BMO to Acquire Air Miles for $160 Million USD, No Effect on Customers
BMO Financial Group has agreed to purchase Air Miles loyalty program for $160 million USD ($218 million CAD). The loyalty program’s customers will be unaffected by this change and can continue using their Air Miles. The news comes just days after LoyaltyVentures, the parent company of Air Miles, announced that it had entered bankruptcy protection.
Air Miles loyalty program’s US parent company, LoyaltyVentures, recently announced that it had entered bankruptcy protection. BMO Financial Group has been a partner of Air Miles since 1992 and had become its largest single partner. Now, the financial group has agreed to purchase the loyalty program from its Canadian owner, LoyaltyOne Co., for $160 million USD ($218 million CAD).
Through a press release, the President of Air Miles Reward Program, Shawn Stewart, said, “As Air Miles’ longstanding partner, BMO’s acquisition would be a significant step forward in solidifying the future of the Air Miles program.” The program has also assured its over 10 million customers that there will be no change in the program for them. He added, “BMO’s agreement to purchase the Air Miles business has no impact on Air Miles collectors’ Reward Miles balances or on collectors’ ability to collect and redeem Air Miles Reward Miles.”
The popularity of Air Miles has dropped significantly over the years, starting all the way back in 2011 when the loyalty program announced that starting January 1, 2017, all Air Miles will expire after five years. After the initial announcement, customers who feared losing out on their collected points spent those points to make use of them. However, in 2016, the decision of expiration was reversed, and that further outraged the customers.
LoyaltyOne Co., without informing its customers, dropped the value of Air Miles by 20 percent. The retail partners started pulling away from the loyalty program and eventually, the biggest player, Empire Food Company, left the program and joined Scene+ instead. On the day this was announced, LoyaltyVentures’ stock came down to nearly half its value on the NASDAQ and now, the stock will soon be delisted.
BMO Financial Group’s acquisition of Air Miles is an attempt to revitalize the program and BMO says it is in for the long haul, with hopes of accelerating Air Miles’ future growth.
Vineet Washington