Blackstone Inc. and a consortium of Canadian pension funds are reportedly nearing a deal to acquire a 25 percent minority stake in Air Canada's Aeroplan loyalty program at a valuation of C$2.5 billion, or approximately $1.8 billion U.S.
Air Canada plans to deploy the proceeds to finance new aircraft acquisitions and upgrade existing cabin interiors as the airline manages elevated fuel costs.
Loyalty programs represent a high-margin segment of the airline business, often accounting for a majority of an airline's overall valuation. Airlines have long used these programs as financing tools. During the 2020 pandemic, the three largest U.S. carriers collectively raised more than $25 billion through debt deals collateralized by their loyalty programs.
Blackstone's position in Aeroplan goes beyond collateralized financing — the firm is taking a direct equity stake, giving it a degree of influence over the program's operations and strategic direction.
Aeroplan has a history as a distinct entity. Following Air Canada's bankruptcy protection filing in 2003, the loyalty program was spun off and listed as a separate publicly traded company in 2005, later rebranded as Aimia.
The relationship between Air Canada and Aimia subsequently deteriorated. In 2017, Air Canada announced it would not renew its contract with Aimia and would launch its own competing loyalty program. The airline ultimately reacquired Aeroplan from Aimia for C$450 million ($323 million U.S.) in cash, plus the assumption of certain liabilities.
Outside investment in loyalty programs can prioritize margin expansion in ways that alter customer benefit structures. Aeroplan's value proposition for members was arguably strongest when the program operated as a fully separate company.
The current transaction, however, involves a 25 percent minority stake, limiting Blackstone's direct operational control. The broader erosion of miles-and-points value across the industry has been driven largely by structural changes in the sector rather than Air Canada's own decisions.
An official announcement is expected in the coming days.
