Valuation of Aeroplan Points – The Realistic Example

I am going to touch upon a controversial topic in the miles and points space; valuation of Aeroplan Points. Existing online literature suggests anywhere between anywhere from 1.92 cents per point to 2.1 cents per point. This valuation might be on the lower side if you tend to redeem points for international business and first class trips. However, that is not the target for a vast majority of consumers. For most consumers, their valuation is far lower, which I want to explore further in this article.

Different Ways to Quantify the Valuation of Aeroplan Points

There are typically two different ways used to quantify the valuation of Aeroplan Points:

1. What is the dollar value of the redemption had you been paying money for the same set of flights, or,
2. What is the maximum willingness to pay for the redemption.

Both calculations have issues. A common click-bait article title might be how you can redeem 70,000 Aeroplan Points to redeem a ticket worth $11,000 from Europe to Canada. However, for all practical purposes, you can typically find round trip Business Class tickets for $3,000 to $5,000. Airlines typically price one-way flights exorbitantly, and that is an unfair value inflation of Aeroplan Points. No, your Aeroplan Points are not worth 10 cents a point.

The alternative is, how much would you have been willing to pay in cash for the exact same redemption? Imagine a familAll Postsy of four redeeming 560,000 Aeroplan Points (70,000 Aeroplan Points, per direction, per person) for Business Class tickets across the Atlantic Ocean. I personally find it hard to believe, they would have paid $11,200 each for the same flights instead. Instead, their maximum willingness to pay was only $2,100 per person. Their Aeroplan Points might be worth closer to 3 cents a point.

There is a third approach, which is the approach I am going to focus on for the purpose of the article. Realistically, most Aeroplan Points redemptions are used for dynamic award redemptions designed to help save customers money on their annual vacations. Since they represent the vast majority of customers, I will be using this approach to determine the valuation of Aeroplan Points. However, a massive disclaimer will apply that you can, with a bit of effort, get far more value of your Aeroplan Points than listed in this article.

Aeroplan Points Valuations on Selected Routes

I am going to focus on a few selected routes across four different time periods; October, December, & February. In addition to that, I will focus on the following routes:

• Vancouver to Toronto, round trip (Domestic), and,
• Toronto to Orlando, round trip (Trans-Border), and,
• Toronto to Frankfurt, round trip (Europe), and,
• Vancouver to Seoul, round trip (Asia).

Some basic criteria (no pun intended):

• We will use Standard Fare for comparison. Most customers do not redeem or pay extra for Flex or Latitude Fares
• My comparison included a discount for elite status and holding the premium Aeroplan credit card. Regular valuations will be slightly lower than my research below.
• I will not “buy” any Aeroplan Points when I am asked to select a redemption level, however, I will pay for the taxes using cash.
• We will use the following three date criteria:
  • A week long trip in October, and,
  • A Christmas vacation in December, and,
  • A long-weekend trip in February (week-long for international itineraries).

Valuation of Aeroplan Points on Domestic Flights

Valuation of Aeroplan Points on Trans-Border Flights

Valuation of Aeroplan Points on Europe Flights

Valuation of Aeroplan Points on Asia Flights

Conclusion

Let’s state the obvious. Each Aeroplan Point is worth between 1.26 and 1.68 cents per point. With dynamic pricing, there will always be a range of valuation, which is exactly what we observe right now. This is well below the range of 1.92 to 2.1 cents per point.

Technically, you can exceed the valuation of those points by identifying the lowest Business Class award seats that bloggers and influencers love to sell. Realistically, for the once a year annual Christmas vacation, it will be nearly impossible to identify the lowest award rates for their preferred travel dates. They will most likely be beholden to dynamic redemptions on Air Canada.

There are too few data points to do any comprehensive analysis, however, I think it is quite clear from our limited data set, that Trans-Border flights represent the best valuation of Aeroplan Points.