SEARCH FOR RES­CUE

Aimia, owner of Aero­plan, urges pa­tience as it looks for a part­ner after Air Canada takes off,

Toronto Star - - BUSINESS - ROSS MAROWITS

MON­TREAL— The op­er­a­tor of the Aero­plan loy­alty pro­gram is urg­ing mem­bers to be pa­tient as it seeks a new air­line part­ner while work­ing to broaden the card’s travel of­fer­ings after its re­la­tion­ship with Air Canada changes in mid-2020.

“We need to be re­al­is­tic around the speed that we can move with po­ten­tial part­ners in the con­text where our cur­rent agree­ment is still in place for the next two and a half years,” Aimia Inc. CEO David John­ston said on a con­fer­ence call to dis­cuss its third-quar­ter re­sults.

He said Thurs­day the com­pany is work­ing with “a high de­gree of ur­gency,” but won’t be rushed to align its air­line part­ner­ship an­nounce­ment with Air Canada’s re­lease of de­tails about its pro­gram launch.

Air Canada served no­tice in May that it does not plan to re­new its 30-plus year part­ner­ship with Aero­plan par­ent Aimia when the cur­rent con­tract ends.

The air­line has in­vited key fi­nan­cial in­sti­tu­tions to par­tic­i­pate in bids to join its own loy­alty pro­gram and ex­pects to is­sue a re­quest for pro­pos­als early next year.

“I’m not link­ing my tim­ing with Air Canada’s tim­ing,” John­ston said in an in­ter­view. “I’m fo­cus­ing on the pri­or­i­ties in my busi­ness.”

Those in­clude get­ting new air­line part­ner­ships, re­mov­ing costs from the busi­ness and im­prov­ing its cash po­si­tion. Aimia has been work­ing to broaden Aero­plan beyond just be­ing a flight provider by adding car-rental part­ners, ho­tels and din­ing. It signed up Avis Car Rental and launched a pro­mo­tion with Mar­riott ho­tels.

“Be­cause we’ve got very rich trans­ac­tion data from our mem­bers, we think there’s more we can do in per­son­al­iza­tion than maybe other peo­ple are able to do,” John­ston said.

While Aero­plan took an ini­tial “un­der­stand­able hit” after Air Canada’s May an­nounce­ment, re­demp­tion lev­els are now run­ning at pretty nor­mal lev­els, he said.

“I’m not go­ing to say it’s not a chal­lenge, but what I like is the solid per­for­mance in the quar­ter, I like to see how mem­bers are con­tin­u­ing to en­gage in the pro­gram.”

A weaker per­for­mance in its in­ter­na­tional op­er­a­tions in­creased Aimia’s net loss for the pe­riod ended Sept. 30 to $40.3 mil­lion, or 26 cents per share, com­pared with a loss of $1.5 mil­lion, or four cents per share, a year ago.

The re­sults also in­cluded a loss of $19.9 mil­lion on the dis­posal of the Cana­dian Air Miles trade­marks, sold in Canada to Di­ver­si­fied Roy­alty Corp. in Au­gust. They also in­clude a re­lated tax ex­pense of $1.2 mil­lion.

Ad­justed for one-time items, it earned $17.4 mil­lion, or 11 cents per share, down from $48 mil­lion, or 29 cents per share, in the prior year. Rev­enue fell 10 per cent to $452.1 mil­lion while gross billings were down 11 per cent to $497 mil­lion.

FRANK RUMPENHORST/THE CANA­DIAN PRESS FILE PHOTO

Air Canada served no­tice in May that it does not plan to re­new its part­ner­ship with Aero­plan par­ent Aimia.

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