U.S. and Asian airlines acquiring enormous stakes in WestJet
Canadian airline WestJet is selling hundreds of millions of dollars worth of stakes in its business to two longtime partners from the United States and Asia in a move the companies involved describe as “investments.”
WestJet announced on Friday that Delta Air Lines and Korean Air will acquire a 25 per cent stake in the airline for US$550 million. According to the Bank of Canada currency converter, that is around C$766 million as of Friday, May 9.
Toronto-based private equity firm Onex Partners, affiliated funds, and co-investors are selling the minority equity stakes in WestJet.
Company CEO Alexis von Hoensbroech said that the sale is a seal of approval for Canada’s second-largest airline.
Ritu Manoj Jethani/Shutterstock
- You might also like:
- WestJet just suspended more flights between Canada and the U.S.
- Flair Airlines named one of the most reliable in North America
- HUGE majority of Canadians would rather do road trips in Canada than travel to U.S.
“These investments, and the enhanced partnerships they bring, are an endorsement of our people and WestJet’s differentiated performance through an extraordinary period for aviation in recent years,” said Hoensbroech in a statement.
Delta will pay US$330 million (C$459.6 million) to acquire a 15 per cent stake, while Korean Air will invest US$220 million (C$306 million) for a 10 per cent stake.
The two new minority equity stake owners have been codeshare partners with WestJet for over a decade, allowing each Delta and Korean Air to sell seats on the Canadian airline’s flights and vice versa.
Daniel Chai/Daily Hive
WestJet also shared that Delta intends to sell and transfer a 2.3 per cent stake in WestJet to its Air France-KLM, another existing WestJet partner, for US$50 million (C$69.6 million).
Amid the shakeup of stake owners at WestJet, it was confirmed that Onex Group will continue to own and control the Calgary-based airline.
“Delta, Korean, and Air France-KLM are among the world’s most prominent and best-managed airlines,” said Tawfiq Popatia, co-head of Onex Partners, in a release. “Onex is delighted to welcome them as shareholders in WestJet.”
The news comes as WestJet has temporarily suspended several flights from major Canadian cities to the United States, including from Vancouver, Kelowna, Calgary, Edmonton, Winnipeg, and St. John’s.