Aimia in talks with new Aeroplan partners as it braces for Air Canada's departure
CEO doesn't provide details of plans for replacing Air Canada
Loyalty program operator Aimia Inc. swung to a loss of $25.1 million in its latest quarter as it said it's in talks with a number of potential partners to replace its departing Aeroplan partner Air Canada.
CEO David Johnston wouldn't provide details of the Montreal-based company's plans for replacing Air Canada on a conference call with analysts Thursday, but said to "expect a re-invented program which will continue to be multi-airline."
Johnston and departing chief financial officer Tor Lonnum said during the call that Aimia's diversified customer base and cash resources are giving management time to cut costs, simplify the business and find new offerings for card holders.
Still, Johnston said Aeroplan customers mainly use their points for travel, and that's likely to continue both before and after 2020 when Air Canada will begin to operate its own points program.
By the end of 2019, Aimia said it expects to reduce annualized costs by $70 million, in part by cutting its workforce by 10 per cent this year.
The company said its loss amounted to 19 cents per share for the quarter ending June 30, compared with net earnings of $7.2 million or two cents per share for the same period last year.
Aimia's shares are worth less than one-quarter what they were before Air Canada's announcement on May 1. On Thursday, the stock closed up 32 cents, or 20 per cent, at $1.91.
The company said that while Aeroplan activity was up in its latest quarter, there's been no material change in redemption trends following elevated levels in May.
Aimia also said it has maintained its overall 2017 company guidance.