BMO agrees to buy Air Miles loyalty program

BMO Financial Group has signed a deal to acquire the Air Miles rewards program from LoyaltyOne Co., which has gone into bankruptcy protection.

Bank was already loyalty program's biggest single partner

A close-up of a loonie dollar coin on an Air Miles card, placed on top of a BMO card.
Air Miles and BMO cards are displayed Friday in Mississauga, Ont. BMO Financial Group announced a deal Friday to acquire the Air Miles loyalty rewards program from LoyaltyOne Co. (Nathan Denette/The Canadian Press)

The latest:

  • BMO Financial Group aiming to buy Air Miles.
  • U.S. parent company of Air Miles seeking protection from creditors.
  • The deal won't impact customers' points balances.

BMO Financial Group has signed a deal to acquire the Air Miles rewards program from LoyaltyOne Co., which has gone into bankruptcy protection.

In a media release, Air Miles president Shawn Stewart says the deal will have no impact on the points balances of the program's 10 million customers, or on their ability to use their miles to pay for items.

BMO, a founding partner of Air Miles since 1992, said the proposed $160-million US deal would accelerate the loyalty program's future growth.

"If our acquisition of the Air Miles business is successful, we will bring the ownership of Air Miles home to Canada and strengthen its offering for Canadian consumers and businesses together," Ernie Johannson, BMO's group head of North American personal and business banking, said in a statement.

The bank is approaching Air Miles with a "long-term perspective, not a short-term tactical" approach that a holding company based in another country might take, she said.

With a holding company "there isn't necessarily the same belief in the program," said Johannson, who by chance started her career 30 years ago with Air Miles. "We want to run it like an entity and be able to fund it, grow it and inspire it."

Parent company seeking protection

The transaction is happening because Air Miles' U.S. parent company, LoyaltyVentures, is seeking court protection from its creditors in the U.S. and Canada.

In U.S. court filings, LoyaltyVentures says it has assets of about $10 million, against liabilities of up to $1 billion. At the end of 2021, the company's shares were worth more than $700 million US, but by the end of its most recently completed quarter, that had fallen to just $29 million.

As part of the bankruptcy proceedings, Loyalty's shares on the Nasdaq that currently trade under the LYLT symbol will be delisted.

Air Miles was once one of the biggest names in the loyalty space, but the company has seen its popularity slowly erode in recent years.

The company's problems first started in 2016, when it ostracized members by announcing that unused points would expire. That was wildly unpopular with members who had diligently saved their points for years, and led to a rush of people cashing in points for merchandise for fear of losing them for nothing. Then the company reversed that decision, which led to more upset.

An Air Miles loyalty program logo is shown
Air Miles was once one of the most popular loyalty programs in Canada, but has slowly lost market share over the years. (Air Miles)

Like many loyalty programs, it also devalued the value of its points by requiring more of them to buy anything.

Since then, more and more retail partners have abandoned the program, further eroding its value in the minds of many consumers.

The most recent major blow to Air Miles came last year when Empire Company, which owns the Sobey's and Safeway grocery chains, joined the Scene+ rewards program, founded by Scotiabank and Cineplex.

Patrick Sojka, the founder of loyalty program portal Rewards Canada, says Air Miles has been in trouble for a while now.

"They've lost partners left, right and centre, not just the Sobey's group ... they lost Staples, they lost Old Navy, they lost Rona, Lowe's," he told CBC News in an interview.

While Bank of Montreal is calling the deal a "made-in-Canada opportunity to enable a reinvigoration for one of Canada's largest loyalty programs," there is a chance that another suitor could emerge for Air Miles.

As part of the insolvency proceedings under Chapter 11 of the U.S. Bankruptcy Code and the Company Creditors' Arrangement Act in Canada, LoyaltyOne will undergo a sale process, one that could see a buyer other than BMO emerge with a better offer.

But Sojka says that's unlikely. "There's no big partners outside of Bank of Montreal itself left in that program. And so without a lot of options for additional revenue ... it's less and less surprising that this is happening."


Pete Evans

Senior Business Writer

Pete Evans is the senior business writer for Prior to coming to the CBC, his work has appeared in the Globe & Mail, the Financial Post, the Toronto Star, and Canadian Business Magazine. Twitter: @p_evans Email:

With files from the CBC's Meegan Read and The Canadian Press

Add some “good” to your morning and evening.

A variety of newsletters you'll love, delivered straight to you.

Sign up now


To encourage thoughtful and respectful conversations, first and last names will appear with each submission to CBC/Radio-Canada's online communities (except in children and youth-oriented communities). Pseudonyms will no longer be permitted.

By submitting a comment, you accept that CBC has the right to reproduce and publish that comment in whole or in part, in any manner CBC chooses. Please note that CBC does not endorse the opinions expressed in comments. Comments on this story are moderated according to our Submission Guidelines. Comments are welcome while open. We reserve the right to close comments at any time.

Become a CBC Account Holder

Join the conversation  Create account

Already have an account?