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From the first headlines to done deal: WestJet’s acquisition by Onex
Photo via @WestJet

From the first headlines to done deal: WestJet’s acquisition by Onex

Monday, December 30, 2019

TORONTO — Back in 1999, when Onex Corporation wanted to merge Air Canada and Canadian Airlines in a $1.8 billion deal, Air Canada came out on top with its $92 million acquisition of the struggling carrier.

Turns out patience really is a virtue. Onex wasn’t victorious that time, but 20 years later, it got its airline. Led by Chairman and CEO Gerry Schwartz, Onex came in strong with its plan to buy WestJet in a $5 billion deal, including debt.

The travel industry got a wake up call from the weekend that Monday, May 13 when Onex announced its intentions to buy WestJet. The two companies revealed they had been in talks since March.

WestJet was flying high with its new Dreamliners, a new look and a new marketing strategy aimed at the premium market, however it wasn’t all smooth sailing. The airline had a tough go in 2018 due in part to a to-the-brink pilot’s strike (thankfully averted) and its first quarterly loss in 13 years.

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There have been some bumps on the tarmac for WestJet’s ultra low-cost carrier Swoop as well, in the wake of consumer frustration after multiple flight cancellations this past summer. However in a crowded field, with Air Canada Rouge and Flair Airlines, the ULCC welcomed its 1 millionth passenger in May 2019, and in December was named Start-up Airline of the Year at the CAPA World Aviation Outlook Summit.

The WestJet board of directors unanimously recommended that WestJet shareholders vote in favour of the Onex transaction, and with green lights from all the right places, the deal got sign-off on Dec. 11.

Onex is taking WestJet private and CEO Ed Sims has said there’s relief at the airline to be escaping the scrutiny that comes with being a public company. Sims has likened the pressure of posting quarterly results to being a gardener and pulling up seedling carrots every three months to see how they’re growing.

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The first of WestJet’s Dreamliners began arriving in Calgary earlier this year and the carrier has options for an additional 10 aircraft to arrive between 2020 and 2024. The Dreamliners carry 320 guests in a three-class cabin configuration, including WestJet’s new Business cabin featuring 16 private pods with lie-flat seats, an upscale Premium cabin and an updated Economy cabin.

In October the carrier announced its newest European destination, Rome, with new nonstop Dreamliner seasonal service out of Calgary starting May 2, 2020. WestJet’s is looking to boost capacity by 200,000 seats on key Dreamliner routes out of Calgary. WestJet passengers flying out of Toronto and Vancouver will get more domestic and transatlantic 787-9 Dreamliner service for summer 2020 as well.

Watch for more year-end coverage in Travelweek Daily on Dec. 31st with a fun look at the best oddball stories of the year.

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