Air Canada Closes Acquisition of Aeroplan, Credit Cards Finalized with TD, CIBC, Visa Canada
Air Canada announced today it has closed on its acquisition of Aeroplan and its operator Aimia Canada. The announcement means Air Canada’s new loyalty program set to debut in 2020 will see Aeroplan miles honoured at a one-to-one basis.
“Air Canada is creating an industry-leading loyalty program that aims to provide unmatched flexibility, choice and convenience for customers when it debuts in 2020. With today’s purchase of Aeroplan, we are taking a major step forward on this transformational initiative by acquiring one of Canada’s most popular loyalty programs. For many Canadians, given Aeroplan’s privileged access to Air Canada, it is the next best currency to the Canadian dollar,” said Calin Rovinescu, President and Chief Executive Officer of Air Canada, in a press release.
Air Canada says it has already finalized credit card agreements with TD, CIBC and Visa Canada to participate in the new loyalty program, while an agreement in principle has been reached with American Express Canada.
The acquisition cost Air Canada $450 million in cash, along with $47 million in cash for pre-closing adjustments. TD and CIBC paid Air Canada an aggregate amount of $822 million. Visa also made an undisclosed payment and once AMEX comes on board, they will as well. TD and CIBC also made $400 in pre-payments to Aeroplan, “to be applied towards future monthly payments in respect of Aeroplan Miles.”
Aeroplan has nearly 5 million members and looks to compete with Loblaw’s 16 million members as part of the latter’s PC Optimum loyalty program, which is reaching its one-year anniversary soon.