Air Canada and JPMorgan Chase have today announced a new multi-year strategic partnership for US consumers. In late 2021, Aeroplan will join the Chase Ultimate Rewards ecosystem as a new 1:1 transfer partner, and will also launch a new co-branded Aeroplan credit card by Chase on the Mastercard network.

Aeroplan Will Join Chase Ultimate Rewards

Aeroplan will become a new 1:1 transfer partner of Chase Ultimate Rewards, which is the points currency earned on Chase’s family of popular travel rewards credit cards, such as the Chase Sapphire Preferred, Chase Sapphire Reserve, Chase Freedom Flex, etc.

This is a welcome addition to Chase’s current set of transfer partners, among whom I haven’t seen too much value on the airline side.

With the new Aeroplan program offering many unique sweet spots and better opportunities to book premium travel for good value compared to its peers in the market, I suspect that many collectors of Ultimate Rewards points will be making use of Aeroplan as a new 1:1 transfer partner.

Aeroplan’s existing partnership with American Express US (at a 1:1 ratio) and Capital One (at a 2:1.5 ratio) will remain in place, meaning that the program will have a total of three partnerships in terms of converting credit card points down in the US.

Coming in 2021: The Aeroplan Mastercard by Chase

Until a few years ago, TD Bank was the issuer of Aeroplan’s US co-branded credit card under the legacy program. That product was discontinued in advance of the new program’s launch, and evidently Aeroplan has decided to fry some bigger fish in searching for a new US card issuer.

As part of the new partnership, Chase will become the exclusive issuer of the Aeroplan co-branded credit card in the US, launching a new product in late 2021 on the Mastercard network.

Details about this product are scarce for now, but I’d expect the card’s benefits, features, and welcome bonus to be sufficiently innovating and rewarding to make a splash in the highly competitive US credit card market.

(At a minimum, the co-branded card will allow US-based Aeroplan members to access preferred pricing on Air Canada flights through their card membership, just like up here in Canada.)

If I had to guess, based on Chase’s existing lineup of airline co-branded credit cards, I’d expect the Aeroplan Chase Mastercard to fall in a similar range with the core Aeroplan co-branded credit cards in Canada, or perhaps at a level between the core and premium cards, with a price point and benefits package to match.

What Does This Mean for Aeroplan Members in Canada?

While the launch of a strategic partnership with the largest credit card issuer in the US is no doubt great news for US-based Aeroplan members, who can now look forward to an expanded range of opportunities to earn Aeroplan points through their daily credit card usage, it’s worth also considering the implications for Aeroplan’s core member base here in Canada.

I’d say that Aeroplan’s increased involvement in the US credit card market – which will far exceed the level of involvement we previously saw through the TD Bank partnership – represents mixed news for Aeroplan members based in Canada, depending on whether or not you’re able to maximize credit card offers on both sides of the border.

On paper, if US-based Aeroplan members get access to more straightforward avenues for racking up large volumes of Aeroplan points, then that increases the competition for reward seats that we face here in Canada. Seats on partner airlines, especially in premium cabins, will be more hotly-contested and therefore more challenging to book at the fixed price point.

Meanwhile, seats on Air Canada flights will be subject to greater demand through the Aeroplan program, thus potentially inflating the costs of these award flights under the dynamic pricing model.

Thankfully, Canada-based Aeroplan members with strong ties on both sides of the border can hedge against these potentially unfavourable market forces, given that it’s possible for Canadians to apply for US credit cards as well. These members would be able to expand their range of points-earning opportunities through co-branded credit cards in both markets, thus staying ahead of the added demand for seats.

(Indeed, 2020 has given us a whole slew of omens that diversifying into US credit cards can be a good idea if you haven’t already, and I’d say that this announcement from Aeroplan and Chase represents a fitting final installment in those omens.)

Chase typically likes to see at least one year’s worth of US credit history before approving you for your first card, so starting on your US credit card journey now may qualify you for the new Aeroplan Mastercard by Chase just in time for its launch in late 2021.

Along the way, you’ll want to be mindful of Chase’s “5/24 rule” (i.e., Chase will not approve you for a new product if you’ve opened five or more new personal credit cards over the past 24 months), under which the new Aeroplan product will almost certainly fall.

Moreover, it might now be worthwhile to dabble with a wider range of Chase products than just the Aeroplan card – the Freedom Flex with its rotating 5x categories, for example, definitely looks pretty appealing now that Ultimate Rewards can be transferred 1:1 to Aeroplan.

Conclusion

The full launch is still almost a year’s time away, but we’ve learned that Aeroplan and Chase will form a new strategic partnership in the US, launching a new Aeroplan co-branded Mastercard and offering Chase Ultimate Rewards points collectors the ability to transfer points 1:1 to Aeroplan.

This will be very welcome news for US-based Aeroplan members, who will soon have access to a wider range of possibilities for earning Aeroplan points and taking advantage of the new program’s strengths.

Meanwhile, the savvier elements of Aeroplan’s member base in Canada will also stand to benefit here, as they seek to incorporate the new Aeroplan Mastercard and Chase’s other attractive credit cards into their broader US credit card strategy.

I’m looking forward to learning more about the Aeroplan and Chase partnership in the months to come, including details on how the new Aeroplan Mastercard’s benefits and features will be tailored towards the US market.