MONTREAL — The operator of the Aeroplan loyalty program is urging members to be patient as it seeks a new airline partner while working to broaden the card's travel offerings after its relationship with Air Canada changes in mid-2020.
"We need to be realistic around the speed that we can move with potential partners in the context where our current agreement is still in place for the next two and a half years," Aimia Inc. CEO David Johnston said on a conference call to discuss its third-quarter results.
He said Thursday the company is working with "a high degree of urgency" but won't be rushed to align its airline partnership announcement with Air Canada's release of details about its program launch. Air Canada (TSX:AC) served notice in May that it does not plan to renew its 30-plus year partnership with Aeroplan parent Aimia (TSX:AIM) when the current contract ends.
The airline has invited key financial institutions to participate in bids to join its own loyalty program and expects to issue a request for proposals early next year.
"I'm not linking my timing with Air Canada's timing," Johnston said in an interview. "I'm focusing on the priorities in my business."
Those include getting new airline partnerships, removing costs from the business and improving its cash position.
Aimia (TSX:AIM) has been working to broaden Aeroplan beyond just being a flight provider by adding car rentals partners, hotels and dining. It signed up Avis Car Rental and launched a promotion with Marriott hotels.
"Because we've got very rich transaction data from our members we think there's more we can do in personalization than maybe other people are able to do," Johnston said.
While Aeroplan took an initial "understandable hit" after Air Canada's May announcement, redemption levels are now running at pretty normal levels, he said.
"I'm not going to say it's not a challenge, but what I like is the solid performance in the quarter, I like to see how members are continuing to engage in the program."
A weaker performance in its international operations increased Aimia's net loss for the period ended Sept. 30 to $40.3 million, or 26 cents per share, compared with a loss of $1.5 million, or four cents per share, a year ago.
The results also included a loss of $19.9 million on the disposal of the Canadian Air Miles trademarks, sold to Canada to Diversified Royalty Corp. (TSX:DIV) in August.
They also include a related tax expense of $1.2 million.
Adjusted for one-time items, it earned $17.4 million or 11 cents per share, down from $48 million or 29 cents per share in the prior year.
Revenues fell 10 per cent to $452.1 million while gross billings were down 11 per cent to $497 million.