Canada’s two major airlines played a game of flip-flop with their frequent flyer programs last week, simultaneously announcing deals with hotel properties that were formerly partnered with their competition.
Delta Hotels & Resorts left Canadian Airline’s Canadian Plus program to join Air Canada’s Aeroplan, while ITT Sheraton dropped out of Aeroplan to form a partnership with Canadian Plus.
Simon Cooper, president and coo of the 29-property Delta, says that partnering with Canadian may have made sense years ago when Delta was focusing on Western Canada – as was the Calgary-based airline – but now Air Canada seems to be the stronger brand with domestic business travellers.
‘We began to notice about three years ago a shift in our customer base,’ he says, adding that an Angus Reid survey found 75% of Delta’s business customers had flown with Air Canada in the past year.
Rupert Duchesne, Air Canada’s vice-president of marketing, says for both partners ‘our bread and butter is the domestic market.’
He says that Delta is also a good fit with the airline in terms of where the hotel chain is building its business. The Toronto-based hotelier recently penned a deal with Hong Kong’s Lai-Sun concern, which owns 65 Century hotels throughout Southeast Asia, and plans to have 100 properties in that region over the next few years. Montreal-based Air Canada is very much interested in grabbing some of that inter-regional travel business and is building its routes as quickly as possible, says Duchesne.
(On a global scale, however, Delta is still small potatoes compared to Sheraton. The Boston, Mass.-based chain has over 400 properties in 50 countries worldwide.)
The Delta-Air Canada deal, which officially starts June 1, will be promoted through Air Canada’s inflight magazine, along with a May newsletter to some of its three million Aeroplan members. A direct mail sweepstakes will offer over five million Aeroplan Miles in instant prizes, plus a one million mile give-away, through a scratch and win promotion.
Meanwhile, former Aeroplan member Sheraton joins Canadian’s plan on May 1. ‘It’s just a partnership that made a whole lot of sense when we looked at our global reach and (Canadian’s global reach),’ says Lisa Dickason, spokesperson for Sheraton, which has partnerships with 18 other airlines worldwide.
Proving that business travellers may simply be a fickle bunch, Jeff Angel, spokesperson for Canadian, quotes the same Angus Reid poll as Air Canada’s Duchesne and says that fully one-third of Canadian business travellers stayed at a Sheraton at one point in 1995.
Angel adds that the newest member of its loyalty program is a perfect fit. Some of the three million Canadian Plus members will be receiving promotional material in the mail, and more advertising is planned. Either Gee Jeffery & Partners, Canadian Airlines’ agency, or Sheraton’s aor, Ogilvy & Mather in New York, will handle advertising.
For the most part, insiders can’t seem to agree why the about-face for all parties even occurred. Both airlines seem to share the same goal – attracting business travellers regionally and globally – but, like any break-up, pride appears to be preventing anyone from discussing who initiated what. The marketing agreements penned behind closed doors likely hold the answers.
Steven Lincoln, a researcher for Frequent Flyer Services, a Colorado Springs, Colo. firm that studies and ranks miles and points programs globally, describes the switch as ‘strange.’ The two airlines seem to swap partnerships often, he says, especially compared to their u.s. counterparts. ‘It’s all a game.’
A game that pays off, apparently. According to the firm, both airlines rank well in terms of the overall depth of their partnership agreements. The last rating, completed earlier this year, gave Air Canada’s plan an eight out of 10, while Canadian scored 8.4.
Lincoln says Canadian recently adopted a threshold bonus perk, which helped improve its score. (A threshold bonus has cardholders qualifying for a bonus if they reach a certain level earlier than expected.)
