Your travel points might be worth more than you think. At least, that is what Blackstone is betting.
Blackstone is close to finalizing an agreement to acquire a minority interest in Aeroplan, Air Canada's loyalty program, for roughly $2 billion. The announcement could come as early as this week, with several Canadian investment funds expected to join in alongside Blackstone.
Air Canada is feeling the squeeze from two directions at once. Jet fuel costs have climbed because of the Iran conflict, and flying to the U.S. has dropped due to geopolitical tensions. The airline has tried to offset that by adding routes to Europe and Asia, but the math is still tough.
Here is the number that tells the story: According to Bloomberg Intelligence, the airline will likely show an 85% decline in adjusted net profit compared to last year when it reports earnings on Wednesday. That is a massive hit, and selling a slice of Aeroplan is a way to bring in cash without taking on more debt.
This is not a new trick. During the pandemic, United, Delta, and American Airlines raised more than $25 billion using their loyalty programs as collateral for loans. Points programs are steady, predictable businesses. People keep earning and redeeming miles whether the economy is booming or sputtering, which makes them attractive to investors looking for reliable returns.
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This deal would represent only the second instance in roughly two decades of Air Canada bringing outside money into Aeroplan. The first was during its 2003 bankruptcy restructuring, when the airline needed cash to survive.
Back then, Aeroplan was spun off as its own public company in 2005 and later renamed Aimia Inc. That arrangement fell apart in 2017 when Air Canada ended the contract and launched its own competing program. The market reaction was brutal. Aimia's stock dropped 63% in a single day, and within a year the company sold Aeroplan back to Air Canada for C$450 million, or about $323 million in U.S. dollars, plus assumed debts.
This time around, the deal looks different. Credit card companies like American Express and Toronto-Dominion Bank already compensate Aeroplan for granting their cardholders access to its points. That creates a steady revenue stream. Aeroplan boasts a global membership exceeding 10 million people and provides access to more than 50 partner airlines along with hotel and car rental partners.
Blackstone is not just dabbling in loyalty points. The firm's credit and insurance unit is funding this investment, and it manages $1.3 trillion in assets overall. This deal fits a pattern of big-money moves into infrastructure-style businesses with predictable cash flows.
In July, Blackstone, along with Apollo and KKR, put $5.34 billion into Williams Cos. power plants. Last year, it backed Rogers Communications' wireless infrastructure with a C$7 billion deal, which works out to about $5.02 billion in U.S. dollars. It also gave EQT Corp. $3.5 billion for a non-controlling stake in a new infrastructure joint venture.
The bottom line: Blackstone's chief financial officer, Michael Chae, called these kinds of corporate deals "a really new avenue" for the firm. He also said there is "a substantial opportunity for investment-grade rated corporates where we've become a trusted solutions provider."
For Air Canada, the deal is about survival and strategy. For Blackstone, it is about buying into a business that keeps generating revenue no matter what the economy does. And for you, it is worth paying attention to what happens to your points if a private equity firm starts calling the shots behind the scenes. Loyalty programs change hands, but the value of your miles depends on how the next owner runs the show.
The broader trend is clear: private equity firms increasingly view loyalty programs as prized assets. As more airlines seek liquidity through such sales, travelers should watch how ownership changes affect redemption rates, fee structures, and overall program benefits. The Aeroplan deal could set a precedent for how Canadian loyalty programs are valued and managed in the years ahead.
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