**Blackstone to Acquire $2 Billion Stake in Aeroplan**
Blackstone is reportedly approaching a $2 billion investment in Air Canada’s Aeroplan loyalty program for a minority ownership. Some Canadian funds are also anticipated to participate, with an announcement expected shortly. This action is designed to generate funds for new aircraft and interior enhancements in light of financial strains from escalating fuel costs. Airlines frequently utilize loyalty programs for financing, demonstrated during the pandemic when U.S. airlines secured over $25 billion by using such programs as collateral.
Traditionally, Air Canada has pursued external funding for its loyalty initiatives. Aeroplan was once an independent entity, Aimia, until Air Canada reacquired it in 2019 for $450 million CAD.
**Should Aeroplan Members Be Concerned About This?**
External funding generally focuses on profitability, which may affect customer experience. Nonetheless, Blackstone’s minority stake could restrict its leverage. Aeroplan’s worth has declined due to sector-wide shifts, not just Air Canada’s management. The program is less effective for Star Alliance award redemptions, a pattern impacting all loyalty schemes.
**Bottom Line**
Air Canada is nearing a deal to sell a minority stake in Aeroplan to Blackstone for $2 billion. While outside investors may aim for returns, significant impacts on members are improbable. Aeroplan’s history as an independent company indicates potential advantages from external investment.
What are your thoughts on Blackstone’s investment in Aeroplan?