air Canada flights will be credited to travellers' Aeroplan accounts.

Like Air Canada, Aimia said Aeroplan members can earn and redeem points with the airline in the remaining three years of the partnership.

Air Canada noted members will still be able to collect and redeem Aeroplan miles until the new loyalty program launches.

In a statement on its website, Aimia said Aeroplan will operate normally until 2020, with customers still earning Aeroplan miles for Air Canada flights until the last day of the contract.

Not many details yet but the company did say the new loyalty program "will offer additional earning and redemption opportunities, more specialized service and a better digital experience for Air Canada customers", according to Benjamin Smith, president, Passenger Airlines.

The airline says customers will still be allowed to purchase seats on Air Canada with their Aeroplan points after the change, but at prices that are "competitive with other third-party rewards programs".

Aimia (TSX:AIM) said late Wednesday that it believed Air Canada wasn't going to renew the partnership between the two companies once their contract expires in June 2020.

Air Canada began spinning off its loyalty program in 2002, and it was fully independent by 2008.

What about Star Alliance?

"Air Canada will have complete control over the inventory and how many flights they can release", he says. He said the company continues to work on alternatives for after Air Canada leaves the program, including the possibility of new partners.

Ottawa-based travel blogger Anshul Singh plans to burn through his remaining Aeroplan points and convert to Air Canada's loyalty program. However, they won't be able to use Areoplan points for flights with the airline's rewards partners including Lufthansa, United, and Air China.

Singh hopes Air Canada will offer members more flight options. A customer might have an issue with Aeroplan and be frustrated when Air Canada can not solve it.

Over the years, Aeroplan has also become popular among travelers who never fly Air Canada. It suggested the program will continue in some form after that, telling customers, "We are now exploring a range of options beyond 2020". TD and CIBC Aeroplan cards will also continue.

Members can use their Aeroplan points to book Air Canada and Star Alliance flights until June 30, 2020. However, RBC Dominion Securities Inc. analyst Derek Spronck said in a note that it remains to be seen what the transition costs will be and why Air Canada assumes the net present value of the program repatriation over 15 years to be more than $2 billion.

Those contracts expire in 2024, Johnston said, adding he's not anxious those companies will choose to follow Air Canada's lead.


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