What Would Aeroplan's Independent Future Look Like?

You should also do an article about what Air Canada's plans were. That seems like the most unrealistic to me. Aeroplan has a viable way forward. It seems like Air Canada would have to basically start everyone from zero.

"Dear loyal customer, we know you've been accumulating Aeroplan miles for years. Now with our new program, new flights will be Air Canada miles and you have to start from zero."
"Can I combine Aeroplan miles with Air Canada miles to make a redemption?"
"Nope"
"So if I have 20,000 aeroplan miles and 10,000 Air Canada miles, what can I get."
"Nothing!"

And exactly what details has Air Canada offered about their new program? ZERO.

Will they go revenue based?
Will they publish an award chart?
Will they continue to charge scam-charges (fuel and carrier charges)?
Will they increase points/miles for awards?

Funny how the offer is for 250 million, and Aimia has over 300 million in cash reserves!

@sullyofdoha

$300 million reserve is to cover the $1b in liabilities (i.e. outstanding points that have not been redeemed).

Lucky, you bring up good points about the viability of Aeroplan. However the proof will be in what Air Canada does in 2020. If they devalue their miles, stop publishing an award chart and we end up with Canadian Skymiles, who is to say Aeroplan would not have been better? We don't have a lot of options in Canada. Air Miles is alive and well and it has no associated airline yet people use it all the time for flights (not great value of course but they do). IF, and this is a big if, the Air Canada program is better or comparable to Aeroplan now, then it's a win. Otherwise, I think we'd have been better off with more competition and more options.

@omar where are you getting $1b in liabilities from?

Not everyone redeems their points for flights.
Points also expire which erases liability right there

Aimia also has a 49% stake in Aeromexico FF program which is worth over $200 million.

@iv
The one billion in liabilities is from their own reports.

Most do redeem for flights and a very few accounts expire, as per Aeroplan’s own annual presentation.

Aeroplan just declined Aeromexicos offer a couple of hours ago.

You don't mention a plan for how you would earn Aeroplan miles once the split would happen. If they no longer have a relationship with Air Canada arguably Air Canada may not let you credit your flights on Air Canada to Aeroplan. This may be the same for the other Star Alliance partners who only let you credit to Aeroplan because they are part of Star Alliance. Even if you still could earn Aeroplan miles on AC or Star Alliance flights, would the rates be the same as they currently are or would they be decreased. It is possible that Aeroplan would become just a shopping portal which you could redeem for flights.

I think agreeing to the sale was Aeroplan's only option and they were going to slowly fall to nothingness without Air Canada, because I see very little incentive for airlines to allow you to credit your points to a Frequent Flier program that is not affiliated with any airline... just my two cents though

Agree that Aeromexico stake is worth more in the vicinity of $400-500mm. The rejected $180mm offer was a lowball that was rejected immediately. I've been a bull on Aimia stock (and preferred stock) since it crashed last year. I still think it has some upside and probably will trade in the $5-6 range in the next 6 months in my opinion. The preferreds are already on their way to full $25 par value (+ deferred dividends since last year) which will pay out in any kind of liquidity event that covers all liabilities.

@Kevin - the vast majority of AP miles are not earned through flying but rather all the other partner programs and financial cards available. In fact, most airlines are now very stingy about awarding miles (see how U.S. airlines now award miles by revenue and have qualifying miles as a separate thing). It's not an earn problem, it's a redemption problem 😉

Of course American bloggers still see Aeroplan as an airline mileage/redemption program whereas in Canada it has been repositioned as a shopper loyalty program competing with the Air Miles shopping loyalty program. This is one of the reasons AC decided to decouple and start up its own FF program, preceded by establishing the Altitude elite identity program. Aeroplan sells more miles to its credit card partners and retail merchants than it does to AC and STAR partners, though redemptions are pretty much airline seats.

Without a major gas and grocery partner, Aeroplan has been crippled in its competition with the larger and more blue collar oriented Air Miles so it’s unlikely AIMIA could sustain a rollover to a new, pure shopping loyalty program should it sell Aeroplan to AC (and it seems Frequenta to AeroMexico). Management had attempted to position Aeroplan/Tangerine as a program for the upper income white collar world but with questionable results.

If it weren’t for the Amex Rewards conversion Aeroplan would mean nothing to most Americans.

@Omar, I think it is actually listed at 2billion in point liabilities. However, once AC takes over, they can devalue the points to whatever they want...OVER NIGHT. So, I look at this as a 50 million surplus deal for AC.

Why are lucky's lips blond in that cartoon pic of him lol