Still Flying

Aeroplan's evolution from Air Canada's frequent-flier plan to a standalone loyalty marketing program hinged on integrating its systems with new business partners.

Still Flying

For all of Aeroplan's efforts to expand into other types of loyalty marketing, at heart it's still a frequent-flier plan.

Active members who have done the math tend not to be very tempted by the option of buying merchandise such as electronics. Karine Pépin, a member who frequently flies between San Francisco and Ottawa and blogs her travel tips, says she once calculated that the same number of Aeroplan miles it would cost her to obtain a flat-screen TV worth $2,000 would secure her two flights to Sydney worth $4,000. "It's all about the dollar/point value," she says.

So, members still judge Aeroplan largely by how easily they can trade their miles for airline tickets. In this vein, Aeroplan introduced its ClassicPlus program, where Aeroplan buys additional seats from Air Canada on behalf of members who agree to pay a premium in miles. In a May conference call with financial analysts, Aeroplan CEO Rupert Duchesne said a key metric, the percentage of members who reported being able to secure tickets "for the destination and date of their choice is now in the low 80s, and it's never before in our history been higher than the mid-70s." And that should mean good things for Aeroplan's business, according to Duchesne: "We know that once you have a satisfied member who has had a good redemption, then their rate of accumulation increases."

Lafrance acknowledges there's a shortcoming in the current flight selection process on the Web site, which he is working to correct.

Aeroplan and Air Canada are both migrating to a reservations system from ITA Software, which supplies technology to Orbitz and several other airline Web sites. Lafrance says that will give travelers the flexibility to do "directional" shopping—they can choose their outbound and return flights separately, the way it's done on most travel Web sites.

Currently, Aeroplan displays only a pre-calculated list of round trips between any two cities because that's the way Classic reward flights were traditionally offered, and that's the way the company's mainframe reservations system works. Aeroplan already taps into ITA's more flexible reservations system to search for ClassicPlus flights. But to provide a common shopping experience for both types of flights, the ClassicPlus options are still presented on the Web site in the round-trip format—a common denominator dictated by the legacy reservations system.

But that's a transitional solution, Lafrance says: "We've broken the model. We just need for the technology to catch up."

Next page: Aeroplan: SOA Takes Off