Esso exit ‘not ... a big deal,’ Aimia says

National Post (Latest Edition) - - FINANCIAL POST - Ro ss Ma row­its

MON­TREAL• The op­er­a­tor of Aero­plan is push­ing back at sug­ges­tions that Esso’s shift to the PC Op­ti­mum card could shake mem­ber con­fi­dence with the planned de­par­ture of Air Canada as a part­ner loom­ing in 2020.

“We un­der­stand the sen­ti­ment, but our mem­bers have stuck by us over the last year against oth­ers’ pre­dic­tions,” Ch­eryl Kim, Aimia Inc.’ s vice- pres­i­dent cor­po­rate rep­u­ta­tion and pub­lic af­fairs, wrote in an email. Loblaw Cos. Ltd. and Im­pe­rial Oil Ltd. an­nounced Tues­day they have signed a deal that will al­low PC Op­ti­mum mem­bers to earn points at more than 1,800 Esso gas sta­tions ef­fec­tive June 1.

Aimia said it is work­ing on a pro­mo­tion to earn more miles with ex­ist­ing part­ners and de­vel­op­ing a strat­egy for how the pro­gram will change once the long- term part­ner­ship with Air Canada ends. That in­cludes mov­ing to a model that is less re­liant on ex­clu­sive con­tracts and more travel- and ex­pe­ri­ence- cen­tric.

Kim said Esso is not a ma­te­rial con­trib­u­tor to Aimia’s fi­nan­cial re­sults and won’t af­fect the com­pany’s fi­nan­cial guid­ance or strat­egy.

“The num­ber of miles you earn on any par­tic­u­lar trans­ac­tion is pretty low so it’s re­ally not fi­nan­cially a big deal,” she said in an in­ter­view. She added that mem­bers con­tinue to be ac­tive as miles earned in­creased two per cent last year and re­demp­tions ticked only a bit higher.

Drew McReynolds of RBC Do­min­ion Se­cu­ri­ties said while Esso ac­counts for an undis­closed frac­tion of the 10- to 12- per- cent gross billings from non- fi­nan­cial and non- Air Canada part­ners, the min­i­mal fi­nan­cial im­pact doesn’t con­vey the over­all ef­fect on Aero­plan as it pre­pares for Air Canada’s exit.

“The op­tics of any ac­cu­mu­la­tion part­ner de­fec­tions be­tween now and 2020 are neg­a­tive in our view, mak­ing new Aero­plan part­ner an­nounce­ments be­tween now and 2020 that much more crit­i­cal to stem changes in mem­ber be­hav­iour,” he wrote in a re­port.

How­ever, Aero­plan has lost and gained part­ners be­fore, said Neil Lins­dell of In­dus­trial Al­liance Se­cu­ri­ties, who doubts Esso’s move will have an im­pact on what other part­ners might do.

“It’s not like some­body’s just dumped Aero­plan be­cause they don’t want to be as­so­ci­ated with it,” he said in an in­ter­view. “It’s that they’ve got a bet­ter com­pet­i­tive pro­gram that they want to work with and so they’re just mov­ing their fo­cus.”

Lins­dell said peo­ple shouldn’t ex­pect any de­tails about new air­line part­ners un­til mid-2019, at the ear­li­est.

He said Aimia’s board and man­age­ment could be on the hot seat April 27 from share­hold­ers up­set that Aimia’s share price has plum­meted to $ 1.53 from $ 8.93 in May 2017.

Newspapers in English

Newspapers from Canada

© PressReader. All rights reserved.