In a move that few saw coming, Air Canada is teaming up with three financial service giants to attempt to buy back the loyalty program that it created, Aeroplan.
The announcement of the attempted acquisition comes on the heels of Aeroplan announcing a number of program changes post June 2020, when Air Canada and it were supposed to split up.
How does this affect current Aeroplan credit cardholders? Read on to find out.
Details on the Proposed $2.25 Billion Acquisition
Air Canada along with TD Bank, CIBC and Visa are proposing to acquire the Aeroplan loyalty program from parent company Aimia in a deal worth $2.25 billion.
Air Canada announced last year that it would be ending its 30-year business relationship with Aeroplan. Aimia’s stock has been on a downward spiral since then. The above-mentioned announced program changes helped boost its stock price, but it’s nowhere near where it was it before Air Canada said it was leaving for greener pastures.
Here’s a quick history lesson. You may not be aware, but Air Canada actually started Aeroplan as its loyalty program in 1984. It later sold off the loyalty program in an initial public offering in 2005, when parent company Aimia was created. It seems things may be coming full circle if Air Canada and its financial partners are successful in acquiring Aeroplan.
One can only speculate on why Air Canada decided to part ways with Aeroplan, but rumour has it that it wanted to stay nimble in the increasingly competitive reward program space. It was also supposedly concerned about Aeroplan’s cash flow and its ability to work with other credit card providers.
It shouldn’t come as any surprise Air Canada is showing interest in Aeroplan. Aeroplan is considered the premier loyalty program in Canada. With the tough time Aeroplan is having, Air Canada might just be the white knight it needs.
It seems acquiring Aeroplan may be part of Air Canada’s master plan, as Air Canada already announced its intentions of creating its own travel rewards program from scratch. If the deal is successful, the five million Aeroplan members would be moved to the new Air Canada program.
What Does the Proposed Acquisition Mean for Aeroplan Cardholders?
Although news of the proposed acquisition was generally well received, if you’re a cardholder of Aeroplan, you may be wondering how the acquisition would affect you and rightfully so. If you’re stockpiling points, you want to make sure those points can be redeemed towards something of value after June 2020.
If the transaction goes ahead, Air Canada has promised a smooth transition from Aeroplan to the new Air Canada loyalty program. Air Canada has promised to safeguard members’ points and provide good value for the five million Aeroplan members.
There’s no need to panic. Your Aeroplan points will remain intact. However, what will change is how you earn points after June 2020 and how can you redeem those points. We won’t know those details until if and when the deals goes through.
The Bottom Line
Aeroplan has until August 2nd to accept the deal. It remains to be seen if it will. That being said, if you’re saving points for a dream vacation, now may be the time to redeem them. If the acquisition goes through, you may get better value for your points, but there’s no guarantee.
