Sinorama Holidays has closed its doors after 13 years in business, with a voluntary termination of its Ontario Travel Industry Act, 2002 registration.
TORONTO — Aimia has signed new Aeroplan partnership agreements with two more Canadian airlines – Air Transat and Flair Airlines – while at the same time leaving the door open for an Air Canada deal.
The partnerships, effective July 2020, will allow customers to earn and redeem Aeroplan Miles on all Air Transat and Flair Airlines flights, as well as on Air Transat’s vacation packages.
Air Transat offers some 60 destinations in the Americas, Europe and the Middle East. Flair, which launched no-frills scheduled services to several cities last year from a hub at Edmonton International Airport, also just announced that it is pulling out of Hamilton on Oct. 27 for Toronto’s Pearson International Airport, with plans to launch its first flights to the U.S.
The news comes on the heels of another deal announced last Friday that would make Toronto-based Porter a preferred Canadian airline for Aeroplan, also effective July 2020 when the current arrangement with Air Canada ends.
Despite rejecting Air Canada’s takeover bid just hours before Thursday’s deadline, Aimia says it remains open to negotiating a fair deal for the purchase of its Aeroplan loyalty program.
“We never stop negotiating. Should the consortium want to engage with us in a constructive dialogue, we would be happy to entertain that,” Rabe said Friday during a conference call. “At the same time, we feel very confident about our future plans. So either or, we’re happy to go down either path.”
Rabe insisted that Aimia didn’t reject the Air Canada group’s offer, but said it was very conditional and didn’t fairly value the business.
The consortium – which includes Toronto-Dominion Bank, Canadian Imperial Bank of Commerce and Visa Canada – initially offered $250 million cash and the absorption of $2 billion of mileage liability, but subsequently raised the offer to $325 million, still short of the $450 million Aimia believes would be a fair price.
“We have a number of shareholders that are frankly pretty upset that we offered a number that low,” Rabe said.
One of those shareholders – Cetus Capital – said it is frustrated by the consortium’s lower offer.
“We’re scratching our heads as to why the offer is so low in light of the significant and substantial strategic and financial benefits to Air Canada and the consortium partners,” Bart Stout said during the call, outlining a series of strategic benefits to the airline and its credit card partners.
They include the significant cash Aeroplan generates for Air Canada, the valuation discount relative to other airlines that would decrease by having its own in-house loyalty program and a lower risk for the credit card partners who may not be chosen as a partner for Air Canada in a stand-alone plan.
“We continue to believe that Air Canada is acting very penny-wise pound-foolish as it relates to their tactics here. They should be more than willing, more than excited to acquire Aeroplan. Frankly, we believe the value that they should be acquiring Aeroplan for should be significantly more than $450 million.”
Rabe said Stout was “spot on” with his assessment.
“We felt like $450 million was a very, very reasonable number. And if there was a real willingness to engage from the consortium, that would have been accepted and then it just kind of leaves you wondering if there was really a real willingness or not.”
The future of Aeroplan, which has more than five million members, has been in doubt since Air Canada announced in May 2017 that it planned to launch its own loyalty rewards plan in 2020.
Aimia announced Thursday it is also in partnership talks with the Oneworld airline alliance, a major competitor to the Star alliance, of which Air Canada is a member. On Friday, news of the Porter deal broke. Under terms of the deal, Porter’s existing VIPorter loyalty points will be converted into Aeroplan miles.
WestJet Airlines said it has no interest in joining Aeroplan after 2020.