Aeroplan Air Canada Promises New Loyalty Program Will Aid In Helping Increase Share Price
by admin
Aeroplan Air Canada revealed that it plans on launching its own loyalty program in 2020. The carrier hopes this move will help attract more foreign investors and narrow the value gap with its American counterparts. The airline has said that they have already started negotiating with potential credit card partners and expects to release more information by the end of the year. Last year the airline released a statement that stated that they plan on terminating its 30-plus year partnership with Aimia Inc. – operated Aeroplan when the existing contract ends.
1. Risky Investments Or Smart Business Move?
The airlines CEO Calin Rovinescu has said that the entire industry hasn’t completely been compensated because past airline bankruptcies in both United States and Canada have made such investments extremely risky. However, his decision not to renew the contract with Aeroplan has the potential to deliver up to $2.5 billion of value for investors.
The termination of the partnership and a new loyalty program can actually go a long way eliminating the multiple differentials that exist with the carriers in the United States.
2. Why Is There Such A Differential Difference In The U.S & Canada?
This is basically due to the fact that there is a higher cost of business and investments in Canada because of the extra fee and charges that the government enforces on the airlines. In the United States, however, the government does not enforce the same charges on the carriers working from their airports. Hence, in the United States airlines have been making more money and investors are eager to invest because they know they’ll get a good return. In Canada, it is not that easy, but with a smart business decision, it is doable.
Read: Important Facts Worth Knowing Before Buy Airline Miles Account Online
3. Attracting Foreign Investors
Michael Rousseau, the chief financial officer, has added that the share multiple gaps should also be helped because it brings in more investors from Europe, United States, and Asia. As of this moment, 42 percent of its shareholders and potential investors are from outside Canada.
4. Deploying Low-Cost Airplanes
Air Canada is also preparing to release its Rouge low-cost budget carrier in the coming months. Their aim is to deploy the low budget carrier during summer when the tourist season is at an all-time high. Rouge is set to take on it is ultra-low-cost rivals by flying on transcontinental routes to Western Canada. The routes that Rouge will fly on will be from Montreal to Victoria, along with Toronto and Kamloops, B.C. These new flights will start from June, so you should start planning your budget-friendly holiday right now.
The airline has been really working hard and trying to cover all their bases. An example of this can be seen in their preparation to increase capacity if required in their response to a possible strike by pilots from WestJet. Air Canada has said that even though they don’t take pleasure in seeing the current challenges faced by WestJet, their objective is to make the most of a business opportunity.
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