Air Canada to launch its own loyalty program in 2020 – Is this the end of Aeroplan?

Per Air Canada’s press release today, Air Canada will part ways with the Aeroplan program effective June 30, 2020:

“The new program, launching in 2020, will offer additional earning and redemption opportunities, more personalized service and a better digital experience for Air Canada customers,” said Benjamin Smith, President, Passenger Airlines.

While this is exciting news, as many of us have had negative experiences with Aeroplan, from expensive fees and fuel surcharges to hours-long hold times. Let’s assume we only want to redeem Aeroplan miles on award flights, and not cars, hotels, merchandise, or vacations, as each of those redemption types offer less value than booking award flights. Aimia, Aeroplan’s sole owner since 2008, announced they have prepared for a future without Air Canada:

Aimia strongly believes that a renewal of the company’s long-term partnership would be the best and least disruptive option for both companies’ customers, in particular Air Canada’s frequent flyers. While Aimia remains open to further discussions with Air Canada, the company’s strategic planning had already contemplated other post-2020 alternatives in parallel with the goal of ensuring that Aeroplan members retain access to a strong redemption offering around air rewards in the future. Given the state of current discussions, we will continue to pursue these alternatives actively.

While this may be true. One thing to keep mind is that Air Canada is part of Star Alliance, and besides Air Canada, the majority of award flights available for redemption on Aeroplan are Star Alliance partner airlines. When Air Canada terminates its partnership with Aeroplan in mid-2020, will award flights operated by other Star Alliance airlines (such as United, Lufthansa, EVA Airways, Asiana Airlines, ANA, to name just a few) cease to be redeemable with Aeroplan?

If that is the case, it is hard to see Aimia, and Aeroplan, surviving this ordeal. Perhaps, the end has already begun. As of writing, Aimia’s shares have dropped more than 57% today on the Toronto Stock Exchange.

Kevin