Air Canada’s gain is Aimia’s loss as the airline plans a new loyalty program

Aimia Inc., operator of loyalty program Aeroplan, plunged as much as 65% after Air Canada said it will cut ties with the company in 2020 and launch its own rewards plan. Aimia faces the risk that other Aeroplan members may decide to terminate their membership because Air Canada is the “backbone,” said Martin Landry, an analyst with GMP Securities. The country’s largest airline amounts to about 10% of Aimia’s revenue, but more than 75% of Aeroplan miles are redeemed with the carrier. Air Canada’s contract with Aimia runs through June 29, 2020. Until then, Aeroplan members will be able to earn and redeem miles under the program. The departure of Air Canada will have a dramatic effect on Aeroplan’s revenue, according to Drew McReynolds, an analyst with RBC Capital Markets. Air Canada expects the net present value of the program repatriation to exceed C$2b over 15 years, with more financial details to be provided Sept. 19. <br/>