BMO Financial Group has reached an agreement to acquire the Air Miles rewards program from LoyaltyOne Co., which has filed for bankruptcy protection.
The transaction will not affect the program’s 10 million customers’ points balances or their ability to use their miles to purchase items, according to Air Miles president Shawn Stewart.
The deal has been necessitated by LoyaltyOne’s US parent company’s creditor protection filings in the US and Canada, which show it has assets of roughly $10 million against liabilities of up to $1 billion.
Air Miles, once a major player in the loyalty program space, has seen its popularity decline in recent years as more retail partners have left.
Last year, Empire Company, which owns the Sobey’s and Safeway grocery chains, joined the Scene+ rewards program, founded by Scotiabank and Cineplex, which dealt a significant blow to Air Miles.
Patrick Sojka, the founder of loyalty program portal Rewards Canada, believes that Air Miles has been struggling for some time, losing partners such as Staples, Old Navy, Rona, and Lowe’s.
While Bank of Montreal has described the deal as an opportunity to reinvigorate one of Canada’s largest loyalty programs, another bidder may emerge during LoyaltyOne’s sale process under Chapter 11 of the US Bankruptcy Code and the Company Creditors’ Arrangement Act in Canada.
However, Sojka believes that this is unlikely, as there are no significant partners left in the program aside from Bank of Montreal itself, and without additional revenue options, the sale to BMO is unsurprising.
↯↯↯Read More On The Topic On TDPel Media ↯↯↯