Aeroplan says 'blackouts are gone' but what about those fuel surcharges?

Aeroplan, struggling with the perception that its points are difficult and expensive to redeem, says its new redemption system has fixed its most pressing problem: lack of seat availability.

"The days of people talking about blackouts are gone," says John Boynton, chief marketing officer for Canada for Aimia, Aeroplan's parent company. "This is wide open."

Seat availability and fuel surcharges are clearly touchy subjects for the company.

Aimia contacted CBC News, offering an interview with Boynton to address what the company says are public and media misconceptions about Aeroplan, especially regarding fees and seat availability.

Bad press hurts

Aimia took issue with this story, which profiled a Queen's University student who started a business offering to help people struggling to book flights and avoid fees using their Aeroplan points.

In the story, Avery Campbell the student behind the website Awarding Canada was explaining that one way to save fees on Aeroplan tickets is to book seats on flights without fuel surcharges.

"Aeroplan doesn't charge fuel surcharges on all their carriers." said Campbell. "[Taiwan airline] Eva, United, Swiss Airlines, they don't charge fuel surcharges."

An Aeroplan spokesperson wrote in an email: "[We] don't charge fuel surcharges, but instead apply them where applicable on behalf of our airline partners."

To Aeroplan members forced to pay sometimes hundreds of dollars in fees and taxes on what they thought was supposed to be a free ticket, that may sound like semantics.

And the fact is, fuel surcharges remain for Fixed mileage bookings.

Slowly getting better

Still, some in the industry say Aeroplan has made some improvements overall.

Aeroplan has long had two ways to use your points to book flights. Classic uses a fixed number of points per flight for example, 15,000 for short haul, 25,000 for long haul (domestic, in North America).

With Classic however, there are a limited number of seats available per flight, and that has contributed to more than a few Aeroplan members complaining they can't book the flight they want.

Aeroplan also had something called ClassicPlus, where you could access every seat on the plane, but it would cost you more points, in some cases hundreds of thousands more points, making it poor value or even out of reach for many.

About a year and a half ago, Aeroplan changed the name Classic to Fixed and replaced ClassicPlus with something it calls Market Fare Flight Rewards (MFFR). MFFR also allow you to access every seat on every flight but compared with ClassicPlus Aeroplan has cut the amount of points required per flight.

And as the name suggests, the amount of points fluctuates with market demand for that flight, with more required when the price of that seat is high and fewer needed when prices drop.

"So every time there's a seat sale, you automatically go down to way fewer points."says Boynton.

On top of that, Aeroplan added tiers to its membership, based on spending levels using its credit cards, that offer discounts on MFFR tickets. Aeroplan Distinction members can get up to 30 per cent off.

Boynton claims the changes mean Aeroplan has the best value per travel point of any rewards program in Canada.

And all seats can be booked more easily, at least for those with the means to pony up more points.

"We solved the availability issue." Boynton claims.

Business keeps growing

"Market Fares are definitely an improvement over the previous ClassicPlus award structure because it puts those 'last seat' awards within reach." says Jeffrey Kwok, who operates Canadian Kilometres, a website similar to Avery Campbell's offering help with Aeroplan bookings.

"I recall seeing ClassicPlus awards which required an absurd amount of points. Some MFFR's now only require a 30-75 per cent premium on the 12,500 price for a one-way economy ticket within continental North America. That's very reasonable."

Kwok also says Aeroplan is a good value relative to competitors in the Canadian market. He says Avios, the frequent flyer program of British Airways, has lower points levels for flights to the U.S., however. Vancouver to Los Angeles round trip, for instance, is 15,000 Avios points (Aeroplan charges 25,000).

Airline consultant Robert Kokonis says Aeroplan needed to address a critical issue.

Its membership helped by a credit card deal with TD is growing rapidly, now more than five million members, while the number of seats for Fixed rewards has stayed the same.

"Roughly speaking, the capacity commitment from Air Canada to Aeroplan was historically about 8 per cent of seats available for redemptions. And that commitment hasn't changed."

While the number of flights has also grown, Aeroplan still had an availability issue.

It's trying to address that by making MFFR more attractive.

Frequent fliers the big winners

With MFFR, Kokonis says Aeroplan has reduced the amount of points required by between 20 and 25 per cent, which he calls "significant."

Kokonis also points out MFFR also means better access to more direct flights than Fixed.

And unlike Fixed, there is no fuel surcharge MFFR tickets.

"In this case, I think customers have won. It's a better program than it was a year and a half ago." says Kokonis.

Market Fare Flight Rewards don't address every complaint however.

Popular flights will still cost you more points in some cases a lot more with MFFR than with Classic.

This means MFFR still works best for those with high point totals, often frequent fliers, who want use their extra points to book direct flights where the few Fixed reward seats have been taken.

Red eyes and fuel surcharges

That leaves the majority of people with fewer points, forced to often book red eye flights, often with connections and long layovers, often months in advance.

Market Fare Flight Rewards bookings are also only available on Air Canada flights, not on flights operated by other Star Alliance members.

And of course, those fuel surcharges on Air Canada flights booked with Aeroplan Fixed rewards remain.

Although Boynton insists those are out of Aeroplan's control.

"We don't even collect the money," he says. "It's a straight pass-through to the airline."

And the fact that Aeroplan often gets blamed for those charges?

"I think that's the unfair burden we take, for sure." he says.