Aeroplan recently introduced cash-free reward flights, which means its members can now book a flight and pay for the entire cost using points. Prior to this, your points would have only covered the base fare of a flight—and not the taxes, fees or surcharges. In an official news release, the loyalty program boasted, “We’re always looking for ways to improve our program based on the evolving needs of our members.”
Awfully nice of Aeroplan, right? Well, yes and no. It all depends on the importance you place upon getting the maximum value out of your points, says Patrick Sojka, CEO of the consumer advocacy group Rewards Canada. “For some people this new option is a great thing. But others will tell you it’s terrible.”
At issue is the actual value of a single Aeroplan point. Sojka explains that when consumers apply points to the cost of a base fare booked through aeroplan.com, they can generally expect to get about 1.5 cents or more for every point depending on the flight route. But, when you apply these same points to the additional taxes, fees and surcharges attached to your total flight cost, the value of that single Aeroplan point is only worth 0.85 cents.
Basically, it’s now going to cost you twice as many points to book a flight completely cash-free, says Sojka. So if you were to book an economy flight to Europe on Air Canada, redeemed completely with points, you could expect to burn through 60,000 points on the base fare and an additional 60,000 points on the taxes, fees and surcharges. “So it now goes up to 120,000 points,” says Sojka. “That’s huge. It’s going to really anger some consumers.”
Still, he suspects the majority of the population will likely be happy they don’t have to shell out a single dime to book a flight. In the above example, paying for the additional cost of taxes and fees out of pocket would add up to $600 to $700—”Money you can use on your actual vacation. Or even in a TFSA.”
One way to get around using up so many points on taxes and fees for cash-free flights is to simply redeem them on routes that don’t have such high charges. Of course, Sojka points out, people who have been frustrated with the program may have no problem using up all their points booking a cash-free flight. “They’re just thinking, ‘I can finally use up all of my Aeroplan points!'”