UK's Loyalty Management Group Sells out to Canada

04 December 2007

LONDON: UK incentives specialist Loyalty Management Group is to be acquired by Canada's Aeroplan for £350 million ($723.03m; €493.3m).

Montreal-headquartered Aeroplan, Air Canada's spun-off frequent-flier program, is in expansionist mode under ceo Rupert Duchesne, proclaiming its intention to become a global leader in the loyalty program arena.

The acquisition of LMG is a significant stepping stone to fulfilling that ambition.

The brainchild of Air Miles founder Sir Keith Mills, LMG operates the UK's multisponsor Nectar loyalty card scheme, with clones in Canada, the Middle East, the Netherlands, New Zealand and Spain.

Both buyer and seller will continue to operate independently under their existing managements and program members' services remain unaltered.

His mission accomplished, Duchesne's crosswires are now trained on US targets. It could be a fertile market given that many US airlines are under pressure to monetize non-core assets by, for example, spinning-off their frequent-flier programs.

In particular he is eyeing United Airlines, which has a longstanding relationship with Air Canada via the Star Alliance global airline marketing consortium. "We will definitely seek to be involved," says Duchesne.

Data sourced from Wall Street Journal Online. additional content by WARC staff