Aeroplan points are a pseudo-currency, and can be converted into something tangible. When making “purchasing” decisions, it’s a good idea to know what the value of your currency is. That is, is an Aeroplan point worth 1 cent, 1.8 cents, etc. Of course, the value of a point will be different for every person: if your goal with Aeroplan points is to redeem for hotels or a toaster, the value of a point will be much lower than if you redeem for First Class international travel.
I recognize that not everyone has the same redemption goals, so I’m going to estimate the value of a point for the different kinds of collectors: International First Class – Asia, International First Class – Europe, International Economy Class – Asia, International Economy Class – Europe, Domestic/USA First Class, Domestic/USA Economy Class, and Merchandise.
I recognize that my valuations will be inherently flawed, because, inter alia, personal value might not reflect actual value because you wouldn’t ever pay real money for the comparable cash ticket. I don’t know how to overcome these flaws.
The value I’m attaching to an Aeroplan point is not static. Depending on when and for what you redeem, you’ll get more or less value. These are approximations, and I employ the following assumptions:
– I will be doing the routings as round-trip awards
– The award bookings are made anytime of the year, however, the cash bookings will be calculated using prices 6-months out
– I will not be seeking out low/no YQ routes. This won’t affect values on First Class that much, but it will hurt Economy Class values significantly. The reason I’m not trying to find the “cheapest” redemption is because (a) direct routing is more comparable to what someone would seek on a cash ticket, and (b) the average Aeroplan user doesn’t have the expertise to seek out low/no YQ routes. I am selecting the first route in the list that pops up on Aeroplan.
– That if the consumer were to seek a cash ticket/merchandise, they would seek basic but not substantial “deals.” That is, the cash price would not be the most expensive out there, however, the consumer wouldn’t be employing tools, like fuel dumping, to find more significant savings
– Though I know it’s not true, I’m going to assume that all airlines have the same ticket cost for the same class of service. That is, in terms of price, I will assume that United charges the same as Singapore, which charges the same as Asiana, etc.
– Valuation will be calculated as: ([Cost of Paid Ticket]-[Taxes and Fees for Redemption])/[Aeroplan Points Needed]
Obviously this method is not terribly scientific, and your personal CPM on any redemption could be much higher or lower than what I’ve found below. However, this is a generally useful guide to help determine the value of an Aeroplan point.
Note: a higher CPM is “better” as it represents more redemption value per Aeroplan point
International First Class – Asia = 3.1 Cents Per Mile
Toronto YYZ – Shanghai PVG | 210,000 Aeroplan Points + $557.06 Taxes and Fees | Cash ticket is $7,148 | CPM = 3.1
International First Class – Europe = 5.2 Cents Per Mile
Toronto YYZ – Frankfurt FRA | 125,000 Aeroplan Points + $1,053.56 Taxes and Fees | Cash ticket is $7,625 | CPM = 5.2
International Economy Class – Asia = 1.7 Cents Per Mile
Toronto YYZ – Shanghai PVG | 75,000 Aeroplan Points + $107.36 Taxes and Fees | Cash ticket is $1,428 | CPM = 1.7
International Economy Class – Europe = 0.7 Cents Per Mile
Toronto YYZ – Frankfurt FRA | 60,000 Aeroplan Points + $653.56 Taxes and Fees | Cash ticket is $1,101 | CPM = 0.7
Domestic/USA First Class = 2.4 Cents Per Mile
Toronto YYZ – Los Angeles LAX | 50,000 Aeroplan Points + $165.79 Taxes and Fees | Cash ticket is $1,400 | CPM = 2.4
Domestic/USA Economy Class = 2.3 Cents Per Mile
Toronto YYZ – Los Angeles LAX | 25,000 Aeroplan Points + $165.79 Taxes and Fees | Cash ticket is $743 | CPM = 2.3
Merchandise = 0.9 Cents Per Mile
“KitchenAid 4-Slice Toaster” | 14,000 Aeroplan Points | Cash price is (with taxes) $135.60 | CPM = 0.9