AC to dump Aeroplan

[FA@AC]

Interesting move.

http://www.cbc.ca/news/business/air-canada-aeroplan-1.4109868

[Specs]

Was this a good move?  The new plan has a NPV of $ 2 Billion.   

[CanadaEH]

Is this a sign that WJ Rewards is having an impact on FF business? Industry trend? Or..... ? 

WestJet may not have business class but Plus is getting some significant changes in the fall and business class on the 787 (and who knows what else) in the future. 

[deicer]

I don't think WS has anything to do with it.  AC just wants to take back control of the information being collected and retailed, which they sold for the benefit of the former CEO.

[Maverick]

5 hours ago, deicer said:

I don't think WS has anything to do with it.  AC just wants to take back control of the information being collected and retailed, which they sold for the benefit of the former CEO.

If I remember correctly Aeroplan was sold for somewhere north of 1$ Billion and that was the biggest factor that kept AC from going under in the early 2000's.

You may want to keep that in mind when you're enjoying your gold-plated, indexed pension.   

[Seeker]

37 minutes ago, Maverick said:

You may want to keep that in mind when you're enjoying your gold-plated, indexed pension.   

Who has an indexed plan?  Certainly not any of the rank and file.

[dagger]

1 hour ago, Maverick said:

If I remember correctly Aeroplan was sold for somewhere north of 1$ Billion and that was the biggest factor that kept AC from going under in the early 2000's.

You may want to keep that in mind when you're enjoying your gold-plated, indexed pension.   

The sale proceeds accrued to ACE and were distributed to ACE shareholders. I wouldn't say it kept AC from going under. IIRC, some of the ATCS proceeds, mainly for ground assets like the Montreal and Winnipeg bases, were folded into the AC IPO, but not the Aeroplan sale proceeds.

[Seeker]

It sounds like there was some hard negotiating on pricing.  Aimia came up with their "best price" thinking they had AC over a barrel and AC called their bluff.  Undoubtedly there will be some hard feelings amongst those who have been collecting Aeroplan miles over the next while and some who will bail out but I would expect attractive incentives will be offered to get current Aeroplan collectors to sign up for the new program.  I also expect incentives for buying higher value fares and there's probably plans for co-branded credit cards (if there isn't already that will be the next thing that gets worked on).  Sentiment on the street is that it will be good for AC monetarily, it certainly gives more control over the program.

[dagger]

45 minutes ago, seeker said:

It sounds like there was some hard negotiating on pricing.  Aimia came up with their "best price" thinking they had AC over a barrel and AC called their bluff.  Undoubtedly there will be some hard feelings amongst those who have been collecting Aeroplan miles over the next while and some who will bail out but I would expect attractive incentives will be offered to get current Aeroplan collectors to sign up for the new program.  I also expect incentives for buying higher value fares and there's probably plans for co-branded credit cards (if there isn't already that will be the next thing that gets worked on).  Sentiment on the street is that it will be good for AC monetarily, it certainly gives more control over the program.

In negotiations, it ain't over until it's over. And I don't think it's over. Remember with Chorus, I said it wouldn't want to wait until 2018 or 2019 to get a new deal with AC. I was right on that one. AIMIA has a number of choices. Strike out as a less relevant domestic program like Air Miles offering accumulation and redemption at rates more like Avenir, or get a new deal with AC (and cut its distribution), or sell out to AC which would avoid a lot of messiness and allow AC basically to own the cash flow feeding the distributions. AC could sell off the foreign loyalty activities AIM manages. AC is going to get back some Unifor employees at AIM no matter what. A new loyalty program call centre will be staffed by Unifor employees, so absorbing AIM might actually be the cleanest thing to do. That's why AIM may wish to do a deal sooner rather than later because the closer it gets to 2020, the less it will be worth.

[Seeker]

6 minutes ago, dagger said:

In negotiations, it ain't over until it's over. And I don't think it's over.

You got that right, there's a dozen different things that could happen;  maybe Aimia re-considers and presents a better deal to AC, maybe AC buys them, maybe Westjet buys them!  Who knows?  Likely some late nights at various HQs coming up.

 

 

[DEFCON]

It would be quite the coup if AC was to take Aeroplan back by purchasing a controlling interest in the now depressed Aimia.

 

 

[Seeker]

6 minutes ago, DEFCON said:

It would be quite the coup if AC was to take Aeroplan back by purchasing a controlling interest in the now depressed Aimia.

 

 

A coup?  Well, that's one way of looking at it.  

[Super 80]

16 hours ago, CanadaEH said:

Is this a sign that WJ Rewards is having an impact on FF business? Industry trend? Or..... ?

I don't know if it is having a huge an impact, but I wouldn't be surprised if the new program is revenue based and looks a lot like WestJet Rewards.

[runaway]

On 5/12/2017 at 11:49 AM, Maverick said:

 

You may want to keep that in mind when you're enjoying your gold-plated, indexed pension.   

Wow! For someone who has self proclaimed "credentials" in this forum, that was a rather fatuous comment! 

Wear it like a champ!

[Maverick]

7 hours ago, runaway said:

Wow! For someone who has self proclaimed "credentials" in this forum, that was a rather fatuous comment! 

Wear it like a champ!

"Self proclaimed credentials" 

not this guy. 

[runaway]

11 hours ago, Maverick said:

"Self proclaimed credentials" 

not this guy. 

I think you did!

 

[Maverick]

18 minutes ago, runaway said:

I think you did!

 

What's your point? First off you obviously don't understand what "street cred" is as opposed to "credentials"

I'm not going to bother explaining it either but I am curious as to why you feel the need to defend someone else's post?

Deicer's a big boy and if he asks I'll explain.

Have a nice day.

[Seeker]

1 hour ago, Maverick said:

What's your point? First off you obviously don't understand what "street cred" is as opposed to "credentials"

I'm not going to bother explaining it either but I am curious as to why you feel the need to defend someone else's post?

Deicer's a big boy and if he asks I'll explain.

Have a nice day.

I'll jump in too.  I also called you on your statement about "gold-plated, indexed pensions", but you didn't reply to that.  There was actually three factual errors you made; first that the pensions are indexed - they are not, second that the money from the sale of Aeroplan went to AC - it actually went to ACE, and the third was that the money from the sale staved off bankruptcy in the early 2000s - AC did enter CCAA in 2003 and avoided it a second time in 2008-2009.  The money from the sale of Aeroplan wasn't a factor in either case.

[runaway]

2 hours ago, Maverick said:

What's your point? First off you obviously don't understand what "street cred" is as opposed to "credentials"

I'm not going to bother explaining it either but I am curious as to why you feel the need to defend someone else's post?

Deicer's a big boy and if he asks I'll explain.

Have a nice day.

Point is you're posting false material. Ok...I'll rephrase...self proclaimed "credibility"! Happy now? 

[Maverick]

Fair enough seeker. I thought the pensions were indexed. My bad, Are you happy now runaway?

As far as the funds from the sale Aeroplan I remember reading something about a chunk of that that was used to keep AC solvent at the time. As Milton has stated, AC was literally hours away from being shut down.

It's almost 15 years ago now but Aeroplan would have had significantly less value had AC gone under and ACE new that.

I somehow doubt we'll ever know what exactly went on at that time though.

[Fido]

4 hours ago, seeker said:

The money from the sale of Aeroplan wasn't a factor in either case.

Wellll yes and maybe and no

The people that put the money into the airline would not do it unless there was a way to get it back and since the airline itself was worthless they had to be given shares in ACE which would benefit from the sale of Aeroplan. 

[dagger]

On 2017-05-12 at 1:07 PM, seeker said:

It sounds like there was some hard negotiating on pricing.  Aimia came up with their "best price" thinking they had AC over a barrel and AC called their bluff.  Undoubtedly there will be some hard feelings amongst those who have been collecting Aeroplan miles over the next while and some who will bail out but I would expect attractive incentives will be offered to get current Aeroplan collectors to sign up for the new program.  I also expect incentives for buying higher value fares and there's probably plans for co-branded credit cards (if there isn't already that will be the next thing that gets worked on).  Sentiment on the street is that it will be good for AC monetarily, it certainly gives more control over the program.

In negotiations, it ain't over until it's over. 

[dagger]

The only time Aderoplan sale money was to come directly to AC to keep it afloat was the abortive deal by Onex (IIRC) to buy 30% of Aeroplan for $300 million. That deal died when AC went into CCAA in 2003.