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Canada comprises just six per cent of the global loyalty rewards market, and management at Aimia Inc., the parent company of the popular Aeroplan rewards plan, knows it needs to look beyond its home borders. So it's doubling down in Mexico.

On Tuesday, Aimia confirmed the swirling speculation that it would invest more money in Premier Loyalty & Marketing, Mexico's version of Aeroplan. In exchange for coughing up $88-million, Aimia will boost its stake in the partnership from 29 per cent to 49 per cent, almost putting it on par with its partner Grupo Aeromexico.

Management is upfront about its intentions: they are keen on "replicating the Aeroplan programme in Mexico," according to a recent investor presentation.

They've got quite the runway to do so. Club Premier, the name of Mexico's plan, has only a 2 per cent market penetration. Aeroplan's is 13 per cent in Canada. And in Mexico, only 9 per cent of all consumer payments are made with cards, yet the compound annual growth rate of their usage is 11 per cent.

Aeroplan first entered Mexico in September 2010 when it invested in Club Premier alongside Grupo Aeromexico, the country's domestic airline. Two years ago, the rewards program had 2.5 million members and four financial partners. Today it has 3.2 million members and 12 financial partners, including American Express. Better yet, Club Premier's gross billings jumped 64 per cent over the last six quarters, according to a research note from BMO Nesbitt Burns.

Margins are also hefty, comparable even to Canada's. Both country's adjusted earnings before interest, taxes, depreciation and amortization hover around 30 per cent. However, Club Premier is much smaller than Aeroplan. Its gross billings last quarter totalled $36-million (U.S.), whereas Aeroplan's totalled $332-million (Canadian.)

But the new investment is clearly a growth play. And should it pan out, investors will continue to get hefty returns. Since January, Aimia's stock is up 25 per cent, recovering all of the market losses it realized when the stocks went on the fritz last fall, and then some.

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