CALGARY — Air Canada is selling a 25% minority stake in its Aeroplan loyalty program to a group of institutional investors, in a deal that values the program at $10 billion.The airline announced Tuesday that funds managed by Blackstone and La Caisse are leading the $2.5-billion investment, with PSP Investments and British Columbia Investment Management Corporation (BCI) also participating.Air Canada will retain a 75% ownership interest in Aeroplan and continue to control the program's strategy, operations and day-to-day management. The airline said Aeroplan members, partners and employees should not experience any changes as a result of the transaction.“Aeroplan remains a core part of Air Canada’s commercial strategy and customer value proposition,” the company said in its announcement..The airline said Aeroplan members, partners and employees will not see any changes as a result of the deal.“This investment highlights Aeroplan as a differentiated loyalty platform and showcases the exceptional value created since its acquisition,” said John Di Bert, Air Canada’s executive vice-president and chief financial officer.Air Canada said the money from the investment will mainly be used to repay an upcoming US$1.2-billion, or about $1.7 billion, bond maturity. Most of the remaining money will be used to accelerate the airline’s planned share buybacks.The airline also announced plans to buy back up to $800 million of its own shares through a substantial issuer bid..Craig Landry, Air Canada’s executive vice-president and chief innovation officer and president of Aeroplan, said the airline remains committed to being the program’s majority owner.“Air Canada retains full control of the program, meaning partners, members, and employees can all expect full continuity of the program as they do today,” Landry said.Aeroplan has more than 10 million members worldwide and allows members to earn and redeem points through more than 50 airline partners, as well as hotels, car rentals and other partners.Air Canada expects the Aeroplan transaction to close on Monday, while the proposed share buyback is expected to launch afterward and be completed in September.
