Toronto, ON – Air Canada has made an offer to buy back its former loyalty program which it created in 1984.
Air Canada is partnering with Toronto-Dominion Bank, CIBC and Visa to buy Aeroplan from its current owner Aimia, in exchange for taking over the liability of $2 billion worth of outstanding Aeroplan points, plus an additional $250 million in cash.
Air Canada started Aeroplan as its loyalty program in 1984, however it was the first of many assets the airline jettisoned when it restructured in 2005. Aimia is valued in the neighbourhood of $472 million, about a third of what the company was worth last summer when Air Canada announced it would soon leave its partnership with Aeroplan after 30 years. That announcement sent the loyalty program’s shares into a tumble it hasn’t recovered from.
Air Canada recently announced its plans to start its own loyalty program and market observers suggest the Wednesday announcement to purchase Aeroplan is part of a larger plan. It is thought that if the new offer is accepted, the new owners would convert all five million Aeroplan members and points to the new Air Canada program.
Aimia doesn’t have that long to accept the offer. Air Canada and its financial partners have placed a time limit on the response by August 2nd.