Newspaper article The Canadian Press

Loyalty Points Operator Aimia Lowers Outlook on Weak Canadian Outlook

Newspaper article The Canadian Press

Loyalty Points Operator Aimia Lowers Outlook on Weak Canadian Outlook

Article excerpt

Aimia says billings lower this year

--

MONTREAL - The operator of Aeroplan and other customer-loyalty programs expects challenging economic conditions in Canada will curtail consumer spending and its gross billings through the beginning of 2016.

Aimia Inc. (TSX:AIM) lowered some expectations for 2015 Friday after gross billings slipped in its most recent quarter.

"The rest of this year will be tough for anybody in the consumer businesses, particularly in Canada," CEO Rupert Duchesne said in an interview.

Duchesne said consumer spending has deteriorated rapidly, especially in Alberta, and will likely come in at around two per cent for the year and maybe less in 2016 as bad economic news, talk of recession and an uncertain federal election accelerate consumer anxiety.

"You're naturally going to spend less and splurge less and that's exactly what we think is going to go on, and frankly it could go on well into the first half of next year," he added.

The Montreal-based company, which estimated in February that it would have gross billings of between $2.56 billion and $2.61 billion in 2015, lowered both the high and low end of the range by $100 million on Friday to below the 2014 level of $2.57 billion.

Duchesne said an accounting change was responsible for about half of the reduction in gross billings and "the rest, frankly, is due to a slowing economy in both of our major markets (Canada and Europe.)"

Meanwhile, he said the transition to TD Bank (TSX:TD) as its main Aeroplan Visa issuer that began in January 2014 has gone well, with a "really huge" seven per cent increase in the active card base and "a big increase in purchase volumes as well."

Aimia would normally be cutting back on promotional activity at this point -- with stability returning after TD replaced CIBC (TSX:CM) as its main Visa partner -- but a change in government rules on credit cards will require a continued push, he said. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.