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Mar 19, 2018

Aimia surges as it signals strategy shift with Amazon partnership

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MONTREAL -- Aeroplan parent company Aimia Inc. (AIM.TO) signalled its future strategy by announcing a partnership with online giant Amazon, that will offer members rewards for everyday shopping with the world's largest retailer.

"This is very much in line with where you will see us heading, which is focused on everyday earn," said Matt Hall, vice-president Aeroplan partnerships.

Amazon (AMZN.O) is a natural fit because of Amazon's online presence and brand awareness among Canadians, he said in an interview.

"With Amazon we'll now have the four biggest online retailers in Canada in Amazon, Apple, EBay and Costco."

Aeroplan also has exclusive partnerships like Toyota and Home Hardware for bigger ticket purchases.

Aimia's shares surged after the partnership was announced Monday.

They closed up 25 per cent to $2 on the Toronto Stock Exchange on Monday, paring some of last week's losses after the company announced that members would no longer be able to earn miles at Esso gas stations starting June 1.

While Aeroplan members are more affluent and likely skew older than Amazon shoppers, Hall said they are increasingly changing their shopping habits by purchasing more online.

"We want to make sure our members continue to earn where they shop. So as shopping habits evolve we want to make sure we're part of that story."

Aimia said it is working on a promotion to earn more miles with existing partners and developing a strategy for how the program will change once the long-term partnership with Air Canada ends in 2020.

That includes moving to a model that is less reliant on exclusive contracts and more travel- and experience-centric.

The Amazon deal may offset some of the concerns about Aimia following the loss of the 14-year partnership with Imperial Oil Ltd. But Hall said you can't directly compare the two retail industries.

Retail partnerships allow members to earn miles every day and help them amass rewards quicker, but they are not as important financially for Aeroplan compared to its financial partners and Air Canada, he said.

Aeroplan members will be able to earn points on most of their purchases on beginning April 24.

The loyalty rewards program says members who visit through the Aeroplan website will be able to earn at least one Aeroplan mile for every $1 dollar spent.

Members with silver and black status will earn up to twice the miles and those with diamond status will receive up to triple the miles per transaction. Those using Aeroplan-affiliated credit cards will earn miles twice on purchases from

Loblaw Companies Ltd. (L.TO) and Imperial Oil Ltd. (IMO.TO) announced a deal on March 13 that will allow PC Optimum members to earn points at more than 1,800 Esso gas stations.

Aimia has been working to prepare for the end of its agreement with Air Canada (AC.TO).

The airline served notice last year that it does not plan to renew its 30-plus year partnership when the current contract ends in 2020.