Air Canada Airbus A321XLR. Photo: Air Canada Air Canada is unlocking billions of dollars in value from its Aeroplan loyalty program after announcing a $2.5 billion minority investment from a group of major institutional investors led by Blackstone and La Caisse.
The transaction gives the investor group a 25% non-controlling stake in Aeroplan, valuing the loyalty program at $10 billion. Air Canada will retain the remaining 75% and, importantly for members and partners, will continue to have full operational control over Aeroplan.
The investor group also includes PSP Investments and British Columbia Investment Management Corporation (BCI).
Air Canada said the transaction will not change how Aeroplan operates for its members, partners or employees. The airline will continue to control the program's strategy, operations and day-to-day management.
The investment is expected to strengthen Air Canada's balance sheet. The airline plans to use the proceeds primarily to repay an upcoming US$1.2 billion ($1.7 billion) bond maturity.
Most of the remaining proceeds will be used to accelerate share repurchases under Air Canada's existing long-term strategic plan.
The transaction is scheduled to settle on August 17, 2026.
Air Canada said the deal allows it to unlock value from Aeroplan without giving up control of one of its most important commercial assets. The airline also said the additional financial flexibility supports its goal of pursuing an investment-grade credit rating.
The deal puts Aeroplan's total value at $10 billion, highlighting the growing financial importance of airline loyalty programs beyond their traditional role as customer rewards schemes.
Air Canada acquired Aeroplan's operating business in 2018 after the loyalty program had previously been spun out. Since then, the airline has expanded its partnerships across travel, financial services and other commercial sectors.
Craig Landry, Air Canada's executive vice president and chief innovation officer and president of Aeroplan, said the airline remains committed to being the program's majority owner while continuing to expand its global appeal.
Under the agreement, the institutional investors will have customary minority investor rights and will participate in distributions from Aeroplan when declared by its board.
Air Canada will also have an option to repurchase the investors' stake between the fifth and eighth anniversaries of the transaction, as well as following certain specified events. The repurchase price will be determined according to an agreed formula.
Alongside the Aeroplan deal, Air Canada announced plans for a substantial issuer bid of up to $800 million to buy back and cancel its Class A variable voting and Class B voting shares.
The proposed share repurchase is expected to be launched after the Aeroplan transaction closes, with completion targeted for September 2026.
The buyback would use proceeds from the Aeroplan investment and is expected to take the form of a modified Dutch auction. Shareholders would be able to tender shares either at a specified price within the range set by Air Canada or through a purchase-price tender.
The proposed offer has not yet commenced. Air Canada said the formal terms will be provided through an issuer bid circular filed with Canadian securities regulators.
For Aeroplan members, however, the immediate message is one of continuity: Air Canada is selling a minority financial interest in the loyalty program, not giving up control of it.