All flight paths point to a WestJet public offering in the next two years.
Following Onex Corp.’s sale of 25 % of WestJet earlier this month to Delta Air Lines, Korean Air and Air France-KLM, an IPO is seen as the next natural step.
In an interview with Bloomberg, Tawfiq Popatia, head of Onex Partners, said an IPO would be a “natural next step” because “airlines are very large, capital-hungry enterprises.” He added that people could expect the listing to happen “in a couple of years.”
The 22OCT sale saw Delta Air Lines acquire a 12.7% stake, Korean Air 10 per cent, and Air France-KLM 2.3%. As previously reported by Open Jaw, the USD 550 million deal brings three major SkyTeam members, each strong in different global regions, to the same table with Canada’s number-two carrier.
The lucrative deal means Onex has now recovered its entire investment in WestJet, nearly six years after its initial purchase, while retaining a 75% ownership. At the time of the acquisition, WestJet was still publicly traded, and just weeks before the onset of the COVID-19 pandemic, the Toronto-based firm took the airline private in December 2019 in a $3.5 billion transaction.
Popatia said those first few years were difficult, but WestJet managed to get through the pandemic without "raising equity or taking state aid."
The union representing WestJet workers has voiced concern about the prospect of an IPO. Unifor called the idea “a chilling reminder that private equity’s profits come before people.” The union said WestJet employees have faced “layoffs, outsourcing, and constant restructuring,” and urged the airline to agree to job-protection measures and clearer wage guidelines.
Despite the pushback, Popatia told Bloomberg that Onex has ambitious, profitable plans for WestJet’s future.
“We really spotted something in WestJet that was interesting to us,” he said.
