Following hot on the heels of yesterday’s revelation that Air Miles’s parent company Loyalty Ventures is set to file for bankruptcy protection, BMO has now announced a deal to acquire the Air Miles loyalty program from Loyalty Ventures.
The two entities have signed a purchase agreement for Canada’s largest loyalty program, although the deal is subject to court approval and the completion of regulatory processes.
Let’s talk about what this all means.
BMO to Acquire Air Miles
BMO was the founding financial partner of Air Miles upon the program’s launch in 1992, and has stuck by Air Miles’s side through thick and thin even as the loyalty program has hemorrhaged partnerships left and right in recent years.
With Air Miles’s parent company, Loyalty Ventures, facing an uncertain financial future, BMO would’ve very much been a sensible option as a potential suitor to step in and rescue the Air Miles loyalty business by acquiring it at a discount.
BMO’s acquisition of Air Miles goes a long way towards safeguarding the Air Miles balances that collectors have worked hard to earn over the years.
With this deal in place, Air Miles collectors can largely be assured that the loyalty program will remain a going concern, and that they’ll continue to be able to redeem Air Miles as normal for the foreseeable future.
This deal has been agreed as part of Loyalty Ventures’s now-formalized bankruptcy proceedings, which will also involve a solicitation process to solicit any other interest in the Air Miles business by other parties.
While BMO and Air Miles have stricken up a deal as of now, additional interest by other parties could yet provide additional intrigue the coming months.
What Would a BMO-Owned Air Miles Look Like?
BMO’s agreement to acquire Air Miles and thereby safeguard the future of the Air Miles program, including Air Miles collectors’ rewards balances, is no doubt very positive news.
Nevertheless, if this deal were to go through, it’s interesting to ponder what an Air Miles program under BMO’s ownership would look like in the future, and whether BMO would truly be able to reverse the downward spiral that has beleaguered Air Miles in recent times.
On one hand, BMO’s acquisition of Air Miles represents the further solidification of a union between what’s quite possibly two of the weakest links in Canada’s banking and loyalty industries.
Indeed, BMO’s historical ties with Air Miles has been widely considered a weakness compared to its Big 5 bank rivals’ more robust loyalty partnerships, and BMO itself hasn’t exactly shown a strong track record in fostering strong loyalty with its BMO Rewards offering.
On the other hand, BMO certainly stands to unlock plenty of synergies by bringing Air Miles in-house, bearing in mind that the program already plays a key role in the bank’s existing credit card lineup.
Going forward, BMO would have a great opportunity to leverage Air Miles’s powerful brand recognition and compete more aggressively in the loyalty space, perhaps even merging BMO Rewards into a brand-new reimagined edition of Air Miles.
Should the union be formalized, BMO and Air Miles would represent a fourth major loyalty ecosystem in Canada alongside Scotiabank and Scene+, RBC and Avion Rewards, and TD, CIBC, and American Express and Aeroplan.
More competition is never a bad thing for consumers. In that spirit, perhaps it’s worth looking past BMO and Air Miles’s track record and giving them the benefit of the doubt in terms of the possibility of turning things around.
Conclusion
BMO has announced a deal to acquire Air Miles from Loyalty Ventures as part of the latter’s bankruptcy protection proceedings.
After a brief overnight panic, Air Miles collectors can rest assured that their Air Miles are safe for now, although the deal remains subject to court approval and regulatory processes.
This move represents another dramatic shift in Canada’s loyalty landscape, and there promises to be plenty more movement to come as BMO seeks to complete its acquisition of Air Miles and revitalize the program following a miserable spell.
