Aug 21, 2018, 8:23 am
Last edit by: yyznomad
For those of you interested only in the revised $450-million deal and related discussion, it starts on post 418:
https://www.flyertalk.com/forum/air-canada-aeroplan/1926409-update-aimia-accepts-air-canada-td-cibc-visa-revised-450-million-aeroplan-bid-28.html#post30109427
https://www.flyertalk.com/forum/air-canada-aeroplan/1926409-update-aimia-accepts-air-canada-td-cibc-visa-revised-450-million-aeroplan-bid-28.html#post30109427
Update: Aimia accepts Air Canada, TD, CIBC & Visa revised $450-million Aeroplan bid
Jul 29, 2018, 8:20 am
#166
Suspended
Join Date: Sep 2014
Programs: AC SE100K-1MM, NH, DL, AA, BA, Global Entry/Nexus, APEC..
Posts: 18,877
Air Canada's CEO calls Aeroplan bid ‘extremely generous’ — but Aimia’s top shareholder disagrees
July 27 2018
https://business.financialpost.com/t...lder-disagrees
July 27 2018
https://business.financialpost.com/t...lder-disagrees
Jul 29, 2018, 8:38 am
#167
Formerly known as newbie elite
Join Date: Feb 2002
Location: YUL
Programs: IHG Diamond Ambassador, Accor Platinum, AC50K
Posts: 2,928
Sure. But if they have 20 years worth of data that indicates that an AP member has never bought a business class or a preferred seat, and they have an empty business, PY, or preferred cabin after all their usual and customary efforts to sell them, they're not, for example, foregoing any revenue by making an offer to upgrade to such with points. The customer would have almost *never* paid for that otherwise.
Even 10 years ago, running such queries on the sort of datasets AC/AP works with would have been impossible given the sort of constraints in computing. Today with the sort of computing power available, its completely plausible that 5 minutes prior to boarding, offers of such nature go out to customers' smartphones.
AP as a separate entity didn't allow that to happen as the negotiation involved and commercial arrangements would be too complicated to work out. A new program altogether would have lacked the rich retrospective data on which decision making could be based, and would've taken years to generate a good database. So AC basically had little other reasonable option here.
Even for email marketing, if you do, say, a YYZ-HKG search on AP and don't end up booking it, AC could hit you with follow-up emails during revenue seat sales for that route. Or purchase online targeted ads on various platforms. Much like Amazon does. Again, something that just wasn't possible with AP being a separate entity as AP definitely wouldn't want to promote the purchase of revenue tickets through AC directly.
Even 10 years ago, running such queries on the sort of datasets AC/AP works with would have been impossible given the sort of constraints in computing. Today with the sort of computing power available, its completely plausible that 5 minutes prior to boarding, offers of such nature go out to customers' smartphones.
AP as a separate entity didn't allow that to happen as the negotiation involved and commercial arrangements would be too complicated to work out. A new program altogether would have lacked the rich retrospective data on which decision making could be based, and would've taken years to generate a good database. So AC basically had little other reasonable option here.
Even for email marketing, if you do, say, a YYZ-HKG search on AP and don't end up booking it, AC could hit you with follow-up emails during revenue seat sales for that route. Or purchase online targeted ads on various platforms. Much like Amazon does. Again, something that just wasn't possible with AP being a separate entity as AP definitely wouldn't want to promote the purchase of revenue tickets through AC directly.
Jul 29, 2018, 5:46 pm
#168
Join Date: Apr 2007
Location: Toronto, Ont., Canada
Programs: Aeroplan; Marriott Platinum; IHG Platinum; Best Western Diamond
Posts: 2,165
Air Canada's CEO calls Aeroplan bid ‘extremely generous’ — but Aimia’s top shareholder disagrees
July 27 2018
https://business.financialpost.com/t...lder-disagrees
July 27 2018
https://business.financialpost.com/t...lder-disagrees
OTOH ae just announced the plan for ae 2.0, with redemption rate mostly the same, and even will have charter plans. That must have spooked AC. Meanwhile TD and CIBC know they'll have trouble keeping ae visa card customers as they get closer to 2020. So AC/TD/CIBC feel they can still buy ae on the cheap, and stop the bleeding.
ae can always ask for on Aug. 1, then announce good quarterly results on Aug. 2, then ask for a higher price. The coming few days should be interesting.
Jul 30, 2018, 6:57 am
#169
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Join Date: May 2002
Location: YEG
Programs: HH Silver
Posts: 56,449
https://ottawacitizen.com/transporta...c-b218a2197ce2
Big shareholder tells Aimia rejecting Air Canada’s offer for Aeroplan would be ‘suicidal’
Big shareholder tells Aimia rejecting Air Canada’s offer for Aeroplan would be ‘suicidal’
Jul 30, 2018, 10:51 am
#172
Join Date: Apr 2007
Location: Toronto, Ont., Canada
Programs: Aeroplan; Marriott Platinum; IHG Platinum; Best Western Diamond
Posts: 2,165
AC stands to gain a lot when they can integrate the ae system back with their own booking system. Also merge the call centres, so the same call centre staff can handle both AC booking and award bookings.
Jul 30, 2018, 12:41 pm
#173
Join Date: Jun 2018
Location: YVR
Programs: AC SE100K, Bonvoy Platinum Elite, IHG Gold, Hertz 5*
Posts: 2,132
Can I just say how amusing I find it that so many people are calling this "dirty" and "sleazy"? Do people live under a rock? This is how business has always been done between every corporation everywhere in the world. It's not "sleazy". It's smart. Full stop.
Jul 30, 2018, 1:25 pm
#174
FlyerTalk Evangelist
Join Date: Mar 2005
Location: YYZ
Programs: AC*SE 2MM
Posts: 16,655
Of course he'd say that
https://ottawacitizen.com/transporta...c-b218a2197ce2
Big shareholder tells Aimia rejecting Air Canada’s offer for Aeroplan would be ‘suicidal’
Big shareholder tells Aimia rejecting Air Canada’s offer for Aeroplan would be ‘suicidal’
Common shareholders may take a more nuanced approach.
Last edited by The Lev; Jul 30, 2018 at 3:24 pm
Jul 30, 2018, 3:17 pm
#175
Join Date: Apr 2009
Location: YYC / random hotel in YYZ
Programs: Back of the bus
Posts: 922
This is the biggest shareholder of preferred shares. As such he has a huge vested interest in getting Aimia to accept almost any offer. Preferred shares are kind of like debt - there is no "upside" beyond promised fixed dividends if the company enjoys very strong results - only downside if the company craters. As such he has no upside if Aimia gets AC and partners to raise their bid to say $400 million but does have downside if the deal is rejected and aeroplan 2.0 doesn't go as planned.
Common shareholders may take a more nuanced approach.
Common shareholders may take a more nuanced approach.
Thanks for posting this!
Jul 31, 2018, 4:06 am
#176
FlyerTalk Evangelist
Join Date: Jun 2003
Location: YYC
Posts: 23,804
Bottom line being that the miles liability is worth much less to AC than it will e to an independent Aeroplan, which will need to pay good money compared with the peanuts they currently pay.
I see no reason to have sympathy for Aeroplan in this game. I really enjoy what AC is doing to the crooked game that AE is. And always was. Way too much smoke and mirrors going on. People and businesses making money on stuff with no real value added to the economy. Just like all these booking engines which suck money in the gap between customers and hotels/airlines; I always book directly whenever I can.
I see no reason to have sympathy for Aeroplan in this game. I really enjoy what AC is doing to the crooked game that AE is. And always was. Way too much smoke and mirrors going on. People and businesses making money on stuff with no real value added to the economy. Just like all these booking engines which suck money in the gap between customers and hotels/airlines; I always book directly whenever I can.
Last edited by tcook052; Jul 31, 2018 at 7:14 am Reason: edit off topic
Jul 31, 2018, 10:42 am
#177
Join Date: Apr 2007
Location: Toronto, Ont., Canada
Programs: Aeroplan; Marriott Platinum; IHG Platinum; Best Western Diamond
Posts: 2,165
Dirty. Sleezy. Betrayal. Maybe you operate like that. But AC definitely damaged its name and reputation. If AC wants to spin ae out for money again, everyone knows AC is a dirty/sleezy/underhanded partner.
Jul 31, 2018, 10:53 am
#178
Join Date: Nov 2017
Posts: 3,359
AC sold ae out for money. AC and ae depended on each other and it'll be good business to keep each other running well. AC then announced cutting ties to ae, driving down the share prices, and now come back to offer to buy it back on the cheap. That is not business as usual.
Dirty. Sleezy. Betrayal. Maybe you operate like that. But AC definitely damaged its name and reputation. If AC wants to spin ae out for money again, everyone knows AC is a dirty/sleezy/underhanded partner.
Dirty. Sleezy. Betrayal. Maybe you operate like that. But AC definitely damaged its name and reputation. If AC wants to spin ae out for money again, everyone knows AC is a dirty/sleezy/underhanded partner.
If I was Aeroplan and AC pulled this one on me, I would call their bluff and say, the heck with it why don't we cancel our contract now and you work out the rest... good luck! I suspect AC would be in a way more desperate situation than Aimia would be in!
Safe Travels,
James
Jul 31, 2018, 11:11 am
#179
Join Date: Dec 2011
Location: YYZ
Programs: AC SEMM / HH Diamond
Posts: 3,167
AC sold ae out for money. AC and ae depended on each other and it'll be good business to keep each other running well. AC then announced cutting ties to ae, driving down the share prices, and now come back to offer to buy it back on the cheap. That is not business as usual.
Dirty. Sleezy. Betrayal. Maybe you operate like that. But AC definitely damaged its name and reputation. If AC wants to spin ae out for money again, everyone knows AC is a dirty/sleezy/underhanded partner.
Dirty. Sleezy. Betrayal. Maybe you operate like that. But AC definitely damaged its name and reputation. If AC wants to spin ae out for money again, everyone knows AC is a dirty/sleezy/underhanded partner.
OK, but that's not my view. My read is that Aimia was spun off as a separate business a full 15 years ago. For that entire time, they have known that the contract with AC was up for renewal (and thus, potentially ending) in 2020. Despite this knowledge, in 15 years Aimia failed to diversify their customer base. Now, their primary customer is walking away, and Aimia are in desperate straits as a result.
If Aimia had done a proper job of diversifying and expanding their operations and their customer base, then the loss of a single customer (AC) would not have had a significant impact on their stock price. AC may still have wished to purchase the Aeroplan assets, in order to ease the transition of their (AC) customers from Aimia's loyalty program to AC's loyalty program .... but if Aimia had done a proper job over the past 15 years, then AC would have had to pay a premium for those assets.
The collapse of Aimia's stock price is entirely due to Aimia's lack of execution and business accumen over the past 15 years. Your anger (Dirty, Sleazy, Betrayal) seems like a reasonable set of emotions for how an Aimia shareholder should be feeling about the Aimia board. AC were just a customer who decided to walk away.
Jul 31, 2018, 11:34 am
#180
FlyerTalk Evangelist
Join Date: Jun 2003
Location: YYC
Posts: 23,804
You cannot simply cancel a contract that's in place. Plus, the current deal is such a sweet deal for Aeroplan. Cancelling it right away would likely translate into sudden death.