Esso shift to PC Optimum won’t shake confidence in Aeroplan, Aimia says
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 of corporate reputation and public affairs, wrote in an email.
Loblaw Companies 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 its partnership with Air Canada ends. That includes moving to a model less reliant on exclusive contracts and more traveland 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.
She added that members continue to be active as miles earned rose two per cent last year and redemptions ticked only a bit higher.
Aimia said up to 1.5 miles for each dollar spent will still be earned using Aeroplan-affiliated credit cards at any retailer, including Esso.
Drew McReynolds of RBC Dominion Securities said that 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 the departure of Air Canada. “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 Analyst 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. “It’s that they’ve got a better competitive program that they want to work with ...”
Aligning with Loblaw could deliver a broader demographic than the higher-end consumers targeted by Aeroplan, he said.
Linsdell said the announcement of Aimia’s new strategy for Aeroplan, including improving its car rental and hotel offering, will reassure members and investors.
Loblaw Companies Ltd. and Imperial Oil Ltd. have signed a deal that will allow PC Optimum members to earn points at more than 1,800 Esso gas stations starting June 1.