Air Canada aims to debut new Amadeus PSS in 2019 ahead of 2020 loyalty programme launch 

25 February, 2018

Canada’s largest airline, Air Canada, forecasts debuting its new Amadeus passenger service system (PSS) by the end of 2019, which is one year ahead of the launch of its highly-anticipated new loyalty scheme.

The airline selected the Amadeus Altea Suite in late 2017 to replace its decades-old in-house PSS, and prior to announcing the new partnership with Amadeus, Air Canada estimated a new system would generate CAD100 million of incremental benefits for the airline.

Recently Air Canada president of passenger airlines Ben Smith remarked the airline’s in-house PSS system is 22 years old, “so the flexibility in offering more customised price points and more customised unique benefits [and] getting the right pricing for that [to] drive higher margins is enormous”.

Mr Smith also stated the Amadeus system will help Air Canada completely overhaul its departure control system at airports, “so our ability to service customers at every step of the journey will be greatly enhanced”.

Air Canada’s Amadeus PSS is set debut one year ahead of the airline’s new loyalty programme, and the company believes the new rewards scheme should produce USD2 billion to USD2.5 billion in value over a 15-year period. The airline spun off its loyalty scheme Aeroplan in the early 2000s to raise cash as it worked through a bankruptcy restructuring that began in 2003.

In Sep-2017 Air Canada initiated an RFP for a co-branded credit card partnership for the yet-to-be named new loyalty scheme, and recently launched the procurement process for the loyalty technology platform partner, and aims to render decisions for both those items by YE2018.

Air Canada has estimated the upfront costs for the new loyalty programme would reach CAD85 million between 2017 and 2022. For 2018, the airline expects to incur operating costs of CAD10 million. It estimates that CAD85 million should be split roughly equal between operating and capital costs.

The airline is forecasting total capital expenditures in 2018 of roughly CAD2.3 billion, with aircraft outlays representing CAD1.9 billion that amount followed by information technology investment of CAD125 million.

TABLE - Air Canada's annual capital expenditure is expected to fall over the remainder of this decadeSource: Air Canada