Blackstone Nears Deal For $2 Billion Aeroplan Stake After Air Canada Bought It Back For A Song

Air Canada is reportedly close to selling a stake in its Aeroplan frequent flyer program to Blackstone for $2 billion. The deal could be announced as early as this week, said the people, who asked not to be identified discussing confidential information. Some Canadian funds are set to invest in Aeroplan alongside Blackstone at the same time, the people said. Air Canada is seeking to raise money in the midst of a multibillion-dollar program to buy new aircraft and renovate the interiors of existing ones as it plots new routes. The airline operates more than 300 planes and expects to reach nearly 400 by 2030. The portion of Aeroplan being sold is being referred to as a ‘minority’ stake though I’ve also seen reference to 20%. It’s not clear whether any governance rights will come with this investment. Aeroplan Was Spun Off Once Before Aeroplan was created in 1984 and became the world’s first publicly traded loyalty program and the first airline frequent flyer program monetized through a public offering in 2005. I’ve never actually figured out the true ‘sales price’ for Aeroplan twenty years ago, and most of the reported figures get it wrong. The IPO raised CAD$287.5 million. Those proceeds were put towards a CAD$400 million reserve against the value of accumulated points. The initial IPO sold off 14.4% giving Aeroplan an implied value of CAD$2 billion Air Canada’s parent later received about CAD$1.19 billion in three separate tranches, so gross proceeds totaled nearly CAD$1.5 billion. But they also transferred about 108 million Aeroplan units to their shareholders. Nonetheless, the value of Aeroplan in 2005 was relatively quite small! When the program was spun off, Air Canada agreed to a 15-year term during which Aeroplan would remain its exclusive frequent flyer program, with four potential five-year renewals that were automatic unless notice was given at least 12 months before expiration. Air Canada Only Just Bought Back Aeroplan Before The Pandemic On May 11, 2017, Air Canada gave notice that it would not renew and announced it would introduce its own loyalty program in 2020. Aeroplan parent Aimia’s shares fell 63% that day. In 2018, Air Canada re-acquired Aeroplan in an announced deal that included CAD$450 million cash plus CAD$1.9 billion of point liabilities. This was eventually adjusted to CAD$516 million. TD, CIBC, Visa and American Express funded the transaction signing long-term co-brand and payment network agreements. Commercial consideration Prepayment for future points TD C$622 million C$308 million CIBC C$200 million C$92 million Visa and Amex combined C$390 million — Total C$1.212 billion C$400 million How Valuable is Aeroplan? Air Canada now says Aeroplan has more than 10 million active members worldwide, versus more than five million when the acquisition closed. In 2025, it received CAD$1.98 billion for points issued to partners. It had a deferred revenue balance of $4 billion. Aeroplan is currently about a CAD$2 billion a year points sales business. They do not disclose their gross margin. The major U.S. airlines have reported in the past margins of 39% – 53%, but these should be treated as ‘order of magnitude’ only and aren’t really comparable to each other or other airlines, because they set their own internal prices for transactions with the airline. Interchange in Canada is about 20% below that of the U.S., so we can assume that while cobrand deals are lucrative they may be slightly less lucrative than in the States. However, Air Canada also occupies a unique market position in a way that U.S. brands are more competitive with each other. While there are ways of inferring program value from program size, member activity and cobrand card numbers, the best valuation exercise is going to be the market test – what Blackstone and others are ultimately willing to pay for this stake. Topics on this page