Air Canada announced that funds managed by Blackstone and La Caisse, alongside PSP Investments and British Columbia Investment Management Corporation, will invest $2.5 billion for a 25% non-controlling interest in Aeroplan, putting the latter’s valuation at $10 billion.
The carrier said it will retain the remaining 75% and says it will continue controlling Aeroplan’s strategy, operations, and day-to-day management.
“Partners, members, and employees can all expect full continuity of the program as they do today,” Aeroplan President Craig Landry said in announcing the transaction.
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The investors will be entitled to Aeroplan distributions under an agreed policy. Air Canada also receives an option to repurchase their stake between the fifth and eighth anniversaries of closing. The formula for that repurchase is designed to provide the investor group with a 6.5% internal rate of return, net of distributions received.
The deal nevertheless puts a financial return requirement around a loyalty business that Air Canada describes as central to its relationship with customers.
Most of the immediate financial benefits sit with the airline. Air Canada plans to use proceeds to repay an upcoming US$1.2 billion bond maturity, equivalent to about $1.7 billion at the exchange rate used in its announcement.
Most of the remaining money is expected to finance accelerated share repurchases, including a substantial issuer bid for up to $800 million of Air Canada stock.
The Aeroplan investment is scheduled to settle August 17, with the buyback expected to launch afterward and conclude in September.
Air Canada shares were up about 10% in midday trading Wednesday, according to Reuters. Fitch Ratings also changed its outlook on Air Canada to positive from stable while affirming its BB issuer rating, citing the Aeroplan transaction and planned debt reduction.
The cash arrives as the carrier restored its 2026 adjusted EBITDA guidance at $2.9 billion to $3.2 billion, below its previous $3.35 billion to $3.75 billion forecast. Expected free cash flow was also cut to between $200 million and $500 million from $400 million to $800 million as fuel costs remain elevated.
For members, the ownership transaction follows a significant redesign that was already underway. Since January 1, Aeroplan points earned on Air Canada flights have been tied to eligible dollars spent rather than distance flown. Members without status earn one point per dollar, while Elite members can earn additional multipliers.
