Air Canada sells 25% of Aeroplan to Blackstone for $2.5 billion: what changes (and what doesn’t) for you

In brief

• $2.5 billion for 25% of Aeroplan, valuing the program at $10 billion in total
• Investors: Blackstone and the Caisse de dépôt et placement du Quebec (co-leads), alongside PSP Investments and the British Columbia Investment Management Corporation (BCI)
• Air Canada retains 75% and full operational, strategic, and day-to-day control of the program
• The proceeds will first be used to repay about US$1.2 billion of bond debt coming due soon, then to accelerate a share buyback of up to $800 million (launch planned for September 2026)
• Investor returns are structured to deliver an internal rate of return (IRR) of 6.5% if Air Canada exercises its buyback right, net of all distributions
• Air Canada holds a buyback right on the stake sold, exercisable between the 5^th and 8^th year following closing
• Closing expected on August 17, 2026
• Aeroplan has more than 10 million active members worldwide, bringing the $10 billion valuation to roughly $1,000 per member

Main source: Air Canada’s official press release dated August 11, 2026, corroborated by Blackstone’s release and reported by TravelPress.

What changes for members

The short answer: nothing, for now. Air Canada retains 75% of the shares and full control over operational decisions, including the points structure, earn rates, fees, and member benefits. No program changes were announced with this transaction.

Craig Landry, Air Canada’s Executive Vice President and Chief Innovation Officer, and also Aeroplan’s President, emphasized this point in the official press release: under this new partnership, Air Canada retains full control of the program, ensuring complete continuity for partners, members, and employees, as is the case today. He was even more direct with analysts on Wednesday, stating that there will be no change to how members earn or redeem their points, nor to any other element of the program as a result of this transaction, according to BNN Bloomberg.

For holders of Aeroplan co-branded credit cards (TD, CIBC, American Express), nothing changes in the short term either. The commercial agreements between Air Canada and the issuers are not affected by this minority equity transaction.

The program is also continuing to operate normally during the transaction: Aeroplan launched a bonus promotion on Air Canada flights in the very week of the announcement.

Why Air Canada is acting now

Three financial reasons explain the timing. First, deleveraging: Air Canada is still carrying some of the debt taken on during the pandemic, including a bond maturity of about US$1.2 billion coming due soon. This transaction allows it to be repaid without affecting the airline’s operating balance sheet.

Second, capital to buy back shares. Once the debt is repaid, the remainder of the $2.5 billion will fund a share repurchase program of up to $800 million, via a modified Dutch auction, with a launch planned for September 2026. It is a direct way to return value to Air Canada shareholders without drawing on cash generated by air transport operations.

Finally, it monetizes a valuable asset without giving up control. A $10 billion valuation for Aeroplan exceeds Air Canada’s own total market capitalization by about $2.4 billion, illustrating how the loyalty program has, over time, become more profitable and more predictable than passenger transport. Selling 25% extracts capital immediately, while keeping the remaining 75% and full control.

The context of Q2 2026 also helps explain the decision. Air Canada reported record operating revenues of $6.266 billion, but a net loss of $178 million, weighed down by a fuel bill up 49% year over year. The airline even lowered its adjusted EBITDA guidance to $2.9–$3.2 billion for the year and revised expected free cash flow to $200–$500 million, down from $400–800 million previously. With $12.794 billion in long-term debt and lease liabilities at the end of June, selling a slice of Aeroplan becomes a markedly more affordable source of capital than new borrowing, according to Canadian Travel News and The Globe and Mail.

The market reacted very positively: Air Canada’s stock jumped 15% at Wednesday’s open before settling around +10%, at about $30 per share, its highest level since early 2020, according to BNN Bloomberg.

A move already seen in 2005

What makes this transaction particularly ironic is that a nearly identical move already exists in Aeroplan’s history, 21 years ago—and it ended badly. The nuance: the decision at the time belonged to ACE Aviation Holdings, the holding company created from Air Canada’s 2004 restructuring, not Air Canada itself.

The first act of this story looks strikingly like the last. In 2005, ACE Aviation Holdings already sold a minority slice of Aeroplan to external investors while keeping the rest—a mechanism similar to today’s. The difference is that, back then, that first minority sale ultimately led to a full exit three years later, when ACE sold its remaining stake. The program then slipped out of Air Canada’s hands for more than a decade, once it was under Aimia’s control.

The 2019 buyback price illustrates the cost of that hard-learned lesson. Air Canada announced the acquisition in November 2018 for $450 million in cash, on a cash- and debt-free basis, plus the assumption of about $1.9 billion in liabilities related to outstanding miles, $50 million in negative working capital, and about $45 million in pension obligations, according to the « agreement in principle filed at the time. The total value of the acquisition, including liabilities, therefore reached about $2.4 billion. At the closing on January 10, 2019, the gross proceeds paid amounted to about $497 million after initial working-capital adjustments; the final price, after all post-closing adjustments, was set at $516 million.

Seven years later, a 25% slice of the same asset sells on its own for $2.5 billion—five times the cash amount paid in 2019. The multiple narrows when set against the true economic cost of that acquisition, about $2.4 billion including liabilities, but the gap remains real: Air Canada acquired an asset it had significantly undervalued, and this time it structured the sale so as never to relive the 2008 scenario.

A 6.5% IRR: disguised debt?

The most telling detail of the financial structure lies in the buyback formula. It is designed to provide the investor group, led by Blackstone, with an internal rate of return of 6.5% net of all distributions, if Air Canada exercises its buyback right between the 5^th and the 8^th year. In practical terms, that cap only materializes if Air Canada actually buys back the stake; no matter how well Aeroplan performs until then, gains beyond that threshold accrue to Air Canada, not the investors.

It is a structure that caught financial analysts’ attention. Daryl Young of Stifel notes that Air Canada made few, if any, major concessions to the investor group, according to Fortune. In our view, this structure looks more like disguised debt than a true equity stake: Blackstone and the pension funds are not acting as shareholders betting on Aeroplan’s growth; they are lending $2.5 billion at a largely assured return, with the program’s value as collateral rather than a building or an aircraft.

Cameron Doerksen of National Bank neatly summarizes why Air Canada structured the deal this way: the transaction’s implied valuation far exceeds market expectations. He quantified it on the analyst call: the deal values Aeroplan at roughly 21 times trailing twelve-month EBITDA, a multiple that underscores how the market views the program as a higher-quality asset than air transport. In other words, Air Canada gets the benefits of borrowing (fast capital, without meaningful dilution of control) while accounting for it as equity rather than debt on the balance sheet—a non-trivial advantage for accounting treatment and credit ratings.

How this compares elsewhere in the industry

Using a loyalty program as a financial lever is nothing new. During the pandemic, several major U.S. carriers pledged their program as collateral to raise emergency liquidity, but in the form of pure debt rather than capped equity.

United’s financing, structured by Kirkland & Ellis, combined $3.8 billion in bonds and $3 billion in term loans secured by future revenues from MileagePlus. Delta, for its part, announced in an official press release an increase in its SkyMiles financing to $9 billion, split between bonds and a term loan.

The difference with Air Canada is structural. United and Delta borrowed against their program without ever selling any portion of it, which remains classic debt recorded as such on the balance sheet. Air Canada, by contrast, is selling an equity slice to external investors, with a return cap that makes it resemble financing, without carrying the label. Two different ways of reaching the same conclusion: on paper, the loyalty program is worth more than the airline that created it.

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