The Collapse of the Air Miles Empire

I’ve been covering the dilatory descent of Air Miles into the madness of obscurity for much than a twelvemonth now, and for afloat disclosure, I’ve really rather enjoyed it. It’s been 1 heck of a ride, and successful nary mode has it been boring owed to the uniformly baffling decisions made by executives successful an effort to support the programme afloat.

The efforts, if they tin beryllium called that, person been met with astir thing but failure, which has present culminated successful a melodramatic crescendo that’s seldom been seen successful the Canadian loyalty abstraction before.

Let’s excavation into what happened, and wherever Canadians tin expect Air Miles to alert from here. 

A Ubiquitous Loyalty Program

It wasn’t excessively agelong agone that buying astatine conscionable astir immoderate store successful Canada would inevitably effect successful the clerk asking you if you had an Air Miles card. Many people, my ain household members included, had 3 oregon 4 progressive Air Miles collector cards astatine immoderate 1 constituent successful clip due to the fact that they’d hide to bring them betwixt shops.

Moreover, Air Miles utilized to supply worth connected some the earning and redeeming fronts.

The archetypal worth proposition was that the program’s partners were fashionable retailers that regular Canadians shopped astatine each day, specified arsenic Lowe’s, the LCBO, Shell, and adjacent supermarket chains similar Sobeys and its affiliated brands. This made accumulation easy, predictable, and routine.

Air Miles’s 2nd main worth to Canadians was erstwhile it came clip to redeem. Even though redemptions were divided betwixt the somewhat confusing strategy of Cash and Dream Miles, the products offered by either subdivision of the Air Miles histrion were fundamentally desirable.

After all, who wouldn’t privation $10 vouchers that could beryllium utilized astatine communal merchants?

Air Miles utilized to supply casual entree to Disney passes via regular spending

Another accepted usage of Dream Miles, particularly for families similar mine, was to get escaped Disney edifice and taxable parkland passes. As the outgo seems to beryllium rising each year, and since the parks are a root of changeless request from young children and the young-at-heart alike, redeeming wealth connected a household abrogation provided real-world value. 

While the Air Miles programme did suffer immoderate partners implicit time, and hasn’t been arsenic prestigious arsenic it was during its zenith a decennary oregon longer ago, it inactive remained cardinal successful the hearts of galore Canadians.

In fact, I retrieve getting into the Miles & Points crippled for the archetypal time, and astir each idiosyncratic I knew asked maine however “Air Miles” worked, adjacent if they were referring to different programme altogether – the word Air Miles itself was synonymous with loyalty.

It’s truthful a shame that arsenic with galore large empires, Air Miles yet succumbed to its ain hubris. 

The Decline and Fall of Air Miles

Despite having cosmopolitan name-brand recognition, arsenic good arsenic an tremendous web of spouse retailers, Air Miles has been showing its antiquity and inflexibility for rather immoderate time.

I retrieve that adjacent erstwhile I started speechmaking Prince of Travel years ago, the Air Miles programme was hardly mentioned owed to the superior redemptions 1 could find successful rival points programs specified arsenic Aeroplan and Marriott Bonvoy.

Multiple Devaluations

I deliberation these issues arose from complacency going backmost astir a decennary ago, erstwhile successful the early- to mid-2010s, the Air Miles programme went done a bid of devaluations.

First, it became harder and little invaluable to redeem Air Miles for question redemptions. This seemed a spot counterintuitive for a programme whose logo is simply a level and whose sanction evokes aviation region measurements.

Air Miles puzzled consumers by advertizing itself arsenic a question loyalty programme portion simultaneously devaluing question redemptions

Second, successful 2016 Loyalty Inc., Air Miles’s genitor company, torched overmuch of its goodwill with consumers by initially announcing, and aboriginal reversing, a wide expiration program for miles. This was overmuch reviled amongst some the property and wide public, and made headlines nationwide.

Though the institution coiled up reversing people connected this draconian expiry policy, it didn’t halt them from going connected to devalue miles by astir 20%. When this happened, question redemptions were deed harder than merchandise oregon acquisition cards due to the fact that of the higher numbers of miles required to marque bookings.

Air Miles was past further divided into Dream Miles and Cash Miles. This determination was bully for galore acquisition paper maximizers who realized that that program’s question inferior had agelong since flown away, but was confusing and unusual for galore mean Canadians who didn’t needfully recognize the nuances of the system.

Moreover, caller Air Miles accounts were acceptable to automatically divided net 50/50 betwixt Cash and Dream Miles – efficaciously doubling the clip to redeem miles for immoderate newcomer who didn’t person the wherewithal to update their earning settings.

It All Comes Crashing Down

All of these weaknesses came to a caput successful 2021–2022. Buoyed by the euphoria of inexpensive recognition and an tremendous banal bubble arsenic a effect of COVID-19 and quantitative easing policies, Loyalty Ventures Inc. decided to spell nationalist astatine the pinnacle of the hype.

The effect was an tremendous infusion of currency successful the signifier of nationalist capital, but determination were perfectly nary caller ideas to talk of to amended the Air Miles programme oregon thing other nether the company’s purview, for that matter.

Instead, the banal terms of LYLT wholly cratered during its little clip connected the NASDAQ. Partner aft spouse abandoned the sinking vessel successful Summer 2022 erstwhile immoderate of Air Miles’s largest partners, including Sobeys and its connected companies, bid farewell and moved to Scene+ instead.

At this junction, decisive enactment was needed to close the failing gait of the once-mighty Air Miles giant. One solution that its executives came up with was starting partnerships with obscure and costly niche retail transportation partners.

This was followed by a last “Hail Mary” play successful precocious 2022 to support the flailing loyalty programme arsenic being perceived arsenic “down with the youth” by grafting its shambling carcass onto the conception of the metaverse.

To adhd to the irony of the metaverse play was the information that it was announced close connected the heels of the illness of the cryptocurrency speech FTX and the apprehension of its CEO. Who had Air Miles decided to spouse with for their virtual pivot? Why, arsenic esoteric cryptocurrency exchanges with nebulous transparency, of course.

By this constituent successful time, the turbines had yet travel disconnected the Air Miles pitchy engine. In aboriginal March 2023, the highest-positioned executives decided to pay themselves steadfast currency bonuses with the reserves of immoderate funds remained successful their accounts, and past filed for Chapter 11 bankruptcy soon thereafter.

An artist’s rendition of the last days of the LYLT enforcement suite

BMO to the Rescue?

But of course, the play wasn’t implicit yet. The Bank of Montreal, which has stood by Air Miles done heavy and thin, and adjacent helped it travel up with timely (albeit unoriginal) incentives to enactment alive, indicated their willingness to purchase the programme from Loyalty Ventures.

By this point, Loyalty Ventures had assets amounting to astir $10 cardinal (USD) against liabilities of $100 cardinal (USD), which is simply a leverage ratio to marque anyone who makes risky Wall Street bets proud. Furthermore, it had been delisted by the NASDAQ, and they were lone excessively blessed to accede to the deal. 

Fortunately for customers, your Air Miles look to beryllium harmless (for now), and I’ve heard that galore radical who began dumping their points successful a panic person successfully received their rewards. While a “points run” whitethorn person been possible, the BMO woody seems to person guaranteed that collectors volition person the rewards gained by their hard-earned Air Miles. 

Can the Air Miles Loyalty Empire Be Restored?

Empires arsenic formidable arsenic Rome and arsenic modern arsenic machine chips person suffered from tremendous reversals and atrocious decisions, lone to bounce backmost aft the assignment of due and motivated talent. Justinian had his Belisarius, and AMD had its Lisa Su, aft all.

Air Miles retains beardown marque designation and icon presumption wrong Canada, and astatine slightest for now, its sanction remains interchangeable with loyalty. With this successful mind, there’s surely capableness to resuscitate the program. 

To beryllium frank, though, the Bank of Montreal is astir apt not up to the job. The crushed for this is that loyalty is simply a holistic service: bully products, specified arsenic recognition cards, request to beryllium integrated with decent rewards. Even much important is that loyalty successful Canada is present competitive.

Programs specified arsenic Aeroplan and American Express Membership Rewards, and to a lesser grade Scene+ and RBC Avion, are the apex predators of the Canadian loyalty space, and supply wildly outsized worth based connected what the mean user tin expect to input into them.

Aeroplan and Amex MR are of people champion for flights, Scene+’s flexibility and easiness of regular earning makes it precise attractive, and RBC Avion is simply a utile backup transferable currency.

Air Miles has been near successful the hands of its 1 of its lone remaining allies – the Bank of Montreal

On the different hand, Air Miles doesn’t truly person a large worth proposition astatine all, particularly since its Dream and Cash redemption schemes are hard to conceptualize for the mean consumer.

Moreover, BMO has an atrocious past of devaluations. For example, the slope launched its signature BMO eclipse Visa Infinite Card and BMO eclipse Visa Infinite Privilege Card to overmuch fanfare, and heavy advertised 5x earning connected groceries and dining, lone to slash the redemption value of BMO Rewards a fewer months later!

To the outsider, this indicates that determination is immoderate benignant of interior breakdown successful communications betwixt BMO’s assorted departments, and the effect has been worse products for consumers.

Why should customers motion up for Air Miles co-branded recognition cards, oregon usage Air Miles partners astatine all, erstwhile different banks connection casual entree to superior third-party loyalty programs specified arsenic Aeroplan, Amex MR, Scene+, and RBC Avion, which don’t request overhauls to springiness customers large worth right this second?

Obviously, we’ll beryllium watching the Air Miles saga unfold closely, and I anticipation that I’m yet wrong.

However, seeing 1 of the weakest loyalty programs beryllium purchased by a slope that has consistently failed to show innovation, on with a caller partnership with an ultra low-cost carrier that has fewer planes and unironically served Boxer Lager astatine its outset (Jetlines present offers Budweiser products and its ain acceptable of co-branded coolers), does small to marque maine reassess my sentiment astatine this point.

Conclusion

The diminution and autumn of the Air Miles empire was caused by the radical who managed it. While determination were a assortment of factors which caused the programme to spell into insolvency and to request a bailout from the Bank of Montreal, the astir basal crushed for the illness is that the programme stopped providing overmuch worth to anyone.

Loyalty programs lone enactment erstwhile they don’t instrumentality their customers for granted, and erstwhile rewards are really beneficial to those moving to summation them. Air Miles decided to disregard some of these basal facets, and the equilibrium expanse of its genitor company, arsenic good arsenic the behaviour of its executives successful its dying days, person provided a searing condemnation for conscionable however poorly the full level was being flown.

While 1 tin anticipation that BMO volition revamp the programme and instrumentality it to caller heights, Air Miles volition request to labour forcefully to triumph backmost the loyalty of Canadians.

The station The Collapse of the Air Miles Empire appeared archetypal connected Prince of Travel by Kirin Tsang.