RE:RE:RE:Where do we go from hereGreat commentary and analysis! Based on the Q3 2017 Report and the Earnings Call, it seems that the flight path for Aimia/Aeroplan is onwards and upwards...with or without Air Canada.
With the unchaining from Air Canada, Aimia/Aeroplan will become a true mutli-carrier loyalty rewards program. Aimia/Aeroplan will be well positioned to pursue disruptive new technologies and services that will leverage the Aeroplan brand.
Also, IF Air Canada changes its mind and decides to remain as a partner with Aimia/Aeroplan, it should be on a
NON-EXCLUSIVE basis so that Aimia/Aeroplan can still pursue a multi-carrier loyalty program strategy.
Loonee wrote: Aimia has averaged over $700MM in annual buying for flights which AC is giving up in favor of their new but narrow loyalty program. Aeroplan was very important to AC during the recession and Aimia loaned them $200MM during that time as I recall, keeping them afloat. Times are good, so AC thinks they can do better.
In June 2020 Aimia will have that seat buying power available for elsewhere and they know their members are more interested in flight options than a particular airline. The fees AC charges at redemption are much higher than Star Alliance flights.
Aimia has a contract in place with AC so they need to continue to buy atleast $500MM annually which is why they can't announce new partners right away in competition.
As an example, Aimia owns 49% of Club Premier (Aeromexico) and Canadians like to fly to Mexico.
Club Premier They are part of Sky Team, so I could see Aeroplan member being able to redeem and earn points with Sky Team (Delta, Air France) for US/Int'l flights.
Domestic could still include AC as a partner but include the low fare airlines on the horizon and/or Westjet or Porter. Aimia can leverage their buying power for discounts over market fare and expand their offering to include complete get-a-way packages (see recent vengagement video).
EBITDA , cash flow and debt levels relative to cash with no run on the bank in the past 6 months make the investment in AIM attractive. The potential for Aimia based on how well they execute make the investment attractive (speculative) over the medium to long term. The market will continue to cap the share price due to uncertainty but over the next couple of years the path will develop. Aeroplan is a strong brand with 5MM members and TD/CIBC contracts until 2024.