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Many US based airlines have already pledged part of their loyalty programs in order to borrow money. AC has been rather secretive about its Aeroplan program especially since the US expansion with the JPM card. For JPM that was the largest new card program joint venture they have had in 10 years. AC has maintained the entire program as an unencumbered asset, not pledged it for any borrowing. The reason is simple. To prevent competitors from learning too much about the real value that has accrued in this program as it has grown rapidly in size even through covid era. It taps into households in Canada and in the US that have some of the best FICO scores. People who have spending power and people who are not reeling under debt. The question is.. how close is it getting to 10 million households? One of the funny Canadian stories is that it totally knocks out RBC's top credit cards. That's another story. In Canada, no loyalty program will ever come close to completing with Aeroplan. Aeroplan dollars also normalizes the seasonality from the airline side of the business and actually helps even it out. Many Aeroplan members are happy to travel in non peak seasons when their Aeroplan points gets them better value.and better upgrades. Welcome to premium. Seats. No longer a tiny part of the business but now a significant part of the business. Aeroplan turns this company into a finance and lifestyles business with an airline included.
Eventually the value of Aeroplan will get discovered and revealed. It will turn out to be greater than the market cap as calculated today for the entire airline. Long term shareholders will have the last laugh. GLTA.