The Great Reboot

Canada seeks to attract U.S. frequent flyers with perks on Air Canada

3 minute read

Air Canada planes are parked at Toronto Pearson Airport in Mississauga, Ontario, Canada April 28, 2021. REUTERS/Carlos Osorio/File Photo

MONTREAL, Sept 27 (Reuters) - Canada is trying to use the lure of travel perks to convince America's frequent-flying elite to fly north on Air Canada (AC.TO), as the country steps up efforts to revive crucial traffic from the United States, a Canadian official said.

COVID-19 has battered travel from Canada's largest tourism market. During the first half of 2021, Canada had only about 178,000 overnight arrivals from the United States, compared with 6.8 million during the same period in 2019, according to government data.

To help reverse that decline, government tourism body Destination Canada on Monday rolled out its first campaign targeting U.S. frequent flyers, in partnership with the country's largest carrier.

It is part of broader, C$14 million ($11.2 million) efforts by the tourism commission to boost traffic after Canada recently opened its borders to vaccinated travellers. It is not clear how much the specific frequent flyer campaign will cost.

"This is super-focused in terms of our ability to reach frequent flyers," Gloria Loree, Destination Canada's chief marketing officer told Reuters, ahead of the launch.

Under the plan, up to 20,000 U.S. frequent flyers with carriers like American Airlines (AAL.O), Southwest Airlines Co (LUV.N) and Delta Air Lines (DAL.N) could get matching status when flying Air Canada north of the border.

Delta declined to comment and American Airlines did not immediately respond.

Southwest, which does not serve Canada directly, said by email that the government arm's support contributes to the industry's collective efforts "to restart substantive air travel."

Frequent-flyer status gives travelers perks like priority boarding that would normally cost a premium fare or a fee.

While status-matching is common among airlines, Destination Canada said this is the first time a tourism organization has used the practice to attract tourists to their country.

"This is the push to get them coming to Canada," Loree said.

Eligible U.S. frequent flyers who book and travel north on AC before Jan. 15, 2022, will keep their status with the carrier for all of 2022, she said.

It comes as countries ease restrictions on international travel, with the United States set to reopen in November to vaccinated air travelers from 33 countries. read more

Loree said funding frequent-flyer status matching is no different from other incentives paid for by Destination Canada, such as a separate campaign this year with Air Canada's rival, WestJet Airlines.

Loree said the goal is to restore routes from the United States, while trying to attract travelers who will return to Canada.

In April, hard-hit Air Canada received an estimated C$5.9 billion ($4.7 billion) government aid package with the country gaining a stake of roughly 6% in the carrier. read more

While Canada's high vaccination rate could reassure tourists, the cost of the country's COVID-19 PCR test requirements for arrivals could dissuade some travelers, said Frederic Dimanche, director of the Ted Rogers School of Hospitality and Tourism Management at Ryerson University.

Loree said targeting U.S. frequent flyers is a plus because they are largely accustomed to those requirements.

"They've figured out how to travel," Loree said. "So we want them to consider Canada as their next trip."

Air Canada shares closed up 3.48% in Toronto trade.

($1 = 1.2652 Canadian dollars)

Reporting by Allison Lampert in Montreal. Additional reporting by Rajesh Kumar Singh in Chicago Editing by Denny Thomas, Lisa Shumaker and Matthew Lewis

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