Blackstone and Others Invest C$2.5 Billion in Aeroplan

en.Wedoany.com Reported - On August 11, Air Canada announced that a consortium of investors led by Blackstone Group and Caisse de dépôt et placement du Québec (La Caisse) will invest C$2.5 billion in Aeroplan, acquiring a 25% non-controlling stake in the airline's loyalty program, corresponding to an overall valuation of C$10 billion. The consortium also includes the Public Sector Pension Investment Board (PSP Investments) and the British Columbia Investment Management Corporation (BCI).

Upon completion of the transaction, Air Canada will retain the remaining 75% stake in Aeroplan, continuing to control its strategic direction, operations, and day-to-day management, and will consolidate Aeroplan into its financial statements, with the new investors' equity recorded as non-controlling interests within shareholders' equity. The investment is expected to close on August 17, 2026, with no changes to member, partner, or employee arrangements.

Investors may participate in profit distributions approved by Aeroplan's board of directors in accordance with the agreed distribution policy. Air Canada has the right to repurchase the consortium's stake between five and eight years after the closing of the transaction, with the repurchase price determined by an agreed formula, providing investors with a 6.5% internal rate of return after deducting distributions received.

Air Canada plans to use the proceeds from the transaction to repay its upcoming US$1.2 billion (approximately C$1.7 billion) bond maturity, with most of the remaining funds allocated to accelerating share buybacks. The company intends to repurchase and cancel up to C$800 million of Class A variable voting shares and Class B voting shares through a modified Dutch auction, expected to be completed in September 2026.

Aeroplan has over 10 million active members worldwide, with a points network covering more than 50 airlines and over 1,300 destinations, and connects to consumer scenarios such as hotels, car rentals, merchandise, and gift cards. This equity transaction introduces long-term capital at a C$10 billion valuation while preserving the airline's control over member data, partner networks, and program operations.

As of June 30, 2026, Air Canada's total long-term debt and lease liabilities stood at C$12.794 billion, with net debt of C$5.270 billion and a net leverage ratio of 1.7 times. The company reported operating revenue of C$6.266 billion for the second quarter of 2026, with adjusted EBITDA of C$719 million and free cash flow of C$174 million.