Air Canada Seeks E-Tailers For Virtual Mall Takeoff

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Aeroplan, the frequent-flier reward division of Air Canada, is shopping for high-end retailers to help jump-start its online virtual mall in early 2002.

Air Canada will develop a separate virtual mall Web site in which its frequent-flier customers can earn travel miles for each dollar spent at participating retailers. While shopping categories have not been finalized, the company said it will partner with retailers ranging from travel-related service providers, such as hotels and car rental agencies, to computer and electronics companies. Air Canada also wants to link with online mortgage and banking institutions to cater to its higher-end frequent-flier customer base.

"We will associate with higher-end, brand-name companies that target consumers with higher spending levels," said Marc Trudeau, vice president of marketing and corporate development at Air Canada, Montreal. "We have already been approached by a lot of potential partners in various online and offline retail sectors because of the significant challenge in getting transactions to their Web sites."

He said it is too early in the process to disclose any of the merchants, but noted that some of the company's current retail partners -- including gift company and Future Shop, a Canadian computer and electronics company -- will be considered as featured e-tailers.

"Our partnership with Aeroplan is bringing us incremental growth," said Lori Decou, manager of corporate communications at Future Shop, Burnaby, British Columbia. "As a major retail partner of the company, we are looking very seriously at a part in the virtual mall program."

She said Aeroplan members make roughly 40 percent of Future Shop's online purchases and 10 percent to 20 percent of in-store purchases.

Air Canada's frequent-flier customers buy 80 percent of their tickets online, Trudeau said.

"They have a very high propensity to use the Internet and are not afraid of a paperless purchasing environment," he said.

The company decided to launch a virtual shopping program based on the success of recent online partnerships with merchants such as Future Shop.

Air Canada's frequent-flier demographic is 80 percent male, ages 35 to 55 and earns twice the annual household income of the general population, or roughly $130,000 in Canadian currency, Trudeau said.

"The frequent fliers' purchasing power is beyond their household income because of business expenses," he said. "They also tend to have expensive hobbies, such as skiing and golfing."

The airline plans to market the virtual mall through e-mail newsletters, direct mail statement inserts and online advertising on partner sites. Aeroplan has roughly 5.5 million frequent-flier members, of which 1 million active members receive direct mail statements each month. The company issues a bimonthly e-mail newsletter listing coming promotions. The Air Canada Web site,, has about 1 million registrants. Trudeau said that Air Canada's customer lists are not for sale.

Aeroplan offers its customers miles rewards programs through its affiliate credit cards, CIBC AeroGold co-branded credit cards and the Diners Club International cards.

The virtual mall launch is coming as part of an anticipated late summer spinoff of Aeroplan into a wholly owned subsidiary.

"As a division, Aeroplan functions as one of Air Canada's many marketing and system development priorities," Trudeau said. "The spinoff will allow for reinvestment in Aeroplan's business."

Aeroplan plans to add 200 people to its staff of 1,300 to facilitate the spinoff, he said.


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