Amex gets the word out on Canada 3000 deal

For Amex Bank of Canada, the deal means it can once again offer its American Express cardholder base Membership Rewards of domestic air travel within Canada. For Canada 3000, the pact promises more bums in the airline's seats....

For Amex Bank of Canada, the deal means it can once again offer its American Express cardholder base Membership Rewards of domestic air travel within Canada. For Canada 3000, the pact promises more bums in the airline’s seats.

Those, in a nutshell, are the reasons behind a deal announced Aug. 23 between Canada’s third-largest credit card issuer and the country’s second-largest air carrier. In effect, Canada 3000 is taking the place of Canadian Airlines International after the latter dropped out of a similar agreement with Amex last April – a few months after Canadian was acquired by Air Canada.

And now that the ink has dried, Amex is planning a promotional direct mail effort to get the word out to its customer base.

The intent of the solo mailing, says Sue Austin, director of loyalty and advertising at Amex Bank of Canada, will be to outline all of the airline travel options offered through the American Express Membership Rewards program. The mailing will also highlight points-transfer agreements with both Delta Air Lines and Continental Airlines.

It will, says Austin, directly answer the question: ‘How can I use my points for air travel?’

The mailing will also address the concerns of customers not interested in air travel, telling them they can redeem points for discounts on a variety of holiday packages, including cruises.

To date, Amex has done little to promote its partnership with Canada 3000, other than include an insert with the monthly statement of Membership Rewards enrollees, and an article in the member newsletter.

The Canada 3000 deal will be promoted to Amex’s entire Membership Rewards customer base, says Austin, adding that the company wants to build some momentum in the wake of the setback it suffered when Canadian Airlines abruptly called an end to the eight-year relationship between the two organizations.

Amex also wants to head off competitor Diners Club/enRoute, which recently mounted a high-profile, multi-faceted direct response campaign (See ‘Diners Club puts on Aeroplan push,’ Strategy Direct + Interactive, Sept. 11, ’00) to promote its business-class credit card, offering prospects 5,000 bonus Air Canada Aeroplan miles.

While the deal with Canada 3000 bears some resemblance to the deal with Canadian Airlines, there are a number of potentially significant differences.

When the program was aligned with Canadian, for example, American Express Membership Rewards customers were automatically given the same benefits as any Canadian Plus member, including complimentary upgrades where available and access to Canadian’s exclusive Empress Lounge at airports.

Under the new deal, the benefits are mainly those of convenience. Membership Rewards members have been provided a toll-free number that connects them to a designated call centre, and can redeem their points without having to contend with many of the restrictions – such as blackout periods, minimum stays and limited number of seats – that are common to frequent flyer programs. According to Amex, participants can redeem their points for free travel to over 40 destinations worldwide to the last minute and to the last seat available.

Redemption levels start at 20,000 points, depending on the destination. That, says Austin, compares favourably with frequent flyer programs that exert a lot more control over their inventory.

Brad Rawson, vice-president of sales and marketing at Canada 3000, says the airline has no plans to launch a frequent flyer program – or any associated benefits – to compete with Air Canada’s Aeroplan.

‘It’s a cost,’ he says. ‘Any points system is a cost. We just believe in giving [customers] the price up front… Here’s the deal, away you go.’

Nor does Canada 3000 have any intention of introducing business-class service on its flights any time soon, says Rawson. Amex Membership Rewards customers who are pining for a little upscale treatment, can, however, get such service when they fly with Delta or Continental.

While he admits loyalty program deals such as the one with Amex, and the one it struck this summer with Zellers, are good for Canada 3000, Rawson maintains the carrier has not actively pursued such agreements. Rather, he says, if an organization wants to propose an arrangement, and there is a logical fit, then the airline will listen.

‘It’s strictly a commercial agreement,’ says Rawson. ‘They’re just buying the seats from us – simple and neat.’