TD, CIBC could both win pieces of Aeroplan credit card business: Aimia CEO

It’s possible that both TD and CIBC will be offering cards with Aeroplan rewards points starting next year if the two banks can come up with an agreement during talks, Aimia CEO Rupert Duchesne told analysts Tuesday.

Duchesne, who heads the company that operates the Aeroplan points system, declined to speculate on what agreement may be reached but said having both banks offering Aeroplan cards “would be an elegant solution that would be a win-win-win for us, TD, and CIBC.”

Montreal-based Aimia, which began as division within Air Canada that managed frequent fliers points, has since expanded to handle Aeroplan and other customer loyalty programs in various industries in several countries.

CIBC (TSX:CM) has partnered with Aeroplan for more than 20 years but that relationship is in flux as its current 10-year term agreement with Aimia comes to a close at the end of 2013.

CIBC has declined to match an offer from rival TD Bank (TSX:TD) but it has proposed that it should keep about half of the current Aerogold portfolio cards and sell the remainder to TD bank.

The three parties said Monday that they were working towards an agreement by Aug. 26. However, if there’s no compromise, Aimia has said it will go ahead with the TD plan.

After markets closed Monday, Aimia announced a second-quarter net loss of $415.2 million or $2.43 per share, compared to $35 million or 19 cents per share a year ago.

The company said the loss was due to non-cash items related to changes in the Aeroplan program, which produced a $663.6 million hit to revenue and a related income tax recovery of $180 million during the second quarter..

Excluding the change in Aeroplan and several other items, Aimia’s revenue for the quarter was $540.3 million, up from $7.1 million a year ago.

On the Toronto Stock Exchange, Aimia’s shares closed up more than four per cent, gaining 63 cents to $15.93 in Monday trading. CIBC shares were up $1.56 to $78.47 while TD stock lost 25 cents to $86.41.