WestJet to be sold in friendly deal to Onex Corp. for $5 billion

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Duke Point
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Re: WestJet to be sold in friendly deal to Onex Corp. for $5 billion

Post by Duke Point » Tue May 14, 2019 8:53 am

Biff wrote:
Tue May 14, 2019 5:47 am
Onex bought the company to make a 2x profit over the medium term. The only way to do that is to grow. I see a pretty big 787 order coming down within the next year.
Growing is not necessarily the only way to add value. Taking WestJet back to its core strategy, and selling of components would impress potential investors just as well.

Why would they make a "big order" for 787's? You order just 6 and that's a billion dollars. That expenditure "must" make money....lots in order to justify it. The overseas market is already saturated from Canada to a degree, and a "guaranteed return" on international expansion is a crapshoot at best. Onex is shrewd, not stupid. They will not throw hundreds of millions or billions at an operation unless they see an airtight business case for that particular model.

They are absolutely looking at the current operation, and will likely look for immediate efficiency improvements. They will likely sell assets and leaseback based on the PE model. Guessing there will be a "settling period", with nothing drastic happening for some time so as not to spook anyone. Once they are the owner, there's nothing that can be done about any business decision they make. Only one man knows for sure what the plan is......and he isn't likely talking.

DP.
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Re: WestJet to be sold in friendly deal to Onex Corp. for $5 billion

Post by CAL » Tue May 14, 2019 11:42 am

I suspect that will hurt the famous westjet T4
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moe
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Re: WestJet to be sold in friendly deal to Onex Corp. for $5 billion

Post by moe » Tue May 14, 2019 11:55 am

In the mean time, i’ll be busy selling my 5 sets of options and ESP @$31. Thanks for worrying abot our t4’s though.
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Re: WestJet to be sold in friendly deal to Onex Corp. for $5 billion

Post by Dry Guy » Tue May 14, 2019 12:08 pm

moe wrote:
Tue May 14, 2019 11:55 am
In the mean time, i’ll be busy selling my 5 sets of options and ESP @$31. Thanks for worrying abot our t4’s though.
You should save 100% of that for retirement.
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Re: WestJet to be Acquired by Onex

Post by Jack Klumpus » Tue May 14, 2019 12:15 pm

Arnie Pye wrote:
Mon May 13, 2019 12:45 pm
Quick - name another airline that fully owns their regional feeder. Look at nearly every airline out there and you'll find a feeder owned by someone else with a CPA.
American Airlines:

- PSA
- Piedmont
- Envoy

Delta Airlines:

- Endeavor Air

Alaska Air Group

- Horizon Air

Air France

- HOP!

Lufthansa

- Lufthansa CityLine

- Air Dolomiti

- Eurowings Europe

KLM

- CityHopper

British Airways

- BA CityFlyer

Alitalia

- Alitalia CityLiner

Is that enough for now?
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cloak
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Re: WestJet to be sold in friendly deal to Onex Corp. for $5 billion

Post by cloak » Tue May 14, 2019 12:30 pm

Onex has been eyeing WestJet for some time and at recent (unwarranted) suppressed share prices, it must have felt compelled to make a move. WJA shares should really be trading over 40, so even at 31, there's room for Onex to invest more into the group and unlock its true potential and value. Only then will Onex be rewarded. And the deal may not even be fully complete yet with other player(s) emerging. This is not unusual for Onex which perceives true potential and value very well to buy undervalued companies, combine them to build synergy and create something special and even more valuable (2+2=5!), e.g. chapters and indigo.

And although there are lots of speculations, it is easy to discern which are plausible. While Encore may not grow by much in comparison to other segments of the business, it is unlikely to be sold so hastily simply because its true value will not be realized just yet. In comparison for instance Swoop will likely grow rather quickly to 30 tails and perhaps beyond, because it presents the lowest risk and cost. There will also be growth in long haul program unfolding the original plan. There is also great opportunity in vacation or loyalty arm which are largely underdeveloped. This process will likely take 5 to 7 years to mature culminating in creation of a global airline. Likely at some point Delta will buy a stake, and likely an ipo in the fullness of time, leaving Onex as a smaller stakeholder perhaps.

Westjetters woke up to a surprise yesterday morning and likely good news from the market and hopefully it will serve to rally them once again to help propel their company to new heights.
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Biff
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Re: WestJet to be sold in friendly deal to Onex Corp. for $5 billion

Post by Biff » Tue May 14, 2019 12:36 pm

Duke Point wrote:
Tue May 14, 2019 8:53 am
Biff wrote:
Tue May 14, 2019 5:47 am
Onex bought the company to make a 2x profit over the medium term. The only way to do that is to grow. I see a pretty big 787 order coming down within the next year.
Growing is not necessarily the only way to add value. Taking WestJet back to its core strategy, and selling of components would impress potential investors just as well.

Why would they make a "big order" for 787's? You order just 6 and that's a billion dollars. That expenditure "must" make money....lots in order to justify it. The overseas market is already saturated from Canada to a degree, and a "guaranteed return" on international expansion is a crapshoot at best. Onex is shrewd, not stupid. They will not throw hundreds of millions or billions at an operation unless they see an airtight business case for that particular model.

They are absolutely looking at the current operation, and will likely look for immediate efficiency improvements. They will likely sell assets and leaseback based on the PE model. Guessing there will be a "settling period", with nothing drastic happening for some time so as not to spook anyone. Once they are the owner, there's nothing that can be done about any business decision they make. Only one man knows for sure what the plan is......and he isn't likely talking.

DP.
Two scenarios(keeping in mind they paid over $5 bil for a company that was worth $3 bil a couple days ago.

1. Short term investment. Sell of the components and return to core stategy. Hard to imagine that they will be able to sell Encore and the maintenance division for enough to justify that $2 bil differential. And “returning to their core stategy” might help a little but it’s a little hard to see how. Certain things have changed permanently, like wages for instance. So using this strategy, I believe, would be a very short term gamble to eek out a very small profit. Possible but not likely considering the sums of money and time commitment involves.

2. Medium to long term investment. Hope to reach a $10 bil market cap(similar to AC). They only way to do this would be to grow substantially. Growth within Canada and to the US and Caribbean, certainly could grow a little more but not enough to justify a $10 bil market cap. The way to get there would be to copy some of the larger airlines around like AC or Delta or the Emirates. That would involve large wide bodies and a world wide schedule. It could still mean Encore spun off to create some finance power.
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Re: WestJet to be sold in friendly deal to Onex Corp. for $5 billion

Post by Jean-Pierre » Tue May 14, 2019 2:56 pm

It is not as easy to start an international widebody airline as people here think when most major airport are operating at maximum capacity. If they want to majorly expand I think it will be vacation destination type stuff as a ULCC not play with the big boy.
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Re: WestJet to be sold in friendly deal to Onex Corp. for $5 billion

Post by Duke Point » Tue May 14, 2019 4:01 pm

Air Canada will not be sitting on its hands.

WestJet has more than its work cut out for itself if it wants to secure anywhere near a 10B market cap. That market share has to come from somewhere, and AC won't be giving up any willingly.

Don't ever underestimate CR....he's a shark, and likely smarter and far more experienced and connected in aviation than Gerry.

Interesting times ahead.

DP.
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Re: WestJet to be sold in friendly deal to Onex Corp. for $5 billion

Post by Biff » Tue May 14, 2019 6:43 pm

No one said it would be easy.....
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Re: WestJet to be sold in friendly deal to Onex Corp. for $5 billion

Post by brooks » Tue May 14, 2019 7:24 pm

Duke Point wrote:
Tue May 14, 2019 4:01 pm
Air Canada will not be sitting on its hands.

WestJet has more than its work cut out for itself if it wants to secure anywhere near a 10B market cap. That market share has to come from somewhere, and AC won't be giving up any willingly.

Don't ever underestimate CR....he's a shark, and likely smarter and far more experienced and connected in aviation than Gerry.

Interesting times ahead.

DP.
It's called eating your lunch bud. That's exactly what WJ is going to do to AC on it's international routes. The 787 product is identical if not better than AC and WJ costs structure is lower.
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Duke Point
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Re: WestJet to be sold in friendly deal to Onex Corp. for $5 billion

Post by Duke Point » Tue May 14, 2019 8:09 pm

brooks wrote:
Tue May 14, 2019 7:24 pm
Duke Point wrote:
Tue May 14, 2019 4:01 pm
Air Canada will not be sitting on its hands.

WestJet has more than its work cut out for itself if it wants to secure anywhere near a 10B market cap. That market share has to come from somewhere, and AC won't be giving up any willingly.

Don't ever underestimate CR....he's a shark, and likely smarter and far more experienced and connected in aviation than Gerry.

Interesting times ahead.

DP.
It's called eating your lunch bud. That's exactly what WJ is going to do to AC on it's international routes. The 787 product is identical if not better than AC and WJ costs structure is lower.
OK...Good luck.

Assuming international growth is Gerry's plan of course. You won't know for sure.

I remember a meeting with Clive back in early 2003ish. He said eating Air Canada's lunch would be easy...he called them the "bankrupt monopoly" a "rotten carcass" ripe for scavaging....his eyes glowed as he outlined how much WJ could take, and how quickly.

That was 17 years ago. Then WestJet was lean and Union free with the focused leadership of CB, DB, MH and TM. Although some market share was lost, very little of what Clive predicted came to pass over the years.

Nearly nothing of what WestJet once was exists today, so if they couldn't do it then with their sharp focus and management team how can it happen tomorrow?

Im just speculating anyway...…..I don't really have much skin in the game as I'm far too close to retirement to be affected either way.

DP.
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Re: WestJet to be sold in friendly deal to Onex Corp. for $5 billion

Post by RRJetPilot » Tue May 14, 2019 9:42 pm

brooks wrote:
Tue May 14, 2019 7:24 pm
Duke Point wrote:
Tue May 14, 2019 4:01 pm
Air Canada will not be sitting on its hands.

WestJet has more than its work cut out for itself if it wants to secure anywhere near a 10B market cap. That market share has to come from somewhere, and AC won't be giving up any willingly.

Don't ever underestimate CR....he's a shark, and likely smarter and far more experienced and connected in aviation than Gerry.

Interesting times ahead.

DP.
It's called eating your lunch bud. That's exactly what WJ is going to do to AC on it's international routes. The 787 product is identical if not better than AC and WJ costs structure is lower.
Just like Onyx did with Hawker Beechcraft eh. Sure expanded that operation.
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Re: WestJet to be sold in friendly deal to Onex Corp. for $5 billion

Post by altiplano » Tue May 14, 2019 9:52 pm

brooks wrote:
Tue May 14, 2019 7:24 pm
Duke Point wrote:
Tue May 14, 2019 4:01 pm
Air Canada will not be sitting on its hands.

WestJet has more than its work cut out for itself if it wants to secure anywhere near a 10B market cap. That market share has to come from somewhere, and AC won't be giving up any willingly.

Don't ever underestimate CR....he's a shark, and likely smarter and far more experienced and connected in aviation than Gerry.

Interesting times ahead.

DP.
It's called eating your lunch bud. That's exactly what WJ is going to do to AC on it's international routes. The 787 product is identical if not better than AC and WJ costs structure is lower.

🤣🤣🤣🤣

Wishful thinking... just like you were going to show everyone how to do the Atlantic when you got the 767s.

How the @#$! did that work out?

AC is sitting on more free cash than WS just got bought out for. They have one of the most modern fuel efficient fleets in the business. They are getting better every quarter. Entrenched loyalty positions.

Better 787 product at WS? You gotta be kidding... I watched the blogger reviews, you are way out compared to AC business product overseas... like not even close... and the rest of the seats are all cash/connection/feed sensitive... ws might take a few of the cheap seats but pissing into the wind doesn't eat ones lunch... AC is killing on yield...

Can't wait to see how "eat your lunch and show them how it's done" overseas v2.0 goes...
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dumbbell daddy
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Re: WestJet to be sold in friendly deal to Onex Corp. for $5 billion

Post by dumbbell daddy » Wed May 15, 2019 3:13 am

Just like Onyx did with Hawker Beechcraft eh. Sure expanded that operation.
Ouch! Forgot about that. This company killed off over 40 years of jet production with a stroke of a pen.
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Re: WestJet to be sold in friendly deal to Onex Corp. for $5 billion

Post by ogopogo » Wed May 15, 2019 5:40 am

brooks wrote:
Tue May 14, 2019 7:24 pm
Duke Point wrote:
Tue May 14, 2019 4:01 pm
Air Canada will not be sitting on its hands.

WestJet has more than its work cut out for itself if it wants to secure anywhere near a 10B market cap. That market share has to come from somewhere, and AC won't be giving up any willingly.

Don't ever underestimate CR....he's a shark, and likely smarter and far more experienced and connected in aviation than Gerry.

Interesting times ahead.

DP.
It's called eating your lunch bud. That's exactly what WJ is going to do to AC on it's international routes. The 787 product is identical if not better than AC and WJ costs structure is lower.
What’s a lunch bud?
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Re: WestJet to be sold in friendly deal to Onex Corp. for $5 billion

Post by groundpilot » Wed May 15, 2019 7:47 am

[/quote]

It's called eating your lunch bud. That's exactly what WJ is going to do to AC on it's international routes. The 787 product is identical if not better than AC and WJ costs structure is lower.

[/quote]

Very much an "old school" Westjetter type scare comment. Would maybe apply, say 3 years ago, but now the tides have turned

Brooks - just you know what AC has:

B777 - 25
A330 - 8
B787 - 37
B767 - 6 (25 more at Rouge)

That is a widebody fleet of 101 aircraft. Westjet has what...3 X 787s and 1 X 767 operating this summer? Many, many, many barriers before you even get close to AC numbers.

I am a bit surprised this koolaid still exists after all that is happened. I guess some are still holding tight in those trenches.

Never say never, but I am saying "unlikely". Ummm...Lunch...
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Re: WestJet to be sold in friendly deal to Onex Corp. for $5 billion

Post by Victory » Wed May 15, 2019 7:55 am

What a dumpster fire. Wouldn't surprise me if there is a strike at Encore now to welcome the new owners.
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Re: WestJet to be sold in friendly deal to Onex Corp. for $5 billion

Post by CitationNation » Wed May 15, 2019 9:06 am

Listening to a WestJetter (can I call you that still) talk about Air Canada domination is laughable. It’s funny how two weeks ago we were talking about Two strong canadian airlines and “working together for a strong Canadian pilot group” , now you’re set on taking us down ..good luck
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Re: WestJet to be sold in friendly deal to Onex Corp. for $5 billion

Post by landshark » Wed May 15, 2019 9:13 am

A strike now would be illegal.

Im just curious what the rush was to get the TA signed at Encore before May 14th? Couldn't the vote for the TA have been decided after the vote for the 1 list, then you would have a leg to stand on.
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Re: WestJet to be sold in friendly deal to Onex Corp. for $5 billion

Post by altiplano » Wed May 15, 2019 12:48 pm

groundpilot wrote:
Wed May 15, 2019 7:47 am

It's called eating your lunch bud. That's exactly what WJ is going to do to AC on it's international routes. The 787 product is identical if not better than AC and WJ costs structure is lower.
Very much an "old school" Westjetter type scare comment. Would maybe apply, say 3 years ago, but now the tides have turned

Brooks - just you know what AC has:

B777 - 25
A330 - 8
B787 - 37
B767 - 6 (25 more at Rouge)

That is a widebody fleet of 101 aircraft. Westjet has what...3 X 787s and 1 X 767 operating this summer? Many, many, many barriers before you even get close to AC numbers.

I am a bit surprised this koolaid still exists after all that is happened. I guess some are still holding tight in those trenches.

Never say never, but I am saying "unlikely". Ummm...Lunch...
A330 - 8

Now 9...
3B0BDAB9-C88E-4034-AC8D-5AE7A6ECE08D.jpeg
3B0BDAB9-C88E-4034-AC8D-5AE7A6ECE08D.jpeg (79.55 KiB) Viewed 2322 times
Soon to be 14, with 6 confirmed additions... and more being sourced.
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Re: WestJet to be sold in friendly deal to Onex Corp. for $5 billion

Post by pianokeys » Wed May 15, 2019 1:00 pm

altiplano wrote:
Tue May 14, 2019 9:52 pm

Wishful thinking... just like you were going to show everyone how to do the Atlantic when you got the 767s.
HAHAHA this comment wins the Comment Of the Year Award. I love how cocky brooks gets about WS, like he himself is sucking the blue koolaid out of the tip of CBs wang. Just remember brooks, they dont call AC "Big Red" for nothing.
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Re: WestJet to be sold in friendly deal to Onex Corp. for $5 billion

Post by altiplano » Wed May 15, 2019 1:36 pm

pianokeys wrote:
Wed May 15, 2019 1:00 pm
altiplano wrote:
Tue May 14, 2019 9:52 pm

Wishful thinking... just like you were going to show everyone how to do the Atlantic when you got the 767s.
HAHAHA this comment wins the Comment Of the Year Award. I love how cocky brooks gets about WS, like he himself is sucking the blue koolaid out of the tip of CBs wang. Just remember brooks, they dont call AC "Big Red" for nothing.
I don't know... "sucking the blue koolaid out of the tip grumpy grandpa's wang" is right up there!
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Re: WestJet to be sold in friendly deal to Onex Corp. for $5 billion

Post by Victory » Thu May 16, 2019 6:47 am

Oops, the plan for WestJet world domination just got cut short. What's for lunch today?
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Biff
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Re: WestJet to be sold in friendly deal to Onex Corp. for $5 billion

Post by Biff » Thu May 16, 2019 7:00 am

Victory wrote:
Thu May 16, 2019 6:47 am
Oops, the plan for WestJet world domination just got cut short. What's for lunch today?
Buying new 787’s from a company called Boeing, maybe???
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