Aimia completes sale of Aeroplan loyalty program

Air Canada has completed its purchase of the Aeroplan loyalty program from Aimia Inc., assuring customers their miles will be honoured on a “one-to-one basis” when the airline’s new rewards program launches in 2020.

“Air Canada is creating an industry-leading loyalty program that aims to provide unmatched flexibility, choice and convenience for customers when it debuts in 2020,” chief executive Calin Rovinescu said in a statement Thursday.

The deal marks a reunion for Aeroplan and Air Canada, which spun off the points program in 2005 under a restructuring.

It will also mean better access to customer data for Air Canada — Aeroplan has about five million members — and positions the Montrealbased airline to compete against the PC Optimum loyalty program run by Loblaw Companies Ltd., which boasts about 16 million members.

Aimia used the majority of its gross proceeds from the sale, which totalled roughly $497 million after adjustments related to working capital, to repay debt.

At closing, Aimia used about $308 million to repay and terminate its credit facility and redeem all of its outstanding senior secured notes. A further $100 million has been deposited into a restricted, interest-bearing account jointly controlled by Aimia and Air Canada under the terms of the deal.

Aimia said about half of its 1,500 employees will move to Air Canada as a result of the transaction.

“Aimia is in the enviable position of having unrestricted cash of over half a billion dollars alongside its meaningful operating business and investments after accounting for the impact of the sale and the repayment of all of our financial indebtedness,” said Aimia chairman Robert Brown in a release.