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Air Canada, banks make C$2.25 billion bid for Aeroplan loyalty program

Reuters
Air Canada aircrafts are seen at Toronto Pearson International Airport, September 20, 2011. REUTERS/Mark Blinch

(Reuters) - Air Canada (Toronto:AC.TO - News), two Canadian banks and Visa (NYSE:V - News) offered on Wednesday to buy back the Canadian airline's previous Aeroplan frequent flyer program from Aimia Inc (Toronto:AIM.TO - News) for C$2.25 billion ($1.71 billion).

Air Canada, Canada's largest airline, spun off Aeroplan in 2002 to data analytics firm Aimia, and earlier this year said it would launch its own loyalty program.

Air Canada, TD Bank (Toronto:TD.TO - News), Canadian Imperial Bank of Commerce (Toronto:CM.TO - News) and Visa Canada offered Aimia shareholders $3.64 per share for Aeroplan, a premium of 45.6 percent to Aimia stock's Tuesday closing price, Air Canada said in a statement.

Loyalty programs such as Aeroplan are expected to help Canadian airlines expand their revenue streams amid a cut-throat battle for market share.

Aimia has until Aug. 2 to respond to the proposal, Air Canada said.

(Reporting by Laharee Chatterjee in Bengaluru; Editing by Sai Sachin Ravikumar)