Negotiations between CIBC and Aimia have been ongoing for the last few months. As part of the current agreement, CIBC maintains a right of first refusal with Aimia. The right of first refusal means the bank can renew its agreement with Aimia, under new conditions, before any agreement with a new provider is signed.
Rupert Duchesne, CEO of Aimia, was asked about the challenge of switching current CIBC Aeroplan accountholders to TD credit cards. Duchesne believes there is little for clients to worry about as “a substantial majority of them have no relationship with CIBC other than the card.”
The agreement with TD includes a $100 million upfront deposit with a commitment to spend 15 percent more per travel mile than CIBC. The agreement will also allow TD to launch co-branded Aeroplan credit cards, two of which are already under consideration for specific target audiences. However, Aimia acknowledged CIBC’s right of first refusal by agreeing to reimburse $80 million to TD if an extension with CIBC is confirmed.
Gerry McCaughey, CEO of CIBC, hinted that the company may take a different route altogether, and allow the agreement between Aimia and TD to proceed. The statement suggests relations have soured between CIBC and Aimia, and McCaughey admitted he is willing to spend $50 million to launch a sole CIBC branded travel rewards credit card, similar to the Avion credit card provided by RBC.