passengers waiting for flight stock photo

BMO Financial Group announced a deal Friday to buy the Air Miles loyalty rewards program in Canada after its U.S. parent company filed for bankruptcy.

Financial terms of the bank’s agreement with LoyaltyOne Co. were not immediately available.

Air Miles president Shawn Stewart called the deal a “significant step forward in solidifying the future of the Air Miles program.”

The deal has “no impact on Air Miles collectors’ reward miles balances or on collectors’ ability to collect and redeem Air Miles reward miles,” Stewart said in a statement.

Air Miles is one of the largest loyalty programs in Canada, with nearly 10 million active collector accounts representing about two-thirds of Canadian households.

Collectors earn Air Miles through retail stores, service locations and some credit and debit cards, which can be redeemed for “aspirational rewards” like merchandise, travel, events, and attractions.

Yet Air Miles has lost a string of big retailers in Canada in recent years.

Last summer, Sobeys and Safeway owner Empire Co. Ltd. and office supply retailer Staples said they would be scrapping the Air Miles program, a year after the Liquor Control Board of Ontario and Lowe’s Canada pulled out of the program.

Loyalty Ventures Inc., the parent company of LoyaltyOne, filed for Chapter 11 bankruptcy in the U.S. on Friday.

The BMO deal for Air Miles has been proposed as part of LoyaltyOne’s proceeding under the Companies’ Creditors Arrangement Act in Canada.

The process will include a sale and investment solicitation process to seek any other interest in the Air Miles business.

The sale transaction is contingent on LoyaltyOne not receiving a more favourable offer and will require court approval.

BMO said the purchase would accelerate the future growth of Air Miles.

“If our acquisition of the Air Miles business is successful, we will bring the ownership of Air Miles home to Canada and strengthen its offering for Canadian consumers and businesses together,” Ernie Johannson, BMO’s group head, North American personal and business banking, said in a statement.

The bank has been an Air Miles partner since 1992.

Rewards programs have proliferated in recent years as companies seek to learn more about customers and their shopping habits.

The data collected through these programs has increasingly been used to target customers with tailored-made marketing offers and promotions in a bid to increase sales and loyalty.

The mounting value of loyalty programs has prompted some retailers to adopt and expand their own programs.

Last June, Empire said it would scrap the Air Miles program after becoming a co-owner of the Scene+ program operated by Cineplex Inc. and Scotiabank. It began to transition to Scene+ last August.

A notice on the Air Miles website said as of this month, Sobeys and all its affiliated banners will no longer be part of program once Thrifty Foods and IGA complete the company’s exit.