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Aeroplan members have not been bailing out of the program by using up the points they have accumulated – at least, not yet.

Aimia Inc. sees a "huge sense of urgency" in finding new partnerships to strengthen its core loyalty program Aeroplan, following the announcement in May that Air Canada would end its exclusive relationship with that program.

However, Aeroplan members have not been bailing out of the program by using up the points they have accumulated – at least, not yet. While there was a slight bump in redemptions following the news in May, activity has otherwise been relatively stable. That news sent Aimia's shares up roughly 20 per cent on Thursday.

"While we've seen members take a measured approach to the news, and we see relatively stable trends in redemption and accumulation, that in no way is indicating … that we can take time to solve the challenge," chief executive officer David Johnston said on a conference call to discuss the company's second-quarter earnings on Thursday. "We have a huge sense of urgency … we're in conversations with a number of potential partners at this point."

Since May, the stock has declined to under $2 from close to $9. In June, the company suspended dividend payments to shareholders, and announced that three board members had resigned. Aimia will not pay out a dividend for the "foreseeable future," according to a news release on Wednesday. The company is in the midst of an effort to cut $70-million in annualized costs by 2019, and has said it should start to see the impact of those savings by the final quarter of this year. On the call, Mr. Johnston said he recognized that this had been a difficult quarter both for Aimia's employees, and its investors.

"We don't take this lightly," he said.

Aimia reported a net loss of $25.1-million or 19 cents a share in the three months ended June 30, compared to net earnings of $7.2-million or 2 cents in the same period last year.

Revenue was $470.5-million, down 10.4 per cent from the previous year. That revenue decline was largely a result of the company's exit from certain "non-core" businesses such as operations in New Zealand that were sold earlier this year.

The company has been restructuring, selling off some businesses and cutting about one-third of its work force since 2015. A further 10 per cent of its staff will have been cut over the course of this year.

"We may also consider further asset sales as we continue to simplify the business," Mr. Johnston said on Thursday.

People have continued to collect points in Aeroplan: In the company's Americas Coalitions segment (which is mostly Aeroplan,), gross billings from the sale of loyalty-program points rose to $321.7-million this quarter compared with $311.9-million at the same time last year.

"Here's how I think about Aeroplan post-2020: Top line will be supported by a strong brand, long-standing member engagement, good support from retail partners and credit-card partners that run through to 2024," Mr. Johnston said. "Redemption will continue to be multi-airline. Remember also, that our members have significant purchasing power that is attractive to other partners."

Rob's choice of travel reward programs is one that gives cash back, instead of points.

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 28/03/24 4:00pm EDT.

SymbolName% changeLast
AIM-T
Aimia Inc
-1.92%2.56

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