CEO Blog

14 September 2018

Written by Ravindra Bhagwanani on . Posted in Archives

AP-AC

The drama around Aeroplan/Aimia has come to an end for the moment, with a consortium led by Air Canada and Aimia agreeing in the end to the sale of the Aeroplan program back to Air Canada. At the surface, this is good news for all Aeroplan members since they don’t need to worry about the continuity of their program. On the other hand, what happens to all the work Air Canada has put into the launch of a more attractive offering for over one year, given that they don’t need to compete against an independent Aeroplan program anymore? Customers would have been more confused with Air Canada launching an own offer, but in the end most likely better off. Winners in this fight are definitely also all frequent flyers around the world since it is clear that Aimia won’t find any followers anymore for its value-destroying concept. Yes, Aimia used to be highly profitable in its best days – but where did this money come from? An airline-controlled program is likely to take less value out of the program. And the loser is as well Canadian airline Porter Airlines, which enthusiastically announced to abandon its small, but cute VIPorter program and adopt Aeroplan as of 2020. This will certainly not happen anymore and they will now face even stronger competition from a renewed Aeroplan program benefitting from Air Canada’s full backing.