Blackstone Inc. is nearing an agreement to acquire a minority interest in Aeroplan, Air Canada’s frequent-flyer and loyalty business, for roughly $2 billion, according to people familiar with the matter who spoke to media outlets. Those sources said the final announcement could come as early as this week.
Alongside Blackstone, several Canadian investment vehicles are expected to participate in the transaction, the sources added. They asked not to be identified because the discussions remain confidential.
Capital needs tied to fleet plan
Air Canada is actively pursuing additional financing as it executes a multibillion-dollar program to expand and modernize its fleet. The carrier operates a fleet in excess of 300 aircraft today and has a stated expectation of approaching a nearly 400-aircraft fleet by 2030. Funds raised through a transaction involving Aeroplan would form part of the airline’s broader effort to pay for new aircraft deliveries and interior refurbishments on existing jets as it plots new routes.
Management and operational moves
As the airline advances its growth plans it has also made executive changes, recruiting Anko van der Werff from SAS AB to serve as chief executive officer. The management shift accompanies route network adjustments: Air Canada has added services to Europe and Asia in recent months to partly offset a reduction in flights to the United States, a shift the airline attributes to geopolitical tensions.
Headwinds
Like other airlines, Air Canada has contended with a sharp rise in jet fuel costs, which sources link to the Iran war. That surge in fuel prices has been a notable headwind for operations and for the economics of expansion.
The reported transaction would bring private capital into a major travel loyalty program at a time when the carrier is balancing ambitious fleet growth, route development and elevated fuel expenses.