(MONTREAL, CANADA) – Air Canada shares rose sharply on Wednesday after the country’s largest airline agreed to sell a 25% stake in its Aeroplan loyalty programme to Blackstone and a group of Canadian pension funds for C$2.5 billion, giving the carrier a major cash injection as high fuel costs are expected to reduce its earnings this year.
The shares rose as much as 15% after markets opened before easing to a gain of about 10% following the announcement late on Tuesday. The transaction values the 25% Aeroplan stake at about US$1.81 billion or £1.34 billion, based on indicative exchange rates around 12 August 2026.
The sale provides Air Canada with additional funds at a time when higher fuel prices linked to the conflict in the Middle East are expected to reduce its earnings by about C$500 million this year. That amount is about US$362 million or £268 million at current indicative rates.
The investor group is led by Blackstone and the Caisse de dépôt et placement du Québec. The Public Sector Pension Investment Board and British Columbia Investment Management Corp. are also among the investors.
Air Canada will retain full control of Aeroplan’s day to day operations despite selling the minority stake. The airline will continue to operate the loyalty programme while sharing ownership of the business with the new investors.
Air Canada plans to use the proceeds from the transaction for two main purposes. It will repay C$1.7 billion of bonds, equivalent to about US$1.23 billion or £912 million, and plans to buy back up to C$800 million of its own shares in September. The planned buyback is worth about US$579 million or £429 million.
The combination of debt repayment and the proposed share buyback would allow Air Canada to reduce part of its financial obligations while returning some capital to shareholders.
The transaction is scheduled to close on Monday.
Aeroplan is a major loyalty business for Air Canada, linking the airline with customers and commercial partners through its travel rewards programme. The partial sale gives the airline access to capital from outside investors while allowing it to retain operational control of the programme.
For Air Canada, the transaction also provides financial flexibility as the airline deals with higher operating costs. Fuel prices have risen as instability in the Middle East has affected energy markets, adding pressure to airline earnings.
The transaction comes as airlines continue to balance high operating costs with demand for air travel and the need to invest in aircraft, airport operations and customer services. Air Canada is using the Aeroplan deal to strengthen its balance sheet while also funding a planned return of capital to shareholders.
The sale is expected to give investors a clearer financial value for a significant part of Air Canada’s loyalty business. It also leaves the airline with a 75% interest in Aeroplan and control of its daily operations after the transaction closes.
Air Canada’s strong share price reaction shows that investors are placing significant value on the immediate cash proceeds from the Aeroplan transaction, particularly as fuel costs remain a major pressure on the airline’s financial outlook.
*Currency conversions are approximate and based on indicative market rates around 12 August 2026. Exchange rates fluctuate during the trading day. Recent market data put the Canadian dollar around C$1.40 per US$1, while sterling was trading near US$1.35 per £1. *