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CIBC Aventura Travel Rewards Card Offers Points Redeemable With Any Airline

10/01/2013 06:00 EDT | Updated 01/23/2014 06:58 EST
CIBC/ HO
TORONTO - CIBC is launching an enhanced travellers' loyalty program, making good on its promise to broaden its offerings just two weeks after agreeing to sell about half its Aeroplan customer base to TD Bank.

Unlike Aeroplan — which originated as Air Canada's frequent-flier rewards program — points collected with the new CIBC Aventura cards can be used to buy tickets on any airline.

CIBC has been the main issuer of Aeroplan credit cards for more than 20 years, under a series of long-term agreements that was set to expire at the end of this year.

Over time, however, other banks have brought out other travel points cards to compete with CIBC's Aerogold and Aimia, the company that runs Aeroplan, has added a wider variety of partners such as retailers.

David Williamson, senior vice-president of retail and business banking at CIBC, said Tuesday that the CIBC Aventura lineup was developed "based on extensive research with Canadians on what they want in a travel rewards program.”

The bank said the Aventura cards offer the most choice of any travel rewards program, giving them "the opportunity to choose the rewards program that best meets their needs."

The changes follows a decision by Aimia (TSX:AIM) to pick TD Bank (TSX:TD) as the primary issuer of Visa credit cards for its flagship Aeroplan program. The deal comes with a 10-year term, starting Jan. 1, 2014.

CIBC (TSX:CM), which had been the primary Aeroplan credit card issuer for more than 20 years, contested Aimia's decision and eventually reached a deal that gives each bank the rights to half of the portfolio of Aeroplan Visa accounts.

Williamson said the enhanced program isn't meant to compete with Aerogold but to complement it, noting that CIBC can now appeal to clients who want to fly Air Canada and those who want to fly with other airlines.

"What we want to be able to do for our clients is to offer choice, and I think we're in a unique position to do that," he said in an interview.

"The travel reward business in Canada is a big deal for Canadians, and it's also a fast-growing space. If your objective is to accelerate your revenue growth and improve client experience, it takes you to this area."

He said there was no friction with Aimia over CIBC's new program, which was in the works long before the two parties began talks about renewing their partnership.

"Throughout the whole discussion, because our work was underway on enhancing a fly-any-airline card, that's been fully transparent and out in the open," Williamson said.

CIBC said in announcing its agreement with TD last month that it will keep the half of the portfolio that includes Aerogold customers with broader relationships with the bank. CIBC will continue to issue Aerogold cards for another 10 years, starting Jan. 1.

TD has said it expects to acquire about 550,000 cardholder accounts from CIBC, representing approximately $3 billion in card balances and $20 billion in annual retail spending.

It has promised the transfer of Aeroplan-branded credit cardholders from CIBC will be "seamless'' without any interruption in Aeroplan miles earned by customers.

Aimia also agreed to pay about $312.5 million to CIBC for the shift of half its Aeroplan cards portfolio to TD, with Aimia (TSX:AIM) funding about $150 million of the payments.

CIBC said Tuesday the enhancements to the Aventura program mean customers will be able to redeem their points on any airline, select any destination they want and have access to every seat on the plane.

They will also be able to use their points to pay for flight taxes and fees, and get additional perks like bonus points when they sign up, as well as have the option to earn points faster and opt for trip cancellation or medical insurance.

Anyone who switches to an Aventura card or sets up an account will get up to 30,000 Aventura Points, which would be enough to cover a long-haul flight in North America, since those will be available starting at 25,000 points.

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