Air Miles

In response to the current restructuring of the Canadian airline industry, and the subsequent filing by Canadian Airlines for court protection and formal restructuring proceedings under the Companies Creditors Arrangement Act —as reported on in the May edition of Lexpert—The Loyalty Group has been seeking to protect the ability of the “AIR MILES” Reward Program’s 11 million collectors to access domestic air travel rewards. Since Air Canada announced its intention to acquire Canadian Airlines and merge its operations with those of Air Canada, The Loyalty Group has been taking steps to maintain for its collectors the availability of tickets for domestic airline travel. Those efforts culminated in agreements between The Loyalty Group, Canadian Airlines and Air Canada in late April, 2000 that allow The Loyalty Group to offer domestic air travel rewards to collectors on both Canadian Airlines and Air Canada flights.

In addition, The Loyalty Group entered into an agreement with WestJet in May, 2000 for the supply of seats on its airline for collectors of AIR MILES reward miles, adding more opportunities for collectors to redeem flights within Canada and flight service to smaller centres collectors need to reach, especially in Western Canada.

Blake, Cassels & Graydon LLP represented The Loyalty Group in its negotiations with Air Canada, Canadian Airlines and WestJet and in the Canadian Airlines CCAA proceedings. The Blakes team, which was directed by Michael Kline, in-house Vice President, Legal Services, with The Loyalty Group, consisted of Mark Selick (Toronto) on the contract negotiations, and Susan Grundy, Lisa Corne (Toronto) and Robert Anderson (Calgary) on insolvency issues and the CCAA proceedings.

Strategic advice on a variety of issues was also provided by Jack Quinn, Joel Richler, Gordon McKee and Martin Fingerhut (Toronto). Stikeman Elliott acted for Air Canada. The Stikeman team was comprised of Josée Gravel on the contract negotiations and Sean Dunphy and Eliot Kolers on insolvency matters and the CCAA proceedings. Laura Muscoby, Corporate Counsel, Canadian Airlines International Ltd., acted for Canadian Airlines. Daryl Fridhandler of Burnet, Duckworth & Palmer, represented WestJet in the contract negotiations between WestJet and The Loyalty Group.