Aimia is still in talks with Air Canada after Porter partnership

TORONTO Aimia Inc.’s chief executive said the company will continue to negotiate with Air Canada over the future of its Aeroplan loyalty program, hours after announcing it had secured a deal with Porter Airlines to make it its new preferred partner.

Aimia chief executive Jeremy Rabe told analysts on a conference call Friday that the company would be “happy to entertain” further discussions with Air Canada and its three partners, which made a bid to purchase its loyalty program last week. “We never stopped negotiating,” Rabe said. “At the same time, we feel very confident about our future plans.”

Under Rabe, who was appointed CEO in May, Montrealbased Aimia has been bolstering attempts to prove its value as a stand-alone company after Air Canada announced plans last year to sever ties with the loyalty program to start its own.

Aimia announced Friday it had struck a deal with Porter that would see it become a preferred airline and redemption partner for its Aeroplan program beginning in July 2020, when Aimia’s partnership with Air Canada expires.

Rabe said that Aimia had been in discussions with Porter for “some time,” but that Air Canada’s bid to purchase the Aeroplan program “accelerated the speed of those discussions and made things come to a crystallized fashion more quickly.”

Air Canada surprised the market last week when it partnered with Canadian Imperial Bank of Commerce, Toronto-Dominion Bank and Visa Canada Corp. to make a bid for Aimia’s Aeroplan program — the same one it spun off more than a decade ago.

The initial offer was for $250 million in cash, plus the assumption of $2 billion in Aeroplan points liability. The bid was recently bumped up to $325 million, but Aimia said it still fell short of what it believes to be the fair value of the program. Aimia is asking for $450 million, which is substantially less than the $1 billion its largest shareholder, Mittleman Brothers had suggested.

“We think that $450 million was a very fair offer. We have a number of shareholders that are frankly pretty upset that we offered a number that low,” Rabe said.

A representative of one of those upset shareholders — Cetus Capital — voiced concerns about Aimia’s offer on the conference call Friday.

“We’re scratching our heads as to why the offer is so low, in light of the significant and substantial strategic and financial benefits to Air Canada and the consortium partners,” Bart Stout said.

Aimia also said Friday that it is having ongoing discussions about a potential partnership with Oneworld Alliance, which includes American Airlines, British Airways, Cathay Pacific, Qatar Airways and Qantas, among several others.