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Aeroplan parent in talks with Oneworld airline alliance amid Air Canada’s hostile takeover bid

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  • Jan 10th, 2019 3:51 pm
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Aeroplan parent in talks with Oneworld airline alliance amid Air Canada’s hostile takeover bid

From The Globe and Mail Aug 1 8:48 pm EDT.

Aeroplan parent in talks with Oneworld airline alliance amid Air Canada’s hostile takeover bid

Bobby Yip/Reuters
Aeroplan’s parent company, Aimia Inc., is in partnership talks with the Oneworld airline alliance as it fends off a hostile takeover bid from Air Canada and three financial partners.The talks, which Aimia confirmed on Wednesday, extend the company’s efforts to reposition Aeroplan once its contract with Air Canada expires in 2020.Under new leadership, the loyalty program has recently promised not to change the cost of booking flights for members once the Air Canada contract ends. It has also publicly stated members will be able to book seats on any airline come 2020.Behind the scenes, Aimia has also been negotiating a new partnership with the Oneworld alliance, whose member airlines include British Airways, American Airlines and Cathay Pacific. Oneworld is a direct competitor to Star Alliance, of which Air Canada is a member.“I can confirm that we are in discussions with Oneworld as a potential preferred airline partner,” an Aimia spokesperson wrote in an e-mail to The Globe and Mail.The negotiations are continuing and may not result in a partnership. However, their revelation casts a new light on the takeover bid led by Air Canada – which expires on Thursday.Last week, the airline teamed up with Toronto-Dominion Bank, Canadian Imperial Bank of Commerce and Visa Canada Corp. on an offer to purchase the Aeroplan program for $250-million in cash. Air Canada and its partners would also assume a $2-billion outstanding liability on Aimia’s books for loyalty points that have not yet been redeemed. Aimia currently has $300-million in cash reserved to cover these liabilities.The bid comes a year after Air Canada unveiled plans to launch its own loyalty program, prompting shares in Aimia to plummet 63 per cent in a single day.When announcing the offer, Air Canada and its partners gave Aimia eight days to reply. It was unclear why they provided such a tight window.When Air Canada reported earnings last Friday, chief executive Calin Rovinescu said the bid has such a short time frame because the airline will need to refocus on building its own in-house program if it is rejected.However, in a question-and-answer section of its website, Air Canada has stated that it became aware of talks between Aimia and others – but wouldn’t specify which discussions they were. “There have been other proposed transactions to purchase Aimia over the past several months,” the website reads.Last week, a day after the consortium’s bid became public, Aeromexico announced its own hostile offer to purchase Aimia’s stake in a Mexican loyalty-rewards program. Although it was not a bid for the whole company, it is possible Air Canada became aware of Aeromexico’s interest.Air Canada has reason to fear a partnership with Oneworld. For decades, the airline has counted on a steady stream of customers from the Aeroplan partnership to fill its seats, and while Air Canada decided to build its own loyalty program, Aeroplan members would still book a sizable number of its seats, assuming they would be able to book seats on any airline.Yet, if Aimia signs a new preferred partnership with Oneworld, it would have financial incentives to promote travel on the alliance’s airlines – which could siphon customers from Air Canada.The revelation of talks with Oneworld also indicates Aimia is developing a strong business plan under new CEO Jeremy Rabe – something that would threaten an Air Canada in-house loyalty program.For the first year after the airline announced its breakup from Aeroplan in May, 2017, Aimia spent most of its time putting out fires, including cutting its dividend and selling a loyalty business it owned in Britain.However, after 12 months with little progress on a business strategy, Aimia replaced its CEO in late May; Mr. Rabe has a history in the loyalty-rewards market. In the three months since, Aeroplan has quickly revamped. Air Canada declined to comment for this story. Oneworld could not be reached for comment.
51 replies
Jr. Member
Jul 4, 2018
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Thanks for posting this as I don't have a Globe and Mail subscription!
Banned
Mar 13, 2018
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Just a lot of noise and desperation from Amima, one world is of little value to Aeroplan members as it doesn't have a Canadian airline in it and limits trips originating from Canada
Deal Addict
Nov 13, 2013
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Ottawa
Gboard2 wrote:
Aug 2nd, 2018 6:48 am
Just a lot of noise and desperation from Amima, one world is of little value to Aeroplan members as it doesn't have a Canadian airline in it and limits trips originating from Canada
I don't know American Airlines has good reach in Canada and there are also good Asian connections from Vancouver. I know frequent flyers who do most of their flying internationally that have switched to OneWorld or SkyTeam. Someone sitting on a ton of Aeroplan will have even more incentive to switch and will not just cost Air Canada the points but actual paying customers.
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fogetmylogin wrote:
Aug 2nd, 2018 7:26 am
I don't know American Airlines has good reach in Canada and there are also good Asian connections from Vancouver. I know frequent flyers who do most of their flying internationally that have switched to OneWorld or SkyTeam. Someone sitting on a ton of Aeroplan will have even more incentive to switch and will not just cost Air Canada the points but actual paying customers.
Is this a joke? Good reach in Canada from American Airlines?

Good Asian connections from Vancouver? Not on American and cx limits severely availability of oneworld partners

Can't even goto Europe without a stopover and BA has even higher fees than air Canada and there's no getting around it by other partner airlines.

Oneworld is terrible option for anyone with Aeroplan points and based in Canada for flight redemption

This as someone with over 200k in Avios and a Marco Polo member

Oneworld is terrible for travel originating from Canada especially for a rewards program. Just take a look in the annual Avios bonus thread and see all the complaints about one world for redemption for flights originating in Canada
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Nov 3, 2006
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Mississauga
AA has no partnerships with any Canadian carrier (unlike Delta or United). OneWorld network is just too sparse, so it is not very useful for anyone not travelling to/from the home range of a member airline.

I'm not sure what kind of game Aimia is playing, but I'm enjoying this soap opera :cool:
Jr. Member
Jul 4, 2018
131 posts
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Aimia has rejected the offer from Air Canada. Let's hope these discussions with OneWolrd turn into something solid for current members
Deal Addict
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Feb 14, 2009
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TheLawB wrote:
Aug 2nd, 2018 9:34 pm
Aimia has rejected the offer from Air Canada. Let's hope these discussions with OneWolrd turn into something solid for current members

...people unload points, available inventory is
depleted to the bottom... frustrated customers... shares go down...
AP == ApocalyPses tomorrow.

Canada Tire money, at least, can be used playing Monopoly!

Cheers!
Banned
Mar 13, 2018
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TheLawB wrote:
Aug 2nd, 2018 9:34 pm
Aimia has rejected the offer from Air Canada. Let's hope these discussions with OneWolrd turn into something solid for current members
They can just go straight to shareholders
Deal Fanatic
Nov 24, 2013
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Kingston, ON
TheLawB wrote:
Aug 2nd, 2018 9:34 pm
Aimia has rejected the offer from Air Canada. Let's hope these discussions with OneWolrd turn into something solid for current members
Maybe they'll accept AC if they come back at a higher number? Or maybe not now with Porter joining the mix.
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Mar 13, 2018
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mgn2000 wrote:
Aug 3rd, 2018 7:21 am
Aimia lands Porter as Aeroplan partner amid Air Canada fallout

https://www.bnnbloomberg.ca/aimia-lands ... -1.1118666
Lolz...they're turning themselves into a meme

Porter...we can now fly turbo props in economy from Toronto. Island to mtl on a clear day! Lol
Newbie
Aug 3, 2017
96 posts
47 upvotes
I think the pressure will ratchet up and if the rumours on other forums are true that the AC group upped their bid to $325M while the Aimia counter was $450M, I can't see this not getting done. Porter and One-World have no market penetration in Canada at all. People have always complained about the number of seats available on Star Alliance which probably has 75+% of seats in and out of Canada, yet the new arrangement would be Porter with regional flights in the dozens per day and AA which only fly to certain US/Canadian gateway cities and nothing international or sun direct?

If Westjet were still AA affiliated this could make limited sense, but that ship sailed when WS went with Delta.

I still bet that this deal happens, even if it means an Aimia shareholder revolt to remove the board and executives. Going to be a fun few months to watch this unfold.
Newbie
Nov 23, 2010
10 posts
3 upvotes
Looks like the Air Canada relationship is over. Any idea how long we have to use up Aeroplan points on Air Canada flights?

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