Air Canada sells 25% stake in Aeroplan for $2.5 billion

Air Canada (TSX: AC) announced a $2.5 billion minority equity investment in Aeroplan Inc., with an investor group led by Blackstone and La Caisse acquiring a combined 25% non-controlling stake in the loyalty program. The transaction values Aeroplan at $10 billion.

The investor group also includes PSP Investments and British Columbia Investment Management Corporation. Air Canada will retain a 75% ownership interest and continue to control Aeroplan's strategy, operations, and day-to-day management. The settlement is planned for August 17, 2026.

Air Canada said proceeds will primarily be used to repay an upcoming US$1.2 billion ($1.7 billion Canadian) bond maturity. Most of the remaining balance will be applied to accelerate share repurchases outlined in its long-term strategic plan.

Separately, Air Canada announced it intends to conduct a substantial issuer bid to purchase for cancellation up to $800 million of its Class A variable voting shares and Class B voting shares via a modified Dutch Auction. The terms and pricing are expected to be set shortly after the Aeroplan transaction settles, with the offer expected to be completed in September 2026. Air Canada said it intends to fund the buyback with proceeds from the Aeroplan investment.

Under the transaction terms, Air Canada holds a call option to repurchase the investor group's interest between the fifth and eighth anniversaries of the settlement, or upon specified events, at a price providing investors an internal rate of return of 6.5% net of distributions.

Aeroplan members, partners, and employees will experience no operational changes as a result of the transaction, according to the company. Air Canada will continue to consolidate Aeroplan in its financial statements, with the minority investment reflected as a non-controlling interest within shareholders' equity.

This announcement is based on a press release issued by Air Canada.

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