Air Canada and the consortium it led to purchase Aeroplan discussed the acquisition at an exclusive industry event.
If you could ask a room filled with customer engagement and loyalty industry experts and their clients what the biggest event in the Canadian loyalty landscape was over the past year, the overwhelming response would favour the news surrounding Aeroplan’s return to its roots at Air Canada through a surprising acquisition of the rewards program by the nation’s largest airline.
How do we know this? Because the Wise Marketer was invited by Bond Brand Loyalty to attend an exclusive event last month where they previewed key findings from the just released 9th annual Loyalty Report to more than 300 Canadian loyalty marketers. Bond kicked off their invitation-only event by asking the audience this very question. This played out very well given that Bond was hosting leaders from the Air Canada-led consortium that purchased Aeroplan, and they were on hand to address a public audience on the acquisition for the first time.
“We were always ready to go forward being independent,” shared Scott O’Leary, Air Canada’s Senior Director Loyalty Planning & Partnerships, in his opening comments.
But then, O’Leary shifted to explain the benefits to the airline for their acquisition approach, which centered on being the “singular best outcome for Air Canada customers,” with 100% of their points kept safe and transferred on a 1:1 basis. In addition, the airline sees considerable value in a partnership with financial institutions (TD, CIBC and Visa) that have existing experience with products that surround the Air Canada business.
“There are two main themes that we heard from customers that rise above the program design itself - the idea of a one-stop shop where all loyalty and Air Canada needs can be seamlessly navigated in one place and the strong desire for historical Aeroplan [miles] balances to be honoured.” - Scott O’Leary, Senior Director Loyalty Planning & Partnerships, Air Canada.
Rob Daniel, EVP Client Leadership for Bond, navigated the discussion from initial motivators for the consortium coming together through to what members may be most excited about in the new program, while also tactfully teasing out thoughts around caution or risks.
As the primary issuing partner of the coalition, TD is focused on offering customers best in class travel rewards programs that meet their needs. For Katy Boshart, SVP of Canadian Credit Cards, the long-term agreement with Air Canada resolves any sense of uncertainty that had been created around what’s next for the Aeroplan program, and the impact that any changes would have on TD's customers.
Boshart stressed throughout the panel that solving for customers' needs was the primary reason for being in the consortium and later on would add “job one is re-establishing confidence around miles and the program.” She believes that the sense of uncertainty has passed, and noted that TD is actively back in the market with an exciting Aeroplan credit card customer offer. She also shared that existing customers have responded very positively to the news.C
"For TD, it was really about solving for our customers' needs and this partnership is by far the best outcome we could deliver for them. And obviously we think the program Air Canada is launching is going to be extremely valuable for our customers.... It’s a matter of making sure the products we are offering our customers are the right products at the right time."
CIBC is one of Aeroplan’s longest-term partners and has set aspirations for a seamless transition to the new program to drive continued consumer confidence in the bank as a leader in travel rewards credit cards. Jeff Smith, VP of Client Loyalty Solutions & Partnership, feels they will be well prepared for the switchover.
“The new program is a tremendous opportunity,” noted Smith, as he spoke about the momentum in travel rewards that CIBC has and how the bank has something for every traveller with the one-two combination of Aventura and Aeroplan. CIBC is focused on getting clients into the right travel rewards program for them. With regards to other credit cards, CIBC is constantly looking for opportunities to simplify the product lineup and taking a balanced approach on the amount of investment across the rest of the portfolio.
“View (multiple travel rewards credit cards) not as a trade-off but that it enables choice. Our clients have two great options between our proprietary Aventura program and our Air Canada program.” - Jeff Smith, VP Client Loyalty Solutions & Partnerships, CIBC.
While relatively easy to understand the motivation for why Air Canada and Aeroplan’s existing partner banks, TD and CIBC, were compelled to come together in this consortium, Visa Canada’s involvement had raised some eyebrows. Brian Weiner, VP and Head of Product for Visa Canada, emphasized that Visa’s deep relationship with TD and CIBC spanned multiple decades, and that Aeroplan was a strategically important part of the ecosystem as well.
When asked about how Visa balances priorities with their broader network partners in light of this new development, Weiner aptly noted that, “Visa has always and will always consider ourselves an owner in the success of all of the programs that are associated with our network,” and added, “ultimately, the value of a payment system is its ability to enable commerce and grow—to grow its participation among consumers and merchants, its transactions and its volumes. Obviously, keeping Air Canada, CIBC and TD in the fold, not to mention our other clients like RBC, Scotia, Desjardins, all of our acceptors and many others is strategically important to achieving that objective.”
Weiner highlighted Visa’s role as an enabler for its issuing clients to raise the bar in the loyalty space in Canada. “We are heavily focused on functionality and the consumer experience. All of the issuers have their own agenda and their own way of delivering value to their consumers, but the set of consumers that they serve in the travel segment share certain common characteristics that include the need for a seamless travel experience, making life a little easier while working towards their next trip, greater flexibility and increasing the utility of their points. At Visa, our goal is to enable our issuers to deliver on those common consumer needs in their own unique way.”
“It is inevitable that the bar will be raised considerably in Canada and I’m confident that two years from now, it will be a very different game in travel credit cards. Along with our clients and partners, Visa is laser-focused on staying ahead of the curve.” - Brian Weiner, VP and Head of Product, Visa Canada.
As the first forum for these four brands to collectively speak to a public audience about the acquisition, this discussion was refreshingly candid about strategies and reasoning. It is clear that the partners are aligned on bringing forward a set of co-branded credit card products that will be differentiated by exclusive access to Air Canada properties and benefits.
You can expect the program launch to continue being front of mind for Canadian loyalty marketers this year and well into the next.
Bond Brand Loyalty is a sponsor of The Wise Marketer.