Air Canada spins off frequent flyer unit as separate division

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MONTREAL--Air Canada's Aeroplan frequent flyer unit has been reorganized as a separate division with the aim of further developing its potential and value as an international leader in customer loyalty management.

The airline plans to further consider the merits of establishing a separate corporate entity and of launching an initial public offering for Aeroplan in the future.

Rupert Duchesen, formerly chief integration executive, Air Canada and Canadian Airlines, is heading the new division as president. Mr. Duchesne joined Air Canada in 1996 as VP-marketing.

The new division plans to pursue an aggressive growth strategy, build on existing agreements and develop new partnerships, including the expansion into new consumer categories as well as loyalty and customer relationship management service and advisory businesses.

Aeroplan will exploit e-commerce opportunities and expand its current online features to include a virtual shopping center, where members will be able to earn Aeroplan miles for purchases of merchandise and other non-air services. It also plans to increase its value through extension of accumulation and redemption of opportunities through various types of travel and non-travel related partnerships.

Aeroplan members represent more than 50% of Air Canada's traffic and contribute more than 60% of its passenger revenue. The merger of Canadian Plus into Aeroplan in January 2001 should make the program stronger, with more than 5 million members.

Copyright August 2000, Crain Communications Inc.

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