Air Canada shares surged after the airline announced the sale of a 25% stake in its Aeroplan loyalty program to Blackstone and Canadian pension funds, strengthening its balance sheet with a $2.5 billion cash injection.
Air Canada Shares Rise After Aeroplan Deal
Shares of Air Canada climbed 12% on Wednesday to close at $30.61 on the Toronto Stock Exchange, reaching their highest level since early 2020.
The transaction provides a major financial boost for the Montreal-based airline as it faces pressure from higher jet fuel costs linked to the Middle East conflict, which have reduced earnings by hundreds of millions of dollars.
The buyers of the Aeroplan stake include private equity firm Blackstone, the Caisse de dépôt et placement du Québec, the Public Sector Pension Investment Board and the British Columbia Investment Management Corp.
Air Canada Keeps Control of Aeroplan
Air Canada confirmed that it will retain full control over Aeroplan’s daily operations following the investment.
Outgoing CEO Michael Rousseau reassured customers that the transaction would not affect how members earn or redeem points, or change any other aspects of the loyalty program.
Air Canada originally repurchased Aeroplan in 2019 for less than $500 million. The latest transaction values the program at an implied valuation of approximately $10 billion.
Funds Will Support Balance Sheet
Air Canada plans to use proceeds from the deal to strengthen its financial position, including repaying $1.7 billion in bonds and buying back up to $800 million in shares.
The sale comes after the airline reported a net loss of $178 million in its latest quarter, compared with a profit of $186 million during the same period a year earlier.
Chief financial officer John Di Bert said higher fuel costs created a $500 million to $600 million financial impact in 2026, as many tickets had already been sold before fuel prices increased following the escalation of tensions in the Middle East.
Air Canada Lowers 2026 Outlook
Following the financial impact from higher fuel prices, Air Canada reduced its earnings forecast for 2026.
The airline now expects adjusted earnings between $2.9 billion and $3.2 billion, below its previous forecast of $3.35 billion to $3.75 billion. It also expects slower capacity growth and lower free cash flow compared with earlier projections.
Despite the challenges, Air Canada said demand remains strong across its network, particularly for corporate travel and premium bookings.
Leadership Transition Ahead
The Aeroplan transaction marks one of Michael Rousseau’s final major initiatives before stepping down as CEO at the end of the month.
Incoming CEO Anko van der Werff, currently chief executive of Scandinavian Airlines, will take over after a five-month transition period.
Analysts viewed the Aeroplan deal positively, highlighting that the valuation exceeded previous expectations. The agreement also includes Air Canada’s option to repurchase the minority stake between five and eight years from now, with investors receiving a guaranteed 6.5% return.