Air Canada is going to launch a Loyalty Program with New Improvements

Air Canada is going to launch a Loyalty Program with New Improvements

Air Canada will apparently be cutting ties with Aimia Inc. in 2020 and will be preparing their own loyalty and rewards plan. Aimia Inc, is the current operator for the Aeroplan loyalty program, and it has lost 65% of its shares after the announcement made by Air Canada.

Aimia now at risk from other members of Aeroplan should they consider putting an end to the membership. This is because Air Canada was vital to the Aeroplan service, and it represented 10% of the revenues that Aimia was making.

As far as shares are concerned, they have dropped 57%, at 10:15 having a value of $3.88 in Toronto. Later, they have fallen to $3.13 which has marked the largest decline in a single day since trading started in 2005.  Shares have been closed at 62.71%, at a value of $3.33. However, Air Canada has had its shares increase by 6.4%, at a value of $15.84.

The current contract between Aimia and Air Canada is valid until the 29th of June, 2020, and members of Aeroplan can redeem and earn miles within the program.

Reports from RBC Capital Markets suggests that this will greatly influence the revenues generated by Aeroplan. Air Canada’s departure will lower the earnings generated by Aimia after 2020 will be $75 million less than usual. This is estimated before tax, interest, amortization and depreciation. This does not mean that Aeroplan will be dismantled. It still has contracts with the Canadian Imperial Bank of Commerce and Tornoto-Dominion Bank that are valid until 2024.

Air Canada’s Chief Executive Officer has announced in a statement that this decision is one that is beneficial for their customers, employees and the shareholders. Air Canada believes that the current value of their repatriation program is going to be larger than $2 billion over approximately 15 years.

Asheley Rice

I am a pop culture and social media expert. Aside from writing about the latest news health, I also enjoy pop culture and Yoga. I have BA in American Cultural Studies and currently enrolled in a Mass-Media MA program. I like to spend my spring breaks volunteering overseas.

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