Air Canada has agreed to divest a quarter stake in Aeroplan, its loyalty program, to an investor consortium in a transaction valuing the operation at C$10 billion. The deal, led by Blackstone and including La Caisse, PSP Investments, and the British Columbia Investment Management Corporation, involves Air Canada selling for C$2.5 billion while maintaining a 75% ownership position and full operational authority over the program.
The transaction is scheduled to close on August 17. Air Canada intends to direct a portion of the proceeds toward servicing a US$1.2 billion bond that matures this year. The airline will retain majority control of Aeroplan, Canada’s largest airline loyalty program, despite the partial divestiture.
The C$10 billion valuation assigned to Aeroplan substantially exceeds Air Canada’s own market capitalization, which has ranged between C$5.5 billion and C$7.5 billion during the year. The disparity underscores the significant value the market attributes to the loyalty program relative to the airline’s core operations. Industry analysts note that while such valuations might suggest the loyalty business outweighs the airline itself, direct comparisons require consideration of differing valuation methodologies, as the airline’s market capitalization reflects equity value after debt, whereas the loyalty program figure represents an enterprise valuation.
The sale represents another chapter in Air Canada’s complex relationship with Aeroplan. The structure includes a repurchase provision, suggesting Air Canada has retained flexibility regarding future ownership adjustments to its loyalty platform.
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