If spinoffs are the airline industry's future, then Air Canada is its undisputed leader.

Over the past two years, spinoffs at Canada's largest airline have led to the existence of four separate public companies -- the airline itself, low-cost partner Jazz, frequent-flier program Aeroplan and ACE Aviation Holdings.

All are traded on the Toronto Stock Exchange. ACE itself also sold off 70% of its maintenance operation this year.

Shares in the two non-airline companies have done well, while the airline stocks have dropped. In general, the performances mirror the industry's history. While airlines tend to be profitless, everyone who touches them -- aircraft makers, airports, suppliers, investment bankers, executives and employees (with some notable post-Sept. 11 exceptions) -- does fine.

Considering this, it should be no surprise that the industry's transaction du jour is to spin off frequent flier programs, following the Air Canada model.

Over the past year, talk of consolidation among the airlines has faded. This year has seen the collapse of proposed takeovers of Delta ( DAL) by US Airways ( LCC) and Midwest ( MEH) by AirTran ( AAI).

Additionally, despite years of hunting for merger partners, United ( UAUA) CEO Glenn Tilton came up short. Now Tilton is one of two leading industry voices calling for spinoffs.

The other is Hannes Smarason, CEO of the Icelandic company FL group. Over the past year, FL Group has accumulated 9.1% of the shares of American Airlines parent AMR ( AMR). In a September letter to the AMR board, Smarason urged a frequent-flier program spinoff, writing that "the concept of unbundling has already been proven to generate value," and citing Aeroplan as the prime example.

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