Aeroplan strikes deal with Porter Airlines in the wake of Air Canada’s failed takeover bid

Ratehub.ca
by Ratehub.ca August 3, 2018 / No Comments

Update: On August 7, Aimia Inc. announced a preferred partnership arrangement with Air Transat. This means that, effective July 2020, Aeroplan members will be able to earn and redeem Aeroplan Miles on all Air Transat flights and vacation packages. Aimia has also added Flair Airlines to its list of new Aeroplan partners. These partnerships are in addition to the earlier announced partnership with Porter Airlines.

Air Canada’s joint bid with TD Bank, CIBC and Visa Canada to acquire Aeroplan has failed to take off. After negotiations that lasted through Thursday night, Air Canada’s original $250 million cash offer (which was later upped to $325 million) was turned down by Aimia, the company that owns Aeroplan.

In the wake of Air Canada’s failed takeover bid, Aimia announced it has signed a new deal with Toronto-based Porter Airlines, making them a preferred Canadian airline for the rewards program. Aimia has since stated it’s still open to negotiate with Air Canada for a higher offer.

Porter Airlines services a total of 23 destinations across the United States and Canada, a small fraction of Air Canada’s world-wide reach. However, Aeroplan is in talks with OneWorld Alliance, whose members include British Airways and American Airlines, to potentially bridge the gap for Aeroplan members looking to fly beyond North America.

Aimia’s recently-formalized partnership with Kaligo Solutions will also allow Aeroplan members to convert their points into other loyalty programs, but the details about how members can transfer miles are still up in the air.

The announcement of Porter’s partnership adds some element of stability for those who felt questions remained about Aeroplan’s ability to reinvent itself without Air Canada.

The continued existence of Aeroplan as a separate entity from Air Canada also offers the potential of greater flexibility for points holders. “We’ve committed to our five million members that they will be able to choose any seat on any airline, anywhere, any time with the new Aeroplan program,” said Jeremy Rabe, CEO of Aimia, in an official statement.

In addition, recent changes to the Marriott/SPG reward program, as well as the forthcoming launch of Ampli (a partnership between WestJet and RBC) point towards a future of increased reward program choices for Canadians.

“Changes in the Canadian loyalty plan landscape are increasing competition, which will ultimately benefit consumers,” says Luke Sheehan, Vice President of Marketing at Ratehub.ca. 

With that being said, serious questions remain about how Aeroplan will be able to afford to honour the nearly $2 billion worth of points that its members have accumulated. Air Canada’s original bid would have assumed Aeroplan’s points liabilities and enrolled all five million Aeroplan members into its own forthcoming loyalty program. 

From now until 2020, Aeroplan miles will remain intact and will continue to be redeemable with Air Canada. It’s yet to be seen whether Porter Airlines will offer the same value for Aeroplan points or change how points can be redeemed after 2020, but we’ll be keeping a close eye on any changes as they’re announced.

On the whole, Canadians are often too complacent about their rewards programs. Situations like this remind us all to review our wallets and the reward programs contained in them. For many of us, the rewards can add up to hundred or thousands of dollars in value, so we should ensure we use those rewards in a way that benefits us best.