A little experiment that I ran several months ago has finally borne fruit, and the results are pretty exciting!
Air Canada’s Flexible Rebooking Policy
Back in the summer of 2020, Air Canada introduced a new “Ready for Takeoff” flexible rebooking policy to provide passengers with assurance during these uncertain times.
(With the pandemic ongoing, this policy has now been extended several times on a rolling basis. The current policy ends on April 30, 2021, but I would be surprised if it wasn’t extended further beyond that date.)
Customers who wish to cancel their travel plans were understandably unhappy that they were not being offered a full refund, but rather only a 24-month credit for future travel on Air Canada, so the airline decided to offer two additional options instead:
- Air Canada Travel Voucher: Instead of a 24-month credit, customers could instead opt for a flexible Travel Voucher which had no expiry date and could be shared with other passengers, similar to a gift card.
- Aeroplan miles/points: Customers could choose to convert the value of their ticket into Aeroplan miles (back then) or Aeroplan points (now) with a 65% bonus on top of the usual rate of 3 cents per point (cpp), thus at an effective value of 1.8cpp before factoring in sales tax.
The second option definitely sounds more interesting, since it’s essentially a way to buy Aeroplan points at 1.8cpp for as long as the flexible policy is in place.
I had conducted a test run of this process to demonstrate that sales tax is not levied – and therefore the “true” 1.8cpp purchase price is achieved – if you include a non-Canadian address on your Aeroplan profile. Back then, it took about six weeks for my Aeroplan miles to deposit to my account, although that process seems to have gotten much quicker in recent months.
If you go back to that article, you’ll see that one of the lingering questions was: “What about tickets issued by travel agencies?”
Indeed, when the policy was first launched, it was only valid for bookings made directly with Air Canada. If you had booked through a travel agency (including redeeming third-party points currencies for Air Canada flights), then you were still limited to a 24-month travel voucher for the time being, and Air Canada had stated that they were “working on making these additional options available” to their travel agency partners.
Well, at least one travel agency – American Express Travel – has gotten the memo by now, with very interesting implications arising as a result.
American Express Travel Bookings Are Eligible
I had made a test booking through American Express Travel back when the Ready for Takeoff policy was first announced: Vancouver–Calgary on Air Canada economy class.
I was especially interested to see if I could convert the value of this ticket into Aeroplan points with the 65% bonus in place.
Over several months of back and forth, it was clear that Air Canada was taking their sweet time in allowing third-party travel agencies to access these flexible rebooking policies.
In November 2020, however, I finally received a response: Yes, American Express Travel was indeed able to request the conversion to Aeroplan points with a 65% bonus on my behalf!
I was informed that the conversion to Aeroplan points would indeed follow Air Canada’s policy of offering a 65% bonus on top of the usual rate – which is to say, the value of the ticket would be exchanged at an effective rate of 1.8cpp, after backing out any applicable sales tax.
However, American Express Travel advised that they could not confirm the exact amount of Aeroplan points to expect after the 65% bonus. They also mentioned it may take up to two months to receive the points.
Even though American Express Travel could not confirm the exact amount, I went back to my statement and saw that the booking had originally incurred a charge of $407.66 on my credit card statement, so I assumed that that’s the amount being used for the conversion.
Note that, at the time of running the experiment, my Aeroplan account had an Ontario address listed as the primary address.
(Even though putting down a foreign address would result in earning more Aeroplan points thanks to the absence of sales tax, I was more interested in the proof of concept here than necessarily maximizing value.)
Therefore, with a ticket amount of $407.66, I was expecting to receive 20,042 Aeroplan points at the other end. The exact math here, backing out the 13% Ontario HST, looks as follows:
40,766 cents / 1.13 / 1.8 cents per point = 20,042 Aeroplan points
After going ahead and instructing American Express Travel to proceed with the request, the waiting game began…
Aeroplan Points Have Finally Posted
Even though American Express Travel had warned that it may take up to two months to receive the points, in reality, it took almost exactly four months – from late November to late March – to see the points arriving in my Aeroplan account.
The number of Aeroplan points was exactly what I was expecting: 20,042 Aeroplan points.
What’s the implication here? Well, think back to the Vancouver–Calgary test flight I had booked via American Express Travel. Did I pay $407.66 in cash for this flight?
No – I booked it with 15,000 Amex MR Select points + $107.66, with the MR Select points covering $300 worth of the base fare as part of the Amex Fixed Points Travel reward chart.
Indeed, after the $407.66 charge showed up on my statement, it was subsequently offset by a $300 credit from American Express Travel.
That’s the underlying logic behind the Amex Fixed Points Travel program, after all: you’re essentially paying for cash fares and then using MR points or MR Select points to offset up to a certain maximum base fare, at a value of up to 2cpp.
It’s worth considering how many Aeroplan points I would’ve earned if I had a foreign address listed on my account. In that case, there would be no sales tax being backed out, and the math would look as follows:
40,766 cents / 1.8 cents per point = 22,648 Aeroplan points
Essentially, it’s possible to convert 15,000 MR Select points + $107.66 into 22,648 Aeroplan points!
It’s a backdoor method to convert MR Select points into Aeroplan points at a rate of about 1:1.5, with a “fee” of about $100 for every 15,000 points converted and a four-month waiting period.
If you don’t want to pay a “fee”, recall that I could’ve covered the extra $107.66 using 10,766 MR Select points, too.
In that case, I could’ve converted 25,766 MR Select points into 22,648 Aeroplan points, thus achieving a “true” transfer ratio of 1:0.88.
(However, in my view, it’s optimal to go ahead and pay the cash “fee” anyway, and save those extra 10,766 MR Select points towards another chunk of 15,000 MR Select points that you could convert!)
Consider the elevated signup bonus of 45,000 MR Select points on the American Express Cobalt Card and its 5x earning rate on everything you can buy at the grocery store. Those are now looking a lot more interesting, aren’t they?!
Similar experiments are now underway via the RBC Avion and CIBC Aventura programs, both on my own end and within the wider community, I’m sure. I’d invite you to carefully consider the implications if those experiments turn out with similar results.
Air Canada’s flexible booking and refunds policy has been extended to bookings made by some travel agencies, including American Express Travel.
I was able to convert a ticket originally booked with MR Select points into Aeroplan points at a favourable ratio. This is an exciting, albeit temporary, opportunity to parlay your MR Select points earnings into Aeroplan points at a better ratio than the traditional method of going through Marriott Bonvoy as an intermediary.
Have you booked any flights with Air Canada through third-party travel agencies for which you might wish to ask for a conversion into Aeroplan points? Is your travel agency able to request an Aeroplan conversion on your behalf yet? Let us know in the comments below.