Air Canada spun off its frequent flyer program Aeroplan into a separate company. Aimia owns Aeroplan along with other loyalty programs including a 49% stake in Aeromexico’s Club Premier.

Last year Air Canada announced they weren’t going to renew their exclusive partnership with Aeroplan after their 15 year deal expires at the end of June 2020. Instead they’d launch a new program. They’ve found it frustrating to work with Aeroplan, and see potential profits in co-brand credit card deals.

Aeroplan is preparing to go it alone in two years, describing how they’ll still add value to consumers. Meanwhile Air Canada came in with an offer — along with Aeroplan’s credit card partners — to buy back the program. Aimia stock jumped on the news.

Air Canada would pick up their 5 million members quickly, something they’d have to invest heavily to do on their own. And they’d eliminate a potential competitor. Meanwhile Aeroplan’s bank partners would still have a co-brand deal with Canada’s largest airline.

At the end of the day the deal wouldn’t realize much for Aeroplan, but their stock had been off better than 80%. The markets seem to want a deal. Now, it seems, Aimia’s play is to get the best price possible.

Aeroplan is confirming partnership discussions with oneworld but refusing to elaborate on details other than to say they’re discussing becoming a “potential preferred airline partner.”

• Air Canada is a Star Alliance member
  
• oneworld has not had a significant presence in the country since the collapse of Canadian Airlines

Perhaps they’re discussing whether it’s possible to buy access to saver inventory on oneworld airlines. Almost anything can constitute a ‘discussion’ that lacks greater detail. I’d guess any success endeavor of this sort would need to be negotiated bilaterally with each participating airline rather than with the oneworld alliance as a counterparty.

I imagine this amorphous news is leaking to make acquiring Aeroplan seem more urgent to Air Canada, eliminating potentially stronger competition justifying a higher price. At the same time they’re signaling they have options that would strengthen the program if a deal falls apart and they go it alone.

Air Canada had set a deadline of today for Aimia to respond to their offer. But the same forces that make the proposed deal attractive today will do so tomorrow, and they’re no doubt having conversations (likely around price).

With Aimia up about 40% since Air Canada’s offer, and not only still up but trading even slightly further up today as of this writing, it doesn’t look like Air Canada is about to walk leaving Aeroplan without a suitor.