The shareholders of Aimia voted Tuesday for the sale of its Aeroplan loyalty program to a consortium led by Air Canada, a operation of $ 450 million, which raises certain questions about the future of Aimia.
The agreement will give Air Canada a better access to customer data and will likely increase margins in the short term, suggested analysts. Aimia, a company analysis of consumer behaviour, will have to more than a billion dollars in cash, argued Mittleman Brothers, the major shareholder of the company.
“We need to consider all possibilities,” said Tuesday the president of Aimia, Robert Brown.
It has minimized the possibility of paying its shareholders and proceed with a dissolution of the corporation listed on the Toronto stock Exchange in the near future.
“People should not see things this way. This is really important, is that we are entering a period of reflection.”
Aeroplan will now “fight” with the loyalty program PC Optimum, Loblaw Companies, whose 16 million members to earn points through purchases made in grocery stores Loblaw (Provigo), Shoppers Drug Mart (Pharmaprix) and Esso, has noted the expert in consumption, Tony Chapman.
“Shoppers and PC will give value for their money. […] Their gratification is much more immediate,” said Mr. Chapman.
“According to me, Aeroplan is more of the fantasy : “gosh, I hope I have enough points to go to Hawaii.” They play, therefore, on territories, which are very different,” he added.
Air Canada has indicated that Aeroplan members would have their points transferred to a new loyalty program with the airline when its partnership with Aimia expires in 2020.
Conclusion in the next few days
Under the agreement, Air Canada redeem Aeroplan for cash and to assume $ 1.9 billion of liabilities to holders of points, partially guaranteed by two banks offering credit cards Aeroplan.
The TD Bank and CIBC will pay Air Canada approximately $ 1.2 billion in total, in addition to the payment of an undisclosed amount of Visa Canada. The banks and Visa have agreed to remain a partner of the program until at least 2030.
The shareholders of Aimia have formalized their approval in a vote in Montreal on Tuesday morning, following regulatory approvals from Ottawa in November. The agreement, signed in August, is expected to be finalized “in the next few days”.
The last two years have been eventful for the company based in Montreal. Rupert Duchesne, the former chief executive of Aimia, has left his post in January 2017 and has been replaced by Jeremy Rabe in may 2018. The former president and director of strategy, Nathaniel Felsher, came out in November, less than three months after its entry into function.
The other assets of Aimia include a participation of 48 % in the frequent flyer program of Aeromexico, PLM, and a share of 20% in the loyalty programme of AirAsia, Think Big.
Analyst Chris Murray of Altacorp Capital, spoke of the loyalty program of the carrier australian Qantas Airways, which has more than double the five million members of Aeroplan, as a model for Air Canada and its partners.
“I think that Air Canada would have to really interest to try to improve the program”, he estimated.
“They don’t just compete with WestJet, they compete with British Airways and Air France KLM as well as Delta and United and American Airlines, as well as other air carriers for passengers of great value who wish to travel abroad.”