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Aimia announces surprise deal: Air Canada is out, Porter is in

Aimia announces surprise deal: Air Canada is out, Porter is in

Friday, August 3, 2018

TORONTO — Aimia has struck a new deal with Porter Airlines for it to become the preferred Canadian airline to issue Aeroplan Miles after rejecting Air Canada’s takeover bid just hours before the midnight deadline Thursday.

Aimia said Air Canada and its three financial partners – Toronto-Dominion Bank, Canadian Imperial Bank of Commerce and Visa Canada – raised their initial bid for its loyalty plan from $250 to $325 million, but Aimia wants $450 million.

The break down in negotiations comes after Aimia and the Oneworld airline alliance confirmed earlier in the day that they are in talks about a potential partnership for the loyalty points program.

The Oneworld alliance, whose 13 members include British Airways, American Airlines and Cathay Pacific, is a direct competitor to the Star Alliance airline network, of which Air Canada is a member.

With Air Canada out of the running, Aimia is now making way for Porter to issue Aeroplan Miles on Porter routes, effective July 2020 when its current arrangement with Air Canada ends. Porter’s fleet of aircraft is only a fraction of the size of Air Canada’s but a possible deal with Oneworld will help strengthen its air offering.

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Porter will also become a redemption partner, as of the effective time of the agreement, offering up to 60% of seat inventory for the purchase of flights with Aeroplan Miles at fixed-rate prices. The arrangement includes an extensive cooperative marketing program targeting existing Aeroplan members, with an emphasis on members who travel on Porter routes.

“This is a unique opportunity for Porter to join a well-established travel loyalty program and, in the future, reach its vast member base to aggressively promote our airline,” said Michael Deluce, executive vice president and chief commercial officer of Porter Airlines. “Our current VIPorter members will benefit from Aeroplan’s enhanced range of loyalty services, with an ability to earn and redeem points with a growing network of airlines and other brands.”

Points from Porter’s existing VIPorter loyalty program will be converted into Aeroplan Miles when the agreement becomes effective in 2020. Porter passengers will then be able to earn and redeem Aeroplan Miles on all Porter flights, plus across the growing Aeroplan collection of more than 75 travel and retail partners. This includes international airlines covering much of the globe.

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Aimia chief executive Jeremy Rabe says that his plan is to strengthen its air offering after July 2020.

“We’ve committed to our five million members that they will be able to choose any seat on any airline, anywhere, any time with the new Aeroplan program,” Rabe said.

The privately owned airline, whose main hub is Billy Bishop Toronto City Airport (YTZ), currently serves Toronto, Ottawa, Montreal and other Canadian cities from St. John’s, NL to Thunder Bay, Ont. as well as U.S. destinations including the New York City area, Chicago, Boston and Washington, D.C.

Shortly before announcing the Porter agreement, Aimia reported that spending on Aeroplan credit cards remained strong in the second quarter and the company is “making solid progress” on streamlining its business.

Aeroplan and Air Canada have each assured their customers that the Aeroplan points will be honoured as usual until their long-term contract expires.


With file from The Canadian Press

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