• Graham

Confused By Aeroplan's 'Variable Pricing'? Me Too.

Updated: Nov 15, 2020

With the launch of the new Aeroplan program in November 2020 comes a completely new way of setting prices for award tickets bought with points, and so far I'm hearing from a lot of people who find it hard to understand.

For background on the new Aeroplan program and the new award model in depth, read our in-depth breakdown of the new program here. The short version is, the old fixed-price model based on 14 different zones is now simplified into just 4: North America, South America, Atlantic and Pacific, with the ability to use points on any flight Air Canada flies, and pricing that basically goes up the further you fly.

Simple is good, and there's some great value to be had in the new program, but the way prices are set by Air Canada's revenue-management software is wildly unpredictable.

Real-Life Examples

Let's start with a simple example: a one-way flight, on points, from Toronto to Vancouver. I picked a boring, low-demand date in mid-January to avoid any confusion from things like the Christmas rush. Under the old program, this award ticket would have cost a fixed 12,500 points no matter when you flew, plus around $100 in taxes and fees.

The following prices reflect the discounted costs I get for having both Aeroplan Elite 75K status, and a TD Visa Infinite credit card.

As you can see, some Economy flights have actually gotten a bit cheaper, in both cash and miles, while other flights on the same date and route now cost more, and the flight that costs the least in Economy, is now one of the more expensive options in Business.

The first place this gets weird is the Business-class pricing on the second and third options. Two flights, on the same route, departing 45 minutes apart, both operated by widebody aircraft with the newest, Signature Class lie-flat 'pod' seats, are 400% apart in price. I can tell you, when I look up both flights in the sales computer, both are wide open in Business class.

The same thing happens again later the same day: the 7 PM flight costs 22,400 points in Business Class, while the 7:30 flight costs 98,400.

I'm not building to a shocking conclusion here, I consider myself an expert in this stuff and I'm as stumped as you are. Searching for more information, I tried comparing to cash fares.

The same flights, in the same order, and while that 18:00 flight is the cheapest in Economy both in cash and with points, I can't explain why all the other flights cost the same in Economy with cash, but the 10:30 and 12:00 flights cost considerably more with points.

I can't tell you why the 8 AM flight costs four times as many points as the 7:15, but the cash fares are identical. I can, at least, tell you that the $1247 Business-class options cost less than the $1602 options because they're operated by smaller aircraft with recliner-style Business seats rather than lie-flat pods, but we don't see a similar discount reflected in the points costs. In fact, all the flights on narrow-body aircraft with the old 'recliner-style' seats, clock in at 55,000 points or more.

Somewhere in the network of algorithms and rudimentary AI that drives this pricing engine, is a piece of data that has told the pricing software to charge more for the mid-day flights that are no use to business commuters, on planes with the oldest and least-comfortable seats, and another piece of data that says busy executives heading to Vancouver for morning meetings will pay a *huge* premium for an extra half-hour of sleep in the morning.

For the rest of us, the lesson here is that the more flexible you're willing to be with the timing of your travel plans, the better deals you'll be able to land.

What Aeroplan Promised

When the 'New Aeroplan' was announced back in August, they told us up-front about the new 'variable pricing' model, and told us that just like cash fares, award prices would go up and down based on demand. On that count, they're doing exactly what they promised, but the devil in these details is a big one.

In the full award chart published back in August, the fine print says "Points displayed are estimated ranges for one-way travel, and are for informational purposes only", which is understandable. It would hardly be surprising to see prices go up the week before Christmas or Spring Break, any more than it would be surprising to see prices go up around the Olympics or the World Cup.

...but this is *way* outside.

Toronto-Vancouver falls into the "1,501 - 2,750" range, which we are told will range in price from 25,000 to 60,000 points in Business Class. It's hard to tell what part of that results in multiple flights on January 12th clocking in at over 160% of the top end of the estimated range for this route; I picked a non-peak date on purpose.

I've reached out to dozens of my fellow flight nerds, and none of us can discern any real pattern here, or any way of predicting which flights will cost massively more than others.

I'll be keeping track of this in my usual obsessive detail moving forward, and if I'm able to learn more I'll share it here!

- G