Randy Petersen
Tonight we welcome for the third time on FlyerTalk Live!, Rupert Duchesne (President, Air Canada Aeroplan). Rupert has become our most frequent guest on this chat and certainly proves that he is willing to talk about Aeroplan and is interested in the members of Aeroplan. Welcome Rupert.

Rupert Duchesne
Hello everyone - "nice" to be back TQ

Mikel at WebFlyer
This question was submitted earlier by airbus320: At a time when AC needs to retain its loyal customers, why would you alienate them by introducing a fee for Aeroplan bookings?

Rupert Duchesne
We do not intend to alienate loyal customers: we need to invest in the business and we believe that the fee will be understood by the majority of customers as necessary to further improve what we offer in these tough times TQ

Mikel at WebFlyer
This question was submitted earlier by Howard: Why doesn't Aeroplan allow top tier members to purchase additional upgrade certificates? This way, Aeroplan would get extra revenue from the sale of the certificates, and AC would get extra revenue from passengers buying higher fares in order to use the certificates.

Rupert Duchesne
AC already offers more C space than most N Am carriers and you can buy both Rapidair and Transborder upgrades - if upgrades were routinely for sale demand would outstrip supply and we'd be back with upset again TQ

CCAA
Question: Is AC still contemplating the implementation of the partnership deal with Delta signed in 2001?

Rupert Duchesne
No, I do not believe that this partnership deal will be implemented. TQ

Mikel at WebFlyer
This question was submitted earlier by airbus320: Why should I continue to fly Air Canada when I have to compete with shoppers to redeem my miles?

Rupert Duchesne
Actually you're competing with yourself as most flyers are also users of Aerogold and Diners and take advantage of the shopping earning as well. AC has increased the number of redeemed seats in the last three years proportional to the number of miles sold to third parties so there has not been dilution whatever the rumour mill may suggest. Top flyers still have an access advantage that will be retained TQ

PointWeasel
As an Elite member, I take issue with these new service fees that will be implemented, however, what really gets me upset is that I hear from the new Aeroplan spokeswoman that these fees are inline with US carriers. This is not entirely true at all. As a higher tier FF with both Alaska Airlines Mileage Plan and United Mileage Plus, I have these fees waived and/or reduced depending on the timeframe I make my booking, however, booking online never, I repeat, never incurs a fee. Where do your 'research people' get their facts from?

Rupert Duchesne
Most US carriers have late booking fees for reward travel and some do waive or discount but not all. Our figures show that 25-30% of bookings occur within this window and actually generate more total revenue for the US programs. We felt it was fairer to spread a much lower fee across all bookings as there's little logic for a last minute fee on its own. Also web is free and if a fee is introduced it will be much lower - my hope is to avoid a fee for the web TQ

Mikel at WebFlyer
This question was submitted earlier by Metman: Given that most of the routes in Western Canada have been given over to Zip, a discount airline, is there some consideration of lowering the number of AP points that will be required to book a flight? As I understand it now, it takes 25K points for a YWG-YVR flight on Zip same as on the old AC flights. Seems a little expensive for what one is getting.

Rupert Duchesne
Once we've seen how customers react (through quant surveys not opinions) we'll consider ZIP and Tango pricing but so far we've had almost no complaints - service quality is high on both carriers and people actually comment on the enjoyability of ZIP flying. In addition, short-haul redemptions at 15,000 miles are still very good value vs US carriers (but I realise that YWG-YVR is not short-haul - most ZIP flying however is) TQ

makin'miles
Last year, Aeroplan Elite members began to be charged a fee for bringing guests into the Maple Leaf lounges. The reason cited was that the lounges were getting to be too full. Soon after, however, MLLs in Canada became part of the Priority Pass program, which does bring more people into the lounges, despite them being 'full'. How can these two facts be reconciled? Thanks!

Rupert Duchesne
Pass - we'll come back to this one TQ

Mikel at WebFlyer
This question was submitted earlier by StuMcIlwain: Air Canada claims that 10% of their seats are set aside for Aeroplan awards. Yet when I look at award availability on domestic routes 11 months in advance, I find that an average of only 5% of the seats are available for Aeroplan awards. Why is there such a difference between these two numbers?

Rupert Duchesne
This is easy - AC allocates seats progressively so by the time we get to about one month out all the 10% by route has been allocated. Believe me we're very careful to adhere to this promise we made to the members and the government. On most high-demand routes the actual usage is beyond 10% as AC often allocates additional seats in the few weeks prior TQ

Rad456
Will one way and stopover reward travel be able to be booked online in the future? Also, any chance online reward booking bonuses\discounts may become permanent, as I believe some other airlines have?

Rupert Duchesne
We have a long slate of new functionality coming on the web over the next twelve months as we have already promised. It includes open jaws, most Star flights, stopovers, Tango ZIP, changes and xcelns etc. Most, if not all of these will be in place by Jan, 2004 TQ

Mikel at WebFlyer
This question was submitted earlier by Mike Munro: If Air Canada goes into liquidation, how will this affect my Aeroplan miles? I am safe in holding on to my Aeroplan miles or redeem them now and save myself.

Randy Petersen
Not speaking for Air Canada, but I am as bullish on them as I am with United and have been with US Airways. I see no reason to burn any Aeroplan miles for fear of liquidation.....

Rupert Duchesne
We've made very clear statements about all previous miles being honoured and earn/burn opportunities are not affected. AC is under CCAA and the whole purpose is to avoid any prospect of liquidation. As you'll know from the US Chapter 11, most carriers emerge far stronger and we intend to do the same TQ

YOWkid
What is AC doing to generate loyalty amongst the youth of Canada? As a student, I know that most of my peers fly WS et al. and not AC -- many don't care for TravelCuts tickets because they are so restrictive and don't give AP points...

Rupert Duchesne
Watch this space! We've started focusing on the student and youth market at Aeroplan - hence our support for the Junos and the contest we ran. You'll see more of this in the future as well as partners and offers tailored to the younger market. TQ

Mikel at WebFlyer
This question was submitted earlier by keithguy: Does Aeroplan realize that its program has become uncompetitive with other Star Alliance programs? Why shouldn't Aeroplan members switch to other Star Alliance programs, especially when they can redeem the same domestic Canada awards through UA or MX without paying the booking fee or fuel surcharge?

Rupert Duchesne
It may be "uncompetitive"in some respects and more than competitive in others - it's a balance and we would be foolish to deign that balance away from what we consider is best. I don't want to see 50,000 for Elite etc.....TQ

ac/elite
Is there any chance that arrangements will be made so that upper tier Aeroplan members will again be given automatic gold level membership in hotel chains such as Starwood as used to be the case?

Rupert Duchesne
This is really up to our partners - they manage their loyalty propositions. It's fair to say however we're expanding a joint promotion capability at Aeroplan and will be actively soliciting more such benefits and have already had more joint benefits in the last year than previously TQ

Mikel at WebFlyer
This question was submitted earlier by Tractor Boy: Aeroplan's "no capacity control" program is extremely uncompetitive compared to the US airlines in regard to: 1. It is not open to all members. 2. It does not apply to the front cabin. 3. It is subject to extensive black-outs. Can you please state, on EACH of these 3 points, what your plans are to address Aeroplan's lack of competitiveness.

Rupert Duchesne
I go back to the question of balance. Aeroplan will not be identical to US programs - we know from quant research what our members prefer. SEs can book J, Elites have this exclusive benefit which we do not believe should be made available to all members. However, we are developing processes to make more capacity available and dispense with blackouts (which have in any case been reduced in 03) as I stated when we announced the Onex deal. These developments are dependent on outside funding so those that suggest an Onex-like investor is bad news are very wrong TQ

AC*AP*FQTV
Are there any plans at Aeroplan to allow redemption of reward miles once at the airport so as to mix-n-match paid fares with points extracted to upgrade?

Rupert Duchesne
This is actually a nightmare to make happen when we're trying to streamline airport processes given the added security and how much customers hate the added wait-times. This is also a very big $$$ investment that frankly AC can ill afford right now. We know it's a want, but this is one we can't justify right now TQ

Mikel at WebFlyer
This question was submitted earlier by Paul Crawford: Given that Aeroplan receives compensation (read: money) for every mile distributed to collectors through the various travel and retail options available within the program (and the cost incurred by each passed along to us in the prices of goods and services), how do you counter the argument that the recently announced service charge on award tickets are tantamount to a redemption fee on miles already paid for by collectors?

Rupert Duchesne
The miles are paid for by collectors. However, the same collectors want a lot more from the program. At a time when I believe you'll see almost all airlines offer fewer FF benefits program development cannot be funded by the airlines. I think small fees (which are common in almost all service industries) are justifiable if the member gets advantages back in return and we've demonstrated in the last 18 months we can do just that TQ

jral
How do you cope with getting bombarded with hundreds of angry e-mails after you make these changes? : )

Rupert Duchesne
I try to answer many of them myself as Muskoka and others know. The others are answered by my VP Customer Service and her team. I'm not shy about facing the members as you know and I actually appreciate the feedback unless its offensive in which case I couldn't care if the person never gets a reply or remains in the program. TQ

MoreMiles
Why do you believe that a fee surcharge will generate more revenue? Don't you think people will simply reduce flying or switch airlines and reward companies? All the predictions / budgets based on assumption of customers maintaining same flying pattern have been wrong in the previous years. Isn't it more financially dangerous to Air Canada / Aeroplan to assume that customers will continue paying extra without bringing their business elsewhere?

Rupert Duchesne
Frankly we did a post audit of the situation last year - we did lose a few flyers but detailed analysis showed that we remained revenue-constant - we also got support from those that bought higher-yield tickets (the silent majority!). While you won't like me saying so the OAG Award demonstrates that we're still a pretty good program by global standards. TQ

YYCOllie
How often do you read flyertalk? :)

Rupert Duchesne
often enough to know what the beef-of-the-week is! TQ

Mikel at WebFlyer
This question was submitted earlier by ac/elite: My question pertains to Maple Leaf Lounge access for Elite members. The guide says that we may bring a guest into the lounge on "international flights". This is a change from the wording last year which was "intercontinental" flights. Please clarify whether this means that we can bring a guest into the lounge on flights from Canada to the U.S. Please also confirm whether MLL access will be an Elite benefit in 2004.

Rupert Duchesne
Yes you can bring a guest into the lounge on Canada-US for no fee. I won't comment on 2004 benefits but I've made my views clear on this before - we know it's almost the most valuable benefit and much much better than the US programs - I;m sure you guys don't want parity in this area?? TQ

Mikel at WebFlyer
This question was submitted earlier by keithguy: When questioned about the new booking fee, why are Aeroplan agents telling callers that other airlines have the same booking fee when this is not the case? Other North American airlines only require fees for "express redemptions" (such as 10 days prior to departure)?

Rupert Duchesne
The agents are well briefed but sometimes are not as well informed as some of you. What they are saying is that US carriers have fees but different from ours - pls see previous answer re percentages etc TQ

ACDUDE
Are there any more plans to introduce Electronic U/G certificates?

Rupert Duchesne
Believe me we'd love to see this and had a project scoped that got iced because of the AC financial meltdown - and this IT investment is on AC's systems primarily. It would make everyone's life easier except for those who use the certs fraudulently. TQ

Mikel at WebFlyer
This question was submitted earlier by jral: Hello Rupert, It's fair to say that most Aeroplan members are quite displeased with the pending introduction of booking fees and fuel surcharges for reward travel. This makes Aeroplan among the first frequent traveller programs in the world charging for advance-booked travel and feels like a slap in the face to those of us who have been fiercely loyal to Air Canada for decades. You have declared that the booking fee will be waived from July 1 03' through January 1 '04 for reservations made online. However, Aeroplan's online engine has no current provisions for bookings that involve a STAR Partner airline like UA, NZ or LH or for those which require a stopover or open-jaw. I find that rather unfair, given that a high percentage of reward travel involves these 'extras.' Does Aeroplan expect to add these further capabilities to the online booking tool by the end of June? I certainly hope it's in the works.

Rupert Duchesne
I answered most of this earlier and they won't be all there by July - we'll roll them in as fast as we can do the programming. TQ

Empress
Why are fuel surcharges only charged on Domestic ticket and not international tickets?

Rupert Duchesne
International rules mean that AC'd have had to add all sorts of other charges once they'd added fuel so they kept it to the bare minimum while trying to support the massive fuel-price increases the airline faced. As fuel prices fall and STAY down AC will change this surcharge as it's done over the last two years and it will go once fuel is at a manageable level TQ

Mac
Aside from cash to AC, what benefits will Onex bring to Aeroplan and its members?

Rupert Duchesne
It will bring capital and development expertise - Onex have grown some great businesses like SkyChefs and Celestica and we're confident they'll help us do the same TQ

fromYYZ_flyer
I would like to see more off plane places to get miles, any new partners coming?

Rupert Duchesne
Yes there will be more over the next 18 months including we hope at gas stations, drug stores and more financial products from our card partners TQ

Mikel at WebFlyer
This question was submitted earlier by StuMcIlwain: How will the new fees affect Aeroplan's ability to compete with other frequent flier programmes, all of which do not charge these fees?

Randy Petersen
Looks like Rupert wants to answer additional questions beyond the hour - so thanks Rupert and let the questions continue.

Rupert Duchesne
I've answered this and other programs do as I';ve said and may actually generate more revenue than we're going to BUT I don't agree with the way they do it so we'll do it our way here at Aeroplan. TQ

AC*AP*FQTV
The current operational practice for courtesy/complimentary upgrades on oversold flights is a distinct pleasure when it occurs. But the FQTV lists are sorted with a logic that includes alphabetical order which in essence and nature is discriminatory. Would it not make more sense to auto-compile a list generated by affinity/loyalty to AC (SE, E, Star Gold etc.) by tier level + fare paid + time of booking then time of check-in… i.e. reward to first come, first served and not Alpha before Zulu?

Rupert Duchesne
Yes it would but yikes! The IT costs would be "big". If there's a res system re-write (which you'll have seen AC is considering with some Star partners) then this is the kind of thing we will see but likely not unless.... TQ

Mikel at WebFlyer
This question was submitted earlier by sing-along: Mr. Duchesne, thank you for taking the time to answer our questions tonight. In your last session on FT chat, March 2002, in response to a question about waiving fees for top tier members you responded by saying “to maintain fast top-tier service levels, we need to compensate for often very frequent changes many Es and SEs used to make. Most service businesses charge “convenience” fees – often very steep such as a $15 fee to book $50 theatre tickets online – and our industry is going that way as it realizes that we can’t lose billions ad infinitum TQ”. My question: Aeroplan is profitable in the hundreds of millions of dollars and is **not** in bankruptcy protection (CCAA) like Air Canada. If your company, Aeroplan, is not losing money, how can you justify charging the fees for all members, especially your top tier flyers – those that earn their status by actually flying Air Canada? Further, Aeroplan, had made a commitment of announcing any changes to the p

Mikel at WebFlyer
(cont) prior to January 1, 2003? Thank you.

Mikel at WebFlyer
We have temporarily lost contact with Rupert. He is trying to log back in right now. Sorry for the inconvenience.

Rupert Duchesne
Sorry guys - we're back TQ

Mikel at WebFlyer
This question was submitted earlier by keithguy: Why has there been no mention of one-way awards in the Aeroplan 2003 Elite Benefit Guide or at Aeroplan.com?

Rupert Duchesne
They're on the slate and should be coming on Aeroplan.com at some point. At the moment it's by request only TQ

Howard
As an Elite member on AC, I cannot get an instant KK award in J, even for double miles. As a basic member on UA however, I can get an instant KK award in Business with additional miles. Why not open up instant KK for double miles for J seats at least to Elite members?

Rupert Duchesne
Just to go back to the other Question: we don't make a big profit - actually below normal financial ratios and we cannot invest more without such fees and outside investment from eg Onex. This question: This is an AC decision and gets reviewed annually - we'd like to see J instant KK at the same time I';ve already said that we're not going to be carbon copies of each US program TQ

Randy Petersen
Another overtime Q/A session with Aeroplan. Thanks for those of you who took time out to chat with Aeroplan and as I mentioned at the top of this chat, Rupert has been terrific about coming on to chat with the members of Aeroplan. Whether the answers you saw tonight or looking over the transcript tomorrow, we hope you found some information valuable to you as a member of Aeroplan.

Randy Petersen
Huge thanks to Rupert and continued success there at Aeroplan.