American Express has finally made its foray into the Canadian miles market with the AeroplanPlus charge card. The card comes in three versions — Blue, Gold and Platinum — with fees ranging between $60 and $399 a year.
Platinum customers earn 1.25 miles per dollar charged, up to $25,000, and 1.5 miles per dollar after that. During its inaugural year, the card will also reward its big-spending holders with additional miles equal to 10 percent of purchases, and a welcome bonus of 5,000 miles. Platinum members can also count on Maple Leaf Lounge and Arrivals Lounge access, Air Canada Executive First/Executive Class priority check-in, and an annual companion ticket for use upon purchase of a full-fare ticket.
The Gold card, available at an annual fee of $120, offers one mile per dollar up to $10,000 annually, and 1.25 miles after that. New applicants will also net the 10-percent bonus, in addition to a welcome bonus of 5,000 miles and a companion ticket in the first year of membership — again, for use upon purchase of a full-fare ticket.
The Blue card earns one mile per dollar and comes with a welcome bonus of 2,500 miles.
The move is unusual, as it is extremely rare for a program like Aeroplan, which already offers the CIBC Aeroplan Gold Visa, to partner with American Express.
Aeroplan is a unique case, though. Air Canada has been in bankruptcy since April of 2003, and has been actively renegotiating its contracts.
CIBC agreed to pay an extra premium for its share of Aeroplan business, and American Express, by sweetening the pot with an $80 million loan to the struggling airline, was given the rights to release its own Aeroplan product.
Not surprisingly, CIBC was not enamored with the idea of a competing Aeroplan AmEx charge card.
“We’re still the Number 1 premium card in Canada,” Ernie Johannson, CIBC’s vice-president of marketing, told the Toronto Star. “An important part of this is that Canadians still prefer the flexibility of credit cards over charge cards.”
Within hours of the American Express announcement, CIBC countered with enhanced benefits for Visa card holders, including a “special customer appreciation” offer which promised a free ticket following the purchase of a full-fare, first-class or economy ticket.
In addition, CIBC is touting a new benefits package for $199 annually that provides Maple Leaf Lounge access, priority check-in, a two-for-one ticket coupon and supplemental medical insurance.
“By adding more travel benefits to the card, we’re confident the CIBC Aerogold will continue its market leadership,” Johannson told the National Post.
And Aeroplan itself seems to be responding to competitive pressures as well. Chief Executive Rupert Duchesne told reporters in a conference call that the program might eliminate blackout periods.
Duchesne said that the move might be part of larger “tweaking” of Aeroplan rules to make the program more appealing to consumers, who are being lured away by competitors like Royal Bank of Canada’s Avion program.
Duchesne also hinted that members will soon have more retail mileage-burning options.
“There will be a number of changes we will be introducing through 2004,” Duchesne said. “We won’t detail them now, but they involve more flexibility as to when members can redeem and a greater number of redemptions available.”