A bit of new news from Aimia (Aeroplan) today as they clarify the new credit card agreement with the Canadian banks.
Both CIBC and TD will issue Aeroplan co-branded cards.
Here is the press release (with my comments):
Montreal, Quebec, September 16, 2013 – Aimia confirmed today ten-year financial credit card agreements with each of TD Bank Group (TD) and Canadian Imperial Bank of Commerce (CIBC), effective from January 1, 2014. TD will become Aeroplan’s primary financial services partner and credit card issuer, under an amended version of the agreement announced previously, while CIBC will also continue to be an issuer of Aeroplan credit cards. Aimia also announced entering into a purchase agreement with TD and CIBC, under which TD will acquire approximately half of the current Aeroplan card portfolio and CIBC will retain the balance, comprised of Aeroplan cardholders who have broader banking relationships with CIBC.
Both banks will offer members an enhanced suite of Aeroplan Visa credit cards to include more earning options and benefits than ever, including exclusive Air Canada benefits, in addition to the ground breaking changes to Aeroplan with Distinction benefits to be launched in January 2014 for all Aeroplan members.
On the surface that looks good. Both banks issuing means masses and masses of Aeroplan points to be dished out, and more competition.
Terms of the New Financial Credit Card Agreements
The terms of both the new 10-year financial credit card agreements include:
· a more than 15% increase in price per mile to align to market levels; and
· more comprehensive collaboration around data and customer insight analytics.
As disclosed in June, the TD agreement specifically provides for:
· a $100 million upfront contribution payable by TD to Aimia in 2014 to help fund program enhancements; and
· a joint marketing spend commitment of around $140 million funded by TD and Aimia over 4 years to support new cards and new program features.
The TD minimum miles purchase commitment has been updated to a five-year volume commitment based on miles purchases by TD and CIBC. These payments, in aggregate, could be up to $95 million.
Features of the new credit card offerings to be introduced by the banks during 2014 were announced on June 27, 2013. TD will market its cards through a wide range of TD, Aeroplan and mass market channels, with CIBC using its proprietary channels to market to CIBC customers.
“Partnering with two of Canada’s leading financial institutions will be a market changing outcome for Aeroplan which will strengthen our leadership position,” said Vince Timpano, President and CEO, Canada, Aimia. “As a result of these unique agreements, Aeroplan members have a lot to look forward to in 2014 – not only will we be offering an exciting new suite of credit cards, January also marks the launch of Distinction, our innovative recognition program, and Market Fare Flight Rewards will provide members with even more seats at great value. With these ground breaking changes, Aeroplan will continue to be able to deliver the fastest path to the flights and experiences most valued by premium Canadian consumers.”
Aimia, TD and CIBC are committed to ensuring that members stay informed throughout this process and that any transition will be easy. A tri-party marketing campaign will be launched shortly to provide Aeroplan members and cardholders with the information they need to know for the transition to new cards in 2014.
All I can say is that the transfer in my opinion will be fairly messy since customers will be loyal to a bank and it’ll be interesting to watch the release of new cards.