The Watch
LATITUDE
CANADIAN AIRPLAY: BIG NAMES HAVE BIG PLANS TO EXPAND MARKET SHARE When WestJet took flight in 1996, it promised customers a different take on the traditional airline experience—that is, low fares and friendly, upbeat crews, but few frills. After more than two decades, the former underdog in the Canadian airline industry has gone far beyond its humble roots and hit the big time. Today, WestJet serves 100 destinations worldwide and is working hard to compete with its larger rival: Air Canada. On the heels of WestJet’s winter acquisition of a Boeing 787 Dreamliner—a 320-seat plane designed to add comfort to international flights—the company now hopes to sell itself to private equity firm Onex Corp. in a $3.5-billion cash deal. The friendly takeover would make the airline private again, after going public in 1999. By doing this, WestJet would have the resources to expand its fleet and better compete with Air Canada, which has been thriving. From 2015 until the end of 2018, Air Canada’s stock increased 119 per cent. WestJet shares fell 46 per cent. Industry experts anticipate that the deal will go through, but historically Onex has failed in its attempts to acquire airlines. Twenty years ago, it partnered with the parent company of American Airlines in a hostile bid to both acquire and merge the now-defunct Canadian
BIG BUY If successful, WestJet's planned sale to Onex Corp. would return the company to private ownership.
Airlines and Air Canada. A Quebec court nixed the deal. The company was also part of a consortium that tried and failed to buy Australia’s Qantas Airways Ltd. in 2007. But even if this deal goes through, giving Air Canada a run for its money will be no simple task for WestJet. Shortly after the Onex news broke, Air Canada announced it was in talks to buy Montreal- headquartered Transat for about $520 million, boosting its market share most notably in the package vacation space.
42 | PEG SUMMER 2019
Made with FlippingBook flipbook maker