Air Canada seeks credit card deal for $1.6 billion loyalty plan
Air Canada said it’s seeking a credit-card partner for its own frequent-flier program as it prepares to sever ties with Aimia Inc.’s Aeroplan in 2020.
The Montreal-based airline “will be inviting key financial institutions to participate’’ in a request for proposals, Chief Executive Officer Calin Rovinescu said in a statement Tuesday. The co-branded credit card will “yield significant value for us,’’ he later told investors at a presentation in Toronto.
Air Canada is looking to capture more benefits from a program expected to have a net present value of at least C$2 billion ($1.6 billion) over 15 years. Aeroplan was once part of Canada’s most popular credit card, Canadian Imperial Bank of Commerce’s Aerogold Visa. The two-decade partnership ended in 2013 when Toronto-Dominion Bank took over as the primary financial partner, though CIBC can still offer Aeroplan cards under a 10-year deal.
Air Canada’s contract with Aimia runs until June 2020. Aimia was spun off from the airline in 2005 and has managed the loyalty program, which rewards consumers with points for Air Canada flights.
Among other goals unveiled ahead of the investor meeting, Canada’s largest carrier said it’s targeting earnings before interest, taxes, depreciation, amortization, impairment and aircraft rent to represent 17 percent to 20 percent of operating revenue from 2018 until 2020.