AEROPLAN 2.0 Transforming the
Canadian Coalition Model Around Member Value
Rupert Duchesne
October 1, 2013
AEROPLAN HAS ROOM FOR STRONG GROWTH IN CANADA
3
Goals Loyalty Currently Capturing Only 50% of Total Household Expenditures
$1B
• Market share leadership
• Outstanding member satisfaction and engagement
• Exceptional value delivered to key partners
• Top line growth and cash flow generation
3.0
1.8
1.3
Market Opportunity
Current Aimia Penetration
Other
STARTING POINT: CANADA’S FLAGSHIP PREMIUM COALITION
4
Canada’s Most Affluent Member Base
4.7 Million Active
Members
Leveraging the power of
our brand and member
base on behalf of our
partners…
…with our members as
our partners’ best
customers
Unique and Flexible Set of Partnership Models
EXCLUSIVE
CO-EXISTENCE
CONVERSION
PROMOTIONAL & OTHER
34 million
Canadians
TRANSFORMATION AIMED AT ADDING GROWTH TO AN IMPORTANT DRIVER OF GLOBAL GROSS BILLINGS
F2012 Aimia Consolidated
Gross Billings
$2.243B Coalition (Loyalty Units) – Canada
Coalition (Loyalty Units)
– EMEA
Proprietary and Other
Gross Billings from Sale of Loyalty Units $1.628B
High Volume Members
Low Volume Members
48%
27%
25%
Canadian Gross Billings $1.292B
34%
17% 10% 76%
24%
5
Canadian Coalition
48%
Canada (Partner A)
EMEA (Partner B)
Canada (Partner C)
Canada (Air Canada)
All Other
34.0%
17.4% 9.8%
15.7%
23.1%
Canada
58%
AEROPLAN’S MEMBER-CENTRIC TRANSFORMATION IS DIRECTLY IN-LINE WITH OUR STRATEGIC PILLARS
Member Value
Partner Value
Coalition Value
Loyalty spend
advocacy
Invest in reward
value
6
1
2
3
4
Strengthen our current position
Codify and replicate successful models globally
Evolve our operating model
Break away from the pack
LAUNCHING A TRANSFORMED AEROPLAN PROGRAM WITH TWO LEADING CANADIAN ISSUERS
* Rankings by purchase volume, 2012., based on Neilson Report, #1015, April 2013, adjusted to
account for the transfer of $20 billion in Purchase Volume from CIBC to TD post the transaction
** The number of cardholders does not include AMEX co-branded cards.
• The $38 billion Aeroplan financial card portfolio,
which represents around 12% of total purchase
volume in the Canadian credit card market and a
total of 1.2 million Cardholder accounts, was
confirmed as an attractive asset due to the
premium nature of the cardholder base
• The transaction shifts purchase volume of
approximately $20 billion from CIBC to TD
• Aimia’s ten year agreements, with two of Canada’s
largest credit card issuers, provide a strong and
stable platform from which to grow
7
1st Largest bank by TPV*
3rd Largest bank by TPV*
4.7m Premium Members
1.2m Premium Credit Cardholders**
+
NEW AGREEMENTS SIGNED WITH TD AND CIBC
• New 10-year financial credit card agreements with each of TD and CIBC
• A purchase agreement between CIBC, TD, and Aimia, pursuant to which TD will acquire approximately half of the Aeroplan card portfolio from CIBC, which at September 2013, represented approximately:
– $38B+ of spend
– 1.2 million cards
– $6B of receivables
• TD purchasing ‘card-only’ accounts; positioned with exclusive right to mass market Aero credit card and broader banking products
• CIBC retaining accounts with banking relationships; positioned to continue originating new credit card accounts within proprietary Bank channels
• Both banks will introduce an enhanced suite of Aeroplan credit cards, including exciting new Distinction and Air Canada benefits from January 2014
8
• Ground breaking transformation of the Aeroplan program, as announced in June 2013, which will drive longer-term growth and benefits to Air Canada
• Momentum and marketing behind the program with two leading credit card issuers to drive market share
• A straightforward conveyance of the Cardholders transitioning to TD, with Cardholders able to accumulate Aeroplan Miles seamlessly through the transition
• A strong and stable platform for Gross Billings growth with our financial card partners, with an increased price per mile and a stable cardholder base
• The balance sheet strength and financial flexibility to continue to invest in growth opportunities
WHAT THE AGREEMENTS DELIVER FOR SHAREHOLDERS
9
Provide differentiated
experience and recognition
based on member value
Address key points of program
vulnerability
Initiate a multi-year journey to
rework the entire member experience
MEMBER-VALUE DRIVEN PROGRAM TRANSFORMATION WILL DRIVE PREMIUM SHARE GROWTH
Our program transformation shifts the emphasis to member satisfaction and engagement as the prime lever to drive growth and value creation
10
11
Source: Aimia estimates
OUR NEW AIR TRAVEL REWARDS WILL BE UNPARALLELED IN THE MARKET
Getting Members to Departures Faster
Months to North American Long Haul Air Reward Redemption Market fare product
Fixed grid product
Notes: 1. Based on combined average card spend and coalition activity, and average Toronto-Vancouver fare 2. Card spend assumed to be the same
for all card products, not disclosed due to confidentiality. 3. Additional spend bonuses estimated for competitive cards (e.g., gas, grocery, drug, travel
spend). 4. Months required to reach reward exclude impact of welcome bonuses. 5. Fare Source: Average fare observed for Toronto – Vancouver
ClassicPlus rewards in 2012, confidential. 6. CIBC Aventura World Elite figure may differ depending on grid pricing at the time of redemption; figure
displayed assumes points required matches RBC Avion (35K).
Aeroplan Market Fare vs
ClassicFlight
Rewards
vs MarketFare
Rewards for
Distinction Diamond
Member
1.1x
1.8x 1.2x
1.8x 1.3x
2.7x 1.8x
1.7x
~12 Months Aeroplan ClassicFlight
Aeroplan CLASSICPLUS
12
WHERE WE WILL GO
• Aeroplan focus is modest growth of premium membership base
• Primary goal is to generate higher gross billings by upgrading the membership profile
• New capabilities and data will allow for more strategic and valuable use of miles (e.g., recent announcement on higher earn rates on higher Air Canada fare class tickets)
4,366
2012
+10%
2010
4,821
2009 2013 YTD
4,570 4,663 4,728
2011
Aeroplan Active Membership Base
Thousands of 12-month Active Members
13
Aeroplan reinvigorated by delivering outstanding member and partner value
Differentiated leadership position built on unique data, brand strength, analytics capability and aligned models
DRIVING CONTINUED LEADERSHIP IN THE CANADIAN COALITION PROGRAM
“Be the recognized global leader in loyalty, inspiring brands to build
unparalleled relationships with their customers by
making engagement more rewarding, lasting, and fun”
Strengthen our current position
Codify and replicate successful models globally
Evolve our operating model
Break away from the pack
Strategic Aspiration Strategic Pillars Vision of Success
1
2
3
4
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