Air Canada announces minority equity investment in Aeroplan led by Blackstone, La Caisse

Air Canada has announced that funds managed by Blackstone and La Caisse, together with other leading Canadian institutions, are making a $2.5 billion minority equity investment in Aeroplan Inc.

The transaction terms provide that the investor group is acquiring a 25% non-controlling equity interest in Aeroplan, valuing the program at $10 billion.

Air Canada will maintain full operational control of Aeroplan and a controlling ownership interest after the minority investment.

Aeroplan remains a core part of Air Canada’s commercial strategy and customer value proposition, and the experience of members, partners and employees will be unaffected by the transaction.

Proceeds from this investment will be used toward the repayment of Air Canada’s upcoming US$1.2 billion ($1.7 billion) bond maturity, strengthening Air Canada’s balance sheet through a reduction in gross indebtedness without a corresponding reduction in cash and cash equivalents.

Most of the balance to be applied to accelerate the share repurchases contemplated in its long-term strategic plan.

The investor group led by Blackstone and La Caisse also includes PSP Investments and British Columbia Investment Management Corporation (BCI).

Highlights of the announcement include:

• Blackstone and La Caisse are leading a $2.5 billion, 25% minority equity investment in Aeroplan, valuing the program at $10 billion
• Investor group also includes PSP Investments and British Columbia Investment Management Corporation
• Air Canada retains full control over Aeroplan’s strategy, operations and day-to-day management through its controlling interest
• Aeroplan Members, partners and employees will experience no changes as a result of the transaction
• The transaction supports investment in Air Canada’s strategic plan and long-term growth and underscores the value of Aeroplan’s industry-leading loyalty program.
• Proceeds will be used toward the repayment of upcoming US$1.2 billion bond maturity and accelerate share repurchases, including through a substantial issuer bid for up to $800 million in shares

John Di Bert, Executive Vice President and Chief Financial Officer at Air Canada, said that: “This investment highlights Aeroplan as a differentiated loyalty platform and showcases the exceptional value created since its acquisition. The transaction strengthens Air Canada’s financial position by unlocking value from Aeroplan while retaining full operational control.

Di Bert continued: “It provides additional financial flexibility, and supports our pursuit of an investment grade rating, as we execute our long-term strategic plan, for the benefit of our customers, employees and investors,”.

Craig Landry, Executive Vice President & Chief Innovation Officer at Air Canada, and President of Aeroplan, said that: “Air Canada has established Aeroplan as one of Canada’s leading loyalty programs, with strategic partnerships across travel, financial, and commercial sectors. We are pleased to welcome Blackstone, La Caisse and other leading Canadian institutions as minority investors in Aeroplan as we continue to strengthen and expand Aeroplan’s global appeal.”

Landry said that: “Under the new partnership, Air Canada retains full control of the program, meaning partners, members, and employees can all expect full continuity of the program as they do today. Air Canada is committed to remaining the majority owner of Aeroplan, ensuring continued control of the program while positioning it for future growth and value creation.”

The investor group is making a $2.5 billion minority equity investment in Aeroplan Inc., acquiring a 25% equity interest in it. Air Canada will retain a 75% ownership interest and continue to control Aeroplan and its operations, strategic direction and day-to-day management.

Proceeds from the transaction will primarily allow Air Canada to repay its upcoming US$1.2 billion debt maturity with most of the balance applied to accelerate the share repurchases contemplated in its long-term strategic plan. Settlement of the investment is planned to occur on August 17, 2026.

This investment includes customary minority investor rights. Air Canada will retain control of Aeroplan’s strategy, operations, and day-to-day management. Air Canada will continue to consolidate Aeroplan in its consolidated financial statements and this investment will be reflected as a non-controlling interest within shareholders’ equity.

The investors will be entitled to participate in distributions from Aeroplan, as and when declared by its board of directors, pursuant to an agreed distribution policy.

Air Canada will also have the right to repurchase the interest held by the investor group in Aeroplan between the fifth and eighth anniversaries of the transaction’s settlement, as well as upon the occurrence of specified events. The repurchase price will be determined pursuant to an agreed formula that provides the investors with an internal rate of return of 6.5% calculated net of all distributions.