Air Canada unlocks $2.5B from Aeroplan in minority stake deal

Air Canada is officially unlocking $2.5 billion in value from Aeroplan through a minority equity investment involving Blackstone, La Caisse and other major Canadian institutions, while maintaining control of its loyalty program.

The airline announced late Tuesday (Aug. 11) that the investor group will acquire a 25 per cent non-controlling equity interest in Aeroplan Inc., valuing the program at $10 billion.

Air Canada will retain a 75 per cent ownership interest and full operational control of Aeroplan, including its strategic direction and day-to-day management.

The airline said Aeroplan remains a core part of its commercial strategy and customer value proposition, with the transaction expected to have no impact on members, partners or employees.

“This investment highlights Aeroplan as a differentiated loyalty platform and showcases the exceptional value created since its acquisition. The transaction strengthens Air Canada’s financial position by unlocking value from Aeroplan while retaining full operational control. It provides additional financial flexibility, and supports our pursuit of an investment grade rating, as we execute our long-term strategic plan, for the benefit of our customers, employees and investors,” said John Di Bert, executive vice president and chief financial officer at Air Canada, in a press release.

Paying down debt, buying back shares

Air Canada plans to use proceeds from the investment to repay an upcoming US$1.2 billion ($1.7 billion) debt maturity with most of the balance applied to accelerate the share repurchases contemplated in its long-term strategic plan, reads a press release. 

Most of the remaining proceeds will be used to accelerate share repurchases contemplated under Air Canada’s long-term strategic plan.

The airline separately announced plans to conduct a substantial issuer bid to purchase for cancellation up to $800 million of its Class A variable voting shares and Class B voting shares.

The proposed offer is expected to be funded with proceeds from the Aeroplan investment.

Terms and pricing are expected to be determined shortly after the planned settlement of the Aeroplan transaction on Aug. 17, 2026, with the share buyback expected to be completed in September.

The proposed offer will proceed through a modified Dutch Auction, allowing shareholders to tender shares either at a specified price within a range established by Air Canada or at the eventual purchase price determined through the auction process.

Aeroplan remains under Air Canada control

The investor group is led by Blackstone and La Caisse and also includes PSP Investments and British Columbia Investment Management Corporation (BCI).

Air Canada stressed that despite bringing in outside investors, it will remain Aeroplan’s majority owner and retain control over the program.

“Air Canada has established Aeroplan as one of Canada’s leading loyalty programs, with strategic partnerships across travel, financial, and commercial sectors. We are pleased to welcome Blackstone, La Caisse and other leading Canadian institutions as minority investors in Aeroplan as we continue to strengthen and expand Aeroplan’s global appeal. Under the new partnership, Air Canada retains full control of the program, meaning partners, members, and employees can all expect full continuity of the program as they do today. Air Canada is committed to remaining the majority owner of Aeroplan, ensuring continued control of the program while positioning it for future growth and value creation,” said Craig Landry, executive vice president & chief innovation officer at Air Canada, and president of Aeroplan, in a statement. 

The investment includes customary minority investor rights, while Air Canada will continue to consolidate Aeroplan in its financial statements.

The investment will be reflected as a non-controlling interest within shareholders’ equity.

Investors will also be entitled to participate in Aeroplan distributions when declared by its board under an agreed distribution policy.

Air Canada will have the right to repurchase the investor group’s stake between the fifth and eighth anniversaries of the transaction’s settlement, as well as under certain specified circumstances.

The repurchase price will be determined using an agreed formula providing investors with an internal rate of return of 6.5 per cent, calculated net of all distributions.

Investors eye Aeroplan’s growth

Mark Rutledge, senior managing director at Blackstone, pointed to Aeroplan’s position in the Canadian loyalty market and Blackstone’s long-standing investment activity in Canada.

"We are proud to support Air Canada and the leading loyalty platform they’ve built in Aeroplan,” stated Rutledge. “Blackstone is a long-term believer in Canada as both a compelling place to invest and serve clients. This transaction adds to our decades-long commitment to the country and is another example of our ability to provide flexible, efficient capital solutions to leading businesses around the world."

La Caisse also characterized the deal as an opportunity to diversify its global portfolio.

“This investment in Aeroplan, one of the country’s leading loyalty programs built by Air Canada, reflects La Caisse's ability to structure tailored capital solutions backed by a strategic asset, alongside a strong group of co-investors," said Martin Longchamps, executive vice-president and head of private equity and private credit at La Caisse, in a statement. 

"It is also an attractive diversification opportunity for our global portfolio, which ultimately benefits our depositors.”

Settlement of the $2.5-billion Aeroplan investment is planned for Aug. 17, 2026.

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