There was a whole thread recently on what Air Canada's plan for Altitude is. Also some discussion in the MM recognition thread.

Basically, it's my view (and that of many others here) that Air Canada and Aeroplan (and its parent, Aimia) are moving away from each other.

I won't regurgitate too much of what I said in the other threads (especially this post), but here are a few key pieces of information.

1. As pointed out by RCyyz, Aimia is diversifying away from Aeroplan. Aeroplan is still the lion's share of its business, but they're managing loyalty programs in several countries across a variety of industries.

2. Despite its name and history, Aeroplan points are redeemed less and less for flights. Of Aimia's spending on rewards in 2014, only ~40% of it was on flights (Air Canada and other Star Alliance). The rest is going on blenders, movie passes, etc, and that shift continues every year.

3. Most of Aeroplan's revenue comes not from selling points to AC to distribute to FFs, but from selling points to credit card companies and retailers.

4. Aeroplan is not a huge customer for Air Canada. It represents ~5% of AC's revenue, and the contracted volume of seats that Aeroplan must purchase is even less than that. Aeroplan tickets are generally lower yielding than regular revenue tickets. It's also arguable that Aeroplan is no more a customer than any travel agent and that it's merely a distribution channel. Altogether, I don't think AC would be sad to see Aeroplan go.

5. The fact that both companies have created their own distinct loyalty programs (Altitude and Distinction) says that the old way of doing things was no longer the best way of rewarding either company's best customers.

Bottom line (in my opinion): on or before the expiry of the current AC/Aeroplan agreement in 2020, we will see a distinct split between Aeroplan and Air Canada. Aeroplan will become even more like Air Miles, allowing you to redeem points for flights on many different airlines or for a wide variety of merchandise etc. Altitude will at some point end up issuing its own points, which will be used exclusively to book AC/*A reward tickets, and distribution of those points will be far more focused on AC FFs than Aeroplan currently is - much like Aeroplan was many years ago.