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Canadian Frequent Flyer Program Faces Class Action

Change in policy led to lost miles

By Jon Hood
ConsumerAffairs.com

July 6, 2009
A group of Canadian consumers has filed a class action lawsuit against Aeroplan, a frequent-flier program spun off from Air Canada. The lawsuit concerns a policy change that resulted in thousands of consumers losing miles they had built up over years as loyal Aeroplan members.

In late 2006, Aeroplan changed its policy, requiring consumers to either redeem or add points at least once every year. Previously, customers only had to do this at least once every three years.

While consumers who lost points to the policy change can technically reinstate them, they must pay a $30 flat fee plus a cent for each mile restored. This means that plaintiffs looking to make long-haul transatlantic flights could end up forking over $1,000 just to use points they had already earned.

The suit alleges that plaintiffs were not properly notified of the change in policy. The plaintiffs specifically claim that letters and e-mails sent to members didn't sufficiently stand out from other routine mailings sent by the service.

The suit seeks reinstatement of any revoked points, $50 in compensatory damages for each affected plaintiff, and punitive damages.

Aeroplan stands by both its policy and the adequacy of notice, stating that it will “vigorously defend any class action, should one be authorized by the court.”

Aeroplan may have enacted the new policy to prevent a “run on the bank” of sorts, in which too many passengers try to cash in on miles at the same time, draining the airline of revenue in an already shaky economic climate.

In May, Aeroplan posted low profits in its quarterly report, citing vastly lower consumer spending. The margin was startling, however; the company took in $23.2-million, compared to $42.1 million just a year earlier.

Currently, Aeroplan has around five million members.

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