Negotiations between Air Canada (AC, Montréal Trudeau) and Aimia regarding the sale of the loyalty programme Aeroplan have broken down after the parties could not agree on a price, The Canadian Press has reported.

The Canadian flag carrier together with three financial partners, the Toronto-Dominion Bank, the Canadian Imperial Bank of Commerce, and Visa Canada offered CAD325 million Canadian dollars (USD251 million) in cash for the loyalty programme. The consortium would also assume CAD2 billion (USD1.5 billion) in liabilities, putting the total value of the bid at CAD2.325 billion (USD1.793 billion). The final offer was significantly higher than the initial bid submitted by the consortium, which included CAD250 million in cash.

"Air Canada, TD, CIBC and Visa enhanced the offer and engaged in extensive discussions with Aimia over the past several days to attempt to reach an economically viable agreement," Air Canada said.

However, Aimia demanded at least CAD450 million in cash.

"Aeroplan is committed to protecting our members' miles. It is business as usual for Aeroplan and we expect all of the companies in the current partner consortium to honour their long-standing contractual obligations including issuing and redeeming members' miles," Aimia CEO Jeremy Rabe said.

The Canadian flag carrier earlier said it intends to have its own loyalty programme after 2020, once the current agreement with Aimia expires. It can do so either by taking over Aeroplan or establish a new programme.

For its part, Aimia has been exploring new partnerships with competing carriers. On August 3, it announced a new comprehensive partnership with Porter Airlines (PD, Toronto City Centre). Once effective in July 2020, the partnership will see Porter becoming Aeroplan's preferred collection and redemption airline. The airline will also convert all miles in its existing VIPorter programme into Aeroplan miles.

Aimia also confirmed it is in talks with Oneworld regarding a potential partnership. Air Canada is a member of Star Alliance.