Air Canada Crushes Aimia Inc. Shares by Announcing its Own Frequent Flyer Program

Air Canada (TSX:AC) and Aimia Inc. (TSX:AIM) shares are moving in opposite directions during Thursday’s trading after the airline announced it would be starting up its own frequent flyer program when its current contract with Aimia expires in 2020.

Benjamin Smith, Air Canada’s President of Passenger Airlines said, "similar to all of Air Canada’s North American peers, by managing our own loyalty program, we will be able to take better care of our customers by making decisions in real time that address specific needs."

It’ll be business as usual between Air Canada and Aimia between today and the contract expiry date of June 29, 2020. Aeroplan members can continue earning and redeeming their reward miles. After Air Canada launches its own program, it will no longer give loyalty rewards to Aeroplan members booking Air Canada flights. Aeroplan members will still be able to redeem their rewards for flights, but the parent company will have to pay the same rate as other travel rewards cards.

Many of Aeroplan’s largest customers are frequent travelers. These folks get points from business flights and hotel stays, and then use them for personal vacations. If they can no longer collect Aeroplan rewards from flights, they will switch to Air Canada’s new loyalty program.

Aimia shares were absolutely crushed on this news, falling $5.23 each or 58.6% to $3.70. That’s a new all-time low. Air Canada, meanwhile, saw its shares surge $1.53 each or $10.3% to $16.42.