MONTREAL — A group led by Air Canada needs to “materially raise” its $250 million cash offer to purchase the Aeroplan loyalty program, an industry analyst said Monday.

Perceptions differ between the two sides on the $2 billion Aeroplan liability that Air Canada would absorb through its offer.

“Regardless, the consortium’s offer isn’t enough”’ Adam Shine of National Bank Financial wrote in a report.

He said it needs to increase given the expenses such as accrued preferred dividends, last declared but unpaid common dividend, working capital, pension liability and severance to shutter operations.

Aimia’s shares have surged 40 per cent to about $3.50 since the country’s largest carrier made an offer that included cash and acceptance of the loyalty program’s liability for miles issued.

However, they are about 60 per cent below the $8.93 they traded at before Air Canada announced last May that it wouldn’t renew its 30-year exclusive partnership in 2020.

Airline CEO Calin Rovinescu last Friday described the offer as “extremely generous”, adding the consortium which includes TD, CIBC and Visa is likely the only buyer willing to take on the liability.

“Some of this is negotiating in public and talking at key Aimia shareholders that have visions of far greater value for Aimia’s assets than anything others may be willing to pay,” Shine wrote ahead of Air Canada’s Thursday deadline.

“We don’t think Aimia will completely reject the consortium’s proposal, but how much more cash it may extract is difficult to assess.”

Rovinescu’s comments suggest that a doubling or tripling of the cash offer isn’t likely to materialize but could be increased by $100 million to $150 million, he said.

Chris Murray of AltaCorp Capital also thinks Air Canada will pony up some more money to ensure a smooth transition for its customers who use Aeroplan and ensure its value is maintained.

“I would not be surprised to see a slightly increased bid but I don’t think it’s going to be material,” he said in an interview.

Air Canada created Aeroplan as in-house loyalty program but it was spun off as an independent business as part of a court-supervised restructuring of the airline at the time, CIBC was Aeroplan’s main bank partner.

Since 2014, TD has been Aeroplan’s main Visa card partner although CIBC continues to offer Aeroplan cards rewards points that can be redeemed for Air Canada flights and other merchandise.