Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. WestJet suspended all financial guidance for the year due to the grounding of the Boeing Co. 737 Max. The union said it was concerned about what the deal means for the future of the employee share-purchase program that most are relying on for retirement savings. It’s also working toward an annualized savings target of C$200 million by the end of 2020. Onex Corp.’s $3.5-billion takeover of Calgary’s WestJet Airlines Ltd. is complete, the Toronto-based investment manager said on Wednesday. The C$2.4 billion hostile bid, with financial backing from AMR Corp.’s American Airlines, was eventually abandoned after an unfavorable court ruling. Have a confidential tip for our reporters? 351 King Street East, Suite 1600, Toronto, ON Canada, M5A 0N1, Just $1.99 per week for the first 24 weeks. “This doesn’t represent any big strategic pivot or transformational change for the company -- we really invested in an existing team, an existing culture and an existing plan," Tawfiq Popatia, a managing director at Onex, said in an interview. The plan was dropped after being ruled illegal by a Quebec court. In the past six years, Calgary-based WestJet has created both regional and budget airlines -- WestJet Encore and Swoop -- and set its sights on long-haul routes with an order for 10 Boeing 787 jetliners set for delivery before 2022, receiving the first one earlier this year. Canada's Most Trusted News. ", Private sector union Unifor said it would stand up for WestJet workers as it is sold to Onex, "a takeover specialist with a long history of cost cutting and restructuring at the companies it buys.". Read the full release here: https://t.co/oN87D2Iod2 pic.twitter.com/Bhf7nITLgg, A WestJet plane at Vancouver International Airport in on Feb. 3, 2014. The plan is very much part of the appeal of this business...We're very much investing in this management team," he told The Canadian Press, saying that no major changes were afoot. I'm a print subscriber, link to my account, Avoid the use of toxic and offensive language. "We expect shareholder approval” given the premium over Friday’s closing share price. WestJet chief executive Ed Sims, who will remain CEO, said "there are no job losses planned as a direct consequence of this transaction.". That relationship with employees has been tested in recent years as the airline’s pilots and flight attendants unionized. 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Transat shareholders in August approved Air Canada’s offer worth $18 a share or $720-million in cash. “The agency reminded Onex that the requirement to be Canadian is an ongoing requirement, and that for WestJet and Swoop Inc. to remain Canadian, Onex must remain Canadian,” the CTA said in a statement. var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o? The completion of Onex Corp.'s $5 billion purchase of Calgary-based WestJet marks the largest private … The firm tried to acquire Air Canada and merge it with Canadian Airlines in 1999. Engage in respectful discussions on the U.S. election on our dedicated Facebook page, Use of this Website assumes acceptance of Terms & Conditions and Privacy Policy, Published Monday, May 13, 2019 8:32AM EDT, Last Updated Monday, May 13, 2019 5:40PM EDT, WestJet profit up despite struggling Swoop operation and 737 Max concerns, Who is Gerald Schwartz? A single foreign investor cannot control more than 25 per cent of a carrier. Onex slashed its offer for WestJet from $35.75 a share after reviewing the airline’s finances. Under the agreement announced Monday, Onex will pay $31 per share for WestJet, which will operate as a privately held company after two decades on the Toronto Stock Exchange. "The plan is what draws us. “They’ve committed to no job losses and to WestJet’s expansion plans. The sale also follows an announcement last month that tour operator Transat A.T. Inc. is seeking a potential sale. WestJet expects the 737 Max to be back in service in the second half of this year, Sims said in an interview with BNN Bloomberg TV. Nearly 20 years after abandoning his hostile bid for Air Canada, Gerry Schwartz finally got his airline by agreeing to buy WestJet Airlines Ltd. for C$3.5 billion ($2.6 billion). The deal is subject to approvals by the federal government. Alberta Premier Jason Kenney weighed in Monday. Calgary-based WestJet soared 60 percent to C$29.62 at 3:55 p.m. in Toronto. "What I really like from a sell perspective - from the WestJet perspective - is working with a like-minded partner who sees the value that we have always seen in the strategic direction we are taking," Sims said. We will hold them to that promise.". A freshly expanded Flair Airlines, soon-to-launch Canada Jetlines Ltd., and Air Canada's low-cost Rouge are all crowding the budget airspace that WestJet has flown into with its 11-month-old, ultra-low-cost Swoop subsidiary. The acquisition is valued at C$5 billion including debt, Toronto-based Onex said in a statement Monday. WestJet’s earnings have come under pressure in recent years with the launch of several lower cost airlines in the country. Please log in to listen to this story. Welcome to The Globe and Mail’s comment community. (The Canadian Press/Darryl Dyck). WestJet’s takeover comes as Transat A.T. Inc., a leisure carrier based in Montreal, is being purchased by Air Canada. The stock closed up nearly 60 per cent or $11.09 at $29.61 on Monday. Full Disclaimer. Sign up for our weekly email newsletter delving into climate science and life on a changing planet. Transat rose 4.5 percent Monday, while Air Canada, the country’s biggest carrier, rose 5.5 percent. “WestJet is looking for growth, which will be hard to find inside Canada as the market is relatively small.”. WestJet's current growth spurt could also generate profits to offset the rising cost of labour following the unionization of fight attendants and pilots. Onex offered C$31 a share, a 67% premium to the airline’s closing price May 10. We hope to have this fixed soon. Foreign ownership of airlines is capped at 49 per cent. © Copyright 2020 The Globe and Mail Inc. All rights reserved. Analyst Benoit Poirier of Desjardins Securities said Onex might also look to acquire Transat A.T. The surprise move comes as competition heats up in the Canadian airline sector, with several discount carriers entering the space.

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