Aimia shareholders approve sale of Aeroplan to Air Canada consortium

A model airplane is seen in front of the newly revealed Air Canada Boeing 787-8 Dreamliner aircraft at a hangar at the Toronto Pearson International Airport in Mississauga, Ont., Thursday, February 9, 2017. (THE CANADIAN PRESS/Mark Blinch)

MONTREAL -- Aimia Inc. shareholders voted Tuesday to approve the $450-million sale of its Aeroplan loyalty program to Air Canada, cementing the takeover but leaving questions about Aimia's future.

The deal will give Air Canada better access to customer data and likely boost margins in the near term, analysts say. Aimia, a loyalty analytics company, will come away with more than $1 billion in cash, according to Mittleman Brothers, the company's largest stakeholder.

"We have to consider all the possibilities," Aimia chairman Robert Brown said Tuesday.

He downplayed the possibility of paying out shareholders and folding as a publicly traded company any time soon.

"People shouldn't be thinking that way. What's really important is that we go through a period of reflection."

Aeroplan will now "battle it out" with the 11-month-old PC Optimum loyalty program run by Loblaw Companies Ltd., whose 16 million members earn points via purchases at Loblaw grocery stores, Shoppers Drug Mart and Esso among other locations, said consumer affairs expert Tony Chapman.

"Shoppers and PC are going to give them a great run for their money...Theirs is much more immediate gratification," Chapman said.

"Aeroplan is what I consider to be more fantasy -- 'Boy, I hope get enough points to go to Hawaii.' So they are playing in very different territories," he added.

Air Canada has said Aeroplan members will see their points transferred to a new loyalty program with the airline when its partnership with Aimia expires in 2020.

The deal will see Air Canada buy Aeroplan for cash and assume $1.9 billion in liabilities to points holders, partially backed by two banks that offer Aeroplan credit cards.

Toronto-Dominion Bank and Canadian Imperial Bank of Commerce will pay Air Canada about $1.2 billion in total, on top of an undisclosed payment from Visa Canada Corp. The banks and Visa have agreed to stay with the loyalty program until at least 2030.

Aimia shareholders formalized their approval in a near-unanimous vote Tuesday, following regulatory clearances from Ottawa in November. The company said it expects the deal -- reached in August -- to close "in the coming days."

The past two years have been turbulent for the Montreal-based company. Rupert Duchesne, Aimia's previous CEO, stepped away from the job in January 2017, replaced by Jeremy Rabe in May 2018. Former president and chief strategy officer Nathaniel Felsher left in November less than three months after he took the job.

Aimia's other assets include a 48 per cent stake in Aeromexico's loyalty program, PLM, and a 20 per cent share of AirAsia's loyalty program, Think Big.

Analyst Chris Murray of Altacorp Capital pointed to the loyalty program of Australia's Qantas Airways, which boasts more than double Aeroplan's five million members, as a model for Air Canada and its partners.

"I think that there is a real incentive on Air Canada's part to try to improve the program," he said.

"They're not only competing with WestJet; they're competing with British Airways and Air France KLM and Delta and United and American Airlines and other global carriers for those high-value passengers that want to travel internationally."