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WestJet weighs in on Transat rumours

WestJet weighs in on Transat rumours

Wednesday, May 15, 2019

CALGARY — Addressing the media at the WestJet campus Calgary yesterday, WestJet President and CEO Ed Sims made it clear that as far as he’s concerned, it’s business as usual for the carrier despite the Onex deal.

About those Transat rumours, Sims said: “Our strategy is focused on what WestJet can do and how we can grow. I’m not going to comment on potential speculation on consolidation opportunities or otherwise.”

The Onex deal, which will see the private equity firm acquire WestJet for $3.5 billion plus debt, came together in an extraordinarily tight timeframe, said Sims. “Onex called us. It was a cordial conversation,” he said, adding: “We have delivered this transaction in a remarkably short amount of time, within the last 8 weeks.”

Asked if there had been negative feedback from WestJet employees about the Onex news, Sims said no. “Our staff needed reassurance that this was good for long-term job security. We wanted to communicate directly and authentically and honestly with our staff. It’s in our values and our DNA.”

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Sims said the Onex deal “gives us sustainability. It gives us the ability to deliver on our long-term strategy … with confidence that we have the backing of a Canadian-based entity.”

WestJet recently welcomed the first of its new 787 Dreamliner aircraft, with more to come this year and in 2020 and 2021. The three-cabin aircraft offer business class, premium economy and economy. The airline, with joint ventures with Delta and Air France/KLM in the works, has set its sights set on global expansion and is aggressively courting corporate travellers as well as ‘bucket-list achievers’.

The challenges now, says Sims, “are to make sure that WestJetters understand the deal and understand that it doesn’t impact job security, and to make sure WestJet delivers on its initiatives.”

For Onex’s part, he added, “they have not spent $5 billion on this entity to try to shrink their way to prosperity. They have a growth agenda and they believe we have a growth agenda. They are fully committed, as we are, to building and growing.”

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Assuming the deal goes through, WestJet will operate as a privately-held company from late 2019 or early 2020 onwards.

Under the terms of the agreement, Onex and its affiliated funds will acquire all outstanding shares of WestJet for $31 per share. The total transaction value is $5 billion in an all-cash deal including assumed debt.

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