TORONTO — Less than a week after Aeroplan parent company Aimia said it was eyeing charter flights to its most popular destinations, comes the announcement that a new corporation headed up by Air Canada wants to acquire Aeroplan for $2.25 billion, including $250 million in cash and $2 billion worth of Aeroplan points liability.
The buy would bring Air Canada full circle with the wildly popular loyalty program. Back in May 2017 Air Canada announced it was parting ways with Aimia and Aeroplan effective 2020, with plans to develop a new loyalty program in-house. The new loyalty program, still on track, is scheduled to launch in 2020.
Aeroplan was created by Air Canada in 1984 and spun off in 2002. With more than 5 million active members Aeroplan is the fourth most popular loyalty program in Canada, behind Air Miles, Shoppers Optimum (now PC Optimum) and Canadian Tire’s newly-renamed Triangle.
Now Air Canada, TD Bank, CIBC, and Visa Canada Corporation, on behalf of a corporation to be formed, have issued a statement announcing their proposal to Aimia to acquire its Aeroplan loyalty business – including $2 billion of Aeroplan points liability as of March 31, 2018 – for $250 million in cash, representing a total purchase price of $2.25 billion.
The acquisition, if Aimia signs on, “will ensure value and continuity for their members as well as customers of Air Canada, TD, CIBC and Visa”, according to the statement, and would allow for a smooth transition of Aeroplan members’ points to Air Canada’s new loyalty program launching in 2020.
The statement says the parties have requested “a prompt response” from Aimia regarding the proposal, which has an expiry date of Aug. 2.
On July 20 Aimia Inc. CEO Jeremy Rabe announced that Aeroplan was looking to get into the airline business by offering charter flights to its most popular destinations. “We have routes where we have enough redemption demand today that we can fly a daily charter throughout the year on some particular routes,” said Rabe, adding that Aimia was in negotiations with potential airline partners to operate narrow-body aircraft ideally suited for flights to sun destinations in the Caribbean.
“Those will be dedicated Aeroplan aircraft that are flying just for Aeroplan.”
He added: “We can optimize the itineraries, we can make sure that those planes are flying to the places where people actually want seats and again that’s a big difference than today.”
With files from The Canadian Press