Aimia, TD, CIBC reach compromise on Aeroplan cardholders

TD Bank Group, Canadian Imperial Bank of Commerce (CIBC) and Aimia Inc. have settled on a compromise covering the Aeroplan loyalty credit cards that handle billions of dollars worth of transactions annually. As a result of the agreement, each bank will have rights to half the portfolio of accounts that offer their customers loyalty points […]

TD Bank Group, Canadian Imperial Bank of Commerce (CIBC) and Aimia Inc. have settled on a compromise covering the Aeroplan loyalty credit cards that handle billions of dollars worth of transactions annually.

As a result of the agreement, each bank will have rights to half the portfolio of accounts that offer their customers loyalty points that can be exchanged for airline tickets and other goods through Aimia’s flagship Aeroplan program.

“I think you’ll agree that this is really a very strong outcome for all parties concerned,” Rupert Duchesne, group chief executive for Aimia, told analysts after the announcement.

“Being with two leading credit card providers, and what that will do to drive immediate growth for us, is very encouraging. It will also take out any uncertainty for credit card holders.”

He said every Aeroplan credit card holder will carry on earning miles seamlessly for the rest of this year and through next year.

“And that is a great asset of this deal,” Duchesne said.

TD said it expects to acquire approximately 550,000 cardholder accounts from CIBC, representing approximately $3 billion in card balances and $20 billion in annual retail spending.

CIBC will retain the half of the portfolio that includes Aerogold customers with broader relationships with the bank, which has been the primary Aeroplan credit card issuer for more than 20 years.

The three companies have been in negotiations for weeks, following Aimia’s decision to pick TD as the primary issuer of Aeroplan Visa credit cards for a 10-year term, starting Jan. 1, 2014.

CIBC objected to the decision and the three parties agreed to seek a compromise agreement.

Aimia says about $312.5 million will be paid to CIBC for the shift of half its Aeroplan cards portfolio to TD, with Aimia funding about $150 million of the payments.

TD will pay $162.5 million, including $50 million when the deal closes. The rest will be paid over three years – about $37.5 million annually.

CIBC says it also plans to introduce an enhanced travel loyalty rewards card.

Brands Articles

Whole Foods exec: No tattoo shops planned for new chain yet

Company says partner vendors in small format chain will be diverse

Leon’s reinvents itself for generation Instagram

The retailer is re-upholstering its brand for millennial shoppers

Ads You Must See: Visions of the future

Two very different ideas of a future shaped by today's youth

Canada Beef brand refresh links farmers to good ethics

Refreshed logo, a new tagline and a video aim to connect with consumers

On The Move: Changes at Loopmedia, 6S, Climax Media

A weekly update of who's headed where in Canadian marketing and communications

Facebook Canada opens new HQ’s doors to non-profits

Heart & Stroke and others share how they're using social in marketing

It’s hard to say ‘Goodbye’ in new Fallsview campaign

First of four commercials planned for 2016 features a humorous twist on a familiar trope

Taco Bell hunts for a Snapchat host

The QSR is building its Snapchat presence with weekly fan-created stories

Frank & Oak takes its storytelling to new heights

Menswear retailer partners with Toronto photographer on its latest campaign