Published on August 21st, 2018 | by William Charles12
Air Canada Announces Acquisition Of Aeroplan For $450 Million In Cash + Point Liability
In case you didn’t already know Air Canada spun off Aeroplan (the current Air Canada loyalty program) in 2002 as a separate entity, Aeroplan was eventually sold to Aimia who are the current owners. Aimia has an exclusive contract with Air Canada until June 29th, 2020. Recently Air Canada made a bid for Aeroplan for $2.25 billion ($250 million in cash and a $2 billion Aeroplan points liability), this was rejected and Aimia/Aeroplan indicated they would partner with Porter instead.
In the latest update Air Canada along with TD, CIBC & Visa have reached an in principal agreement to purchase Aeroplan. The purchase price consists of $450 million in cash and approximately $1.9 billion in Aeroplan miles liability. Aimia/Aeroplan had originally asked for $450 million, so it looks like they were able to make the threat of a competing program real enough to get Air Canada to pay up. Hopefully this serves as a lesson to both airlines and potential purchasers that selling of the loyalty program is not a good long term play.