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
#61
Join Date: Apr 2007
Location: Toronto, Ont., Canada
Programs: Aeroplan; Marriott Platinum; IHG Platinum; Best Western Diamond
Posts: 2,172
Let's wait for Amex to announce a proposal to buy AIM at a slightly higher price, pending satisfactory contract of between Amex and ae.
Then Amex can further announce transfer of ae points to MR points, and merge the travel business of the new ae and Amex. The new program will be able to redeem on all airlines, not restricted to Star Alliance. This also shuts out TD/CIBC and Visa.
Then Amex can further announce transfer of ae points to MR points, and merge the travel business of the new ae and Amex. The new program will be able to redeem on all airlines, not restricted to Star Alliance. This also shuts out TD/CIBC and Visa.
Last edited by yscleo; Jul 25, 2018 at 10:36 am Reason: .
#62
Join Date: Oct 2006
Programs: Aeroplan E75K
Posts: 49
It looks so planned. I now understand why TD insisted that I don't get the Aeroplan-branded CC when I tried to apply for it a few months back.
I think this proves AC is realizing they will not meet the 2020 deadline and Aimia likely knows this. My guess is Aimia says no and waits for AC to ask for an extension to current contract. I wonder who else will make an offer for Aeroplan.
I think this proves AC is realizing they will not meet the 2020 deadline and Aimia likely knows this. My guess is Aimia says no and waits for AC to ask for an extension to current contract. I wonder who else will make an offer for Aeroplan.
#64
Join Date: Apr 2016
Location: YYZ
Programs: TK *G
Posts: 3,100
#66
Join Date: Jun 2010
Location: YYG
Programs: airlines and hotels and rental cars - oh my!
Posts: 3,012
It's definitely popcorn time. So much for all of this talk from AC about building a bigger better loyalty program moving forward. Looks like everything old is new again.
#67
Join Date: Aug 2001
Location: Ottawa and Montreal
Programs: SPG Gold / IHG Spire / Emerald Executive Elite
Posts: 457
Let's wait for Amex to announce a proposal to buy AIM at a slightly higher price, pending satisfactory contract of between Amex and ae.
Then Amex can further announce transfer of ae points to MR points, and merge the travel business of the new ae and Amex. The new program will be able to redeem on all airlines, not restricted to Star Alliance. This also shuts out TD/CIBC and Visa.
Then Amex can further announce transfer of ae points to MR points, and merge the travel business of the new ae and Amex. The new program will be able to redeem on all airlines, not restricted to Star Alliance. This also shuts out TD/CIBC and Visa.
Furthermore, such a new combined Amex-Aeroplan entity (controlling a much bigger customer base than AE alone) would more likely achieve a critical mass permitting it to create a more robust chartered flight "network" (well, big word here...) - thus stealing even more passengers from AC.
#68
Suspended
Join Date: Sep 2014
Programs: AC SE100K-1MM, NH, DL, AA, BA, Global Entry/Nexus, APEC..
Posts: 18,877
You know, among all the things one could buy with Aeroplan points - flights, hotel stays, panini grills, maybe a lawn mower, I would trade all of my miles just to be a fly on the wall in EACH of the meetings held to discuss this "divorce" and "possible dating leading to a new life partner"
QUOTE:
"What I’ve learned about this offer
The way Air Canada views it, taking over Aeroplan would create assurance for customers and remove any doubts they may have about their miles. Miles would covert at 1:1 ratio, so there would be no funny business.
No matter what, Air Canada intends to launch their own loyalty program, and they’ve already purchased a lot of new systems that will be required for a new program. They’re not looking to maintain Aeroplan, because they can do so much more with their program in-house. Instead they view a takeover of Aeroplan as providing more stability, giving them access to intellectual property, and making the transition more seamless."
Full article
"What Would Air Canada Buying Aeroplan Mean For Consumers?"
https://onemileatatime.boardingarea....roplan-impact/
QUOTE:
"What I’ve learned about this offer
The way Air Canada views it, taking over Aeroplan would create assurance for customers and remove any doubts they may have about their miles. Miles would covert at 1:1 ratio, so there would be no funny business.
No matter what, Air Canada intends to launch their own loyalty program, and they’ve already purchased a lot of new systems that will be required for a new program. They’re not looking to maintain Aeroplan, because they can do so much more with their program in-house. Instead they view a takeover of Aeroplan as providing more stability, giving them access to intellectual property, and making the transition more seamless."
Full article
"What Would Air Canada Buying Aeroplan Mean For Consumers?"
https://onemileatatime.boardingarea....roplan-impact/
#69
Moderator, Air Canada; FlyerTalk Evangelist
Join Date: Feb 2015
Location: YYC
Programs: AC SE MM, FB Plat, WS Plat, BA Silver, DL GM, Marriott Plat, Hilton Gold, Accor Silver
Posts: 16,827
Yes, so much egg on the faces of the people who are gloating about how they predicted this, when in fact they predicted that AC would buy Aimia, which is a totally different outcome.
AIM traded briefly above the proposed buy price of $3.64. It's really dirty of AC. But TD and CIBC would've been big losers in the AC cutting of ae, so it's not surprising for them to be in on this. Amex was not hurt too bad as they already have other ways for people to redeem MR.
As for Amex, yes, it's true that other avenues for MR redemption exist, but for many cardholders, I imagine that Aeroplan is the primary conversion route for MR because the value is so much better, especially for those with status. Some of the other MR options are okay, while some (e.g. Hilton) are downright awful.
If one looks at Amina balance sheet you see $300 Million of cash to cover $2 BILLION of points cost liability (this is cost - net of redemption margin). In any normal business, you would call this company bankrupt. it liabilities exceed its assets by a multiple of 6.5X.
There's no doubt the balance sheet is ugly, but that discussion starts with the $2.6 billion of goodwill and intangibles that may actually have little to no value. Aimia is also different than many other business in the vast majority of its long-term liabilities are deferred revenue ($3 billion), which liability may be possible to extinguish for a fraction of the accounting liability currently on the books. For example, let's just say for argument's sake that a round-trip in North America Y costs Aeroplan $100 from AC and that Aeroplan charged $0.01 per point for the 25K points they charge the customer to redeem that flight. Aeroplan spends $100 to earn that $250 of revenue (i.e. cancels $250 worth of deferred revenue liability on Aimia's balance sheet). But if Aeroplan increases the cost to 50K points, all of a sudden that $100 reward eliminates $500 of liability. Of course, devalue the award chart too much and it will drive customers away, but that ability to devalue the points does give Aimia a somewhat unique advantage relative to other struggling companies.
Aeroplan got a contract that was about 15 years long. That was the protection. Adding a non-compete on top of a contract like this makes no sense whatsoever, because it would force the airline to either be locked in to that particular FFP provider or forgo an FFP altogether.
Last edited by Adam Smith; Jul 25, 2018 at 11:18 am Reason: Added Accounting 101 re deferred revenue
#70
Join Date: Jun 2015
Location: DAY
Programs: Rapid Rewards, Skymiles, Hilton HHonors, SPG/Marriott Rewards
Posts: 4,991
#71
Join Date: May 2010
Location: Edmonton
Programs: Former AC SE, AC50KMM lifetime, IC Plat Ambassador, Fairmont Platinum, Marriott Titanium
Posts: 22
1. Very pleased with the move to repatriate the Aeroplan program. Creates higher level of confidence that I will be able to use my points
2. AC has already paid AIM for the program points. Now AC has to forgo revenue for that liability since AIM would have been required to pay AC for awards. With only $300 million, AIM would not have capability of satisfying the current liability
3. In the event of eventual failure or AIM, AC would out of necessity have to build their software engine sooner than 2020.
4. Downside would be that in order to minimize effect of liability, AC may further cut back on availability of flight awards. I currently find the program has been very poor in the last year for finding flight awards.
2. AC has already paid AIM for the program points. Now AC has to forgo revenue for that liability since AIM would have been required to pay AC for awards. With only $300 million, AIM would not have capability of satisfying the current liability
3. In the event of eventual failure or AIM, AC would out of necessity have to build their software engine sooner than 2020.
4. Downside would be that in order to minimize effect of liability, AC may further cut back on availability of flight awards. I currently find the program has been very poor in the last year for finding flight awards.
#72
Join Date: Jun 2013
Posts: 73
I don't think it changes much in terms of the spend/don't spend advice from before. Yes, miles would transfer from Aeroplan into the new AC program, but it would still be the new AC program which currently doesn't have award charts / mileage levels. There's no guarantee that the new program would have the same or better redemption rates / rules as the current Aeroplan
#73
Moderator, Air Canada; FlyerTalk Evangelist
Join Date: Feb 2015
Location: YYC
Programs: AC SE MM, FB Plat, WS Plat, BA Silver, DL GM, Marriott Plat, Hilton Gold, Accor Silver
Posts: 16,827
The other interesting point here that I think has not been appreciated much in this thread is that, based on AC's customer e-mail and updated FAQ this morning, they're still proceeding with the new program, regardless of whether they buy Aeroplan, which makes it sound like this is just a bridge move to keep existing customers happy by not stranding their points, and that Aeroplan would effectively be killed in 2020.
Inaccurate. I've already addressed this in detail in my last post.
Inaccurate. I've already addressed this in detail in my last post.
#74
Join Date: Mar 2001
Location: Toronto, ON
Programs: AC 75K
Posts: 6,369
The other interesting point here that I think has not been appreciated much in this thread is that, based on AC's customer e-mail and updated FAQ this morning, they're still proceeding with the new program, regardless of whether they buy Aeroplan, which makes it sound like this is just a bridge move to keep existing customers happy by not stranding their points, and that Aeroplan would effectively be killed in 2020.
On another note, AIMIA has responded.
https://www.aimia.com/newsroom/news-...plan-business/
It appears there have been private discussions for a while, and this is just making it public, and putting a time frame on an answer.
#75
Join Date: Jan 2017
Location: Halifax
Programs: AC SE100K, Marriott Lifetime Platinum Elite. NEXUS
Posts: 4,578
Amadeus allegedly has an addon package to provide a rewards/point system. Air Canada would not have a particularly difficult time filling in their program rules by 2020. They don't need the IT "intellectual property", and indeed, with a consortium of CCs as well, likely would have an easier time building out a greenfield system with the Amadeus (or some other) bundle than trying to upgrade the Aimia's internal tooling.