Westjet, AC and Transat

Old Feb 12, 21, 4:10 pm
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Westjet, AC and Transat

The AC Transat tie-up deal is approved and WestJet are not happy.

https://blog.westjet.com/flyer-bewar...o-competition/

In other news, anyone care to bet that the un-named bidder here isn't Onex?

https://www.theglobeandmail.com/busi...uyer-ceo-says/
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Old Feb 12, 21, 5:09 pm
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Originally Posted by Frequentlander View Post
The AC Transat tie-up deal is approved and WestJet are not happy.

https://blog.westjet.com/flyer-bewar...o-competition/

In other news, anyone care to bet that the un-named bidder here isn't Onex?

https://www.theglobeandmail.com/busi...uyer-ceo-says/
Once burnt. Twice shy. Onexs timing was perfectly awful.
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Old Feb 12, 21, 7:30 pm
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Originally Posted by sydneyracquelle View Post
Once burnt. Twice shy. Onex’s timing was perfectly awful.
I’m not so sure, merging Swoop and Sunwing into a single entity may be a market opportunity that is worth a gamble from Schwartz, especially as he has previous personal run-ins with Air Canada and may want to dominate Air Transat / Rouge in North American vacation destinations in the recovery after COVID. If it fails, he has more tax write-downs for the Onex group. The Sunwing 737-800s are as close to the Swoop config as you can get, for a common fleet type, with a swap of WS 737-800s for the MAXs that Sunwing is taking.

Onex also has a history of partial ownership of companies that it acquires, so 49% ownership of Sunwing by TUI wouldn’t be a problem in their business model.

Last edited by aerobod; Feb 12, 21 at 7:35 pm
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Old Feb 12, 21, 9:21 pm
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What does Sunwing have that WestJet couldn't spawn organically?
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Old Feb 12, 21, 9:32 pm
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Originally Posted by Error 601 View Post
What does Sunwing have that WestJet couldn't spawn organically?
Capacity that could be acquired (probably at a low price at the moment), as opposed to competing against it when volume increases again.
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Old Feb 12, 21, 10:22 pm
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Originally Posted by aerobod View Post
Im not so sure, merging Swoop and Sunwing into a single entity may be a market opportunity that is worth a gamble from Schwartz, especially as he has previous personal run-ins with Air Canada and may want to dominate Air Transat / Rouge in North American vacation destinations in the recovery after COVID. If it fails, he has more tax write-downs for the Onex group. The Sunwing 737-800s are as close to the Swoop config as you can get, for a common fleet type, with a swap of WS 737-800s for the MAXs that Sunwing is taking.

Onex also has a history of partial ownership of companies that it acquires, so 49% ownership of Sunwing by TUI wouldnt be a problem in their business model.
It is only the airline division , that is what is at stake . Tui is invested in the Sunwing parent group. Whomever the buyer, the airline becomes theirs 100%
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Old Feb 13, 21, 11:23 am
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Originally Posted by aerobod View Post
Capacity that could be acquired (probably at a low price at the moment), as opposed to competing against it when volume increases again.
That would be an awfully bullish bet.
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Old Feb 15, 21, 2:48 am
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Originally Posted by Error 601 View Post
What does Sunwing have that WestJet couldn't spawn organically?
Potentially a long-term contract with its parent Sunwing Vacations to provide lift for the tour packages Sungwing sells.

This is the same situation as buying someone buying Jazz. The value of Jazz is not in its airline, it is in the long-term contract it has with it single major customer.

The key question, is can WestJet merge the Sunwing fleet and people into its operation, remove any redundant back-office functions and end up with an operation that is more cost effective than both companies being on their own.
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Old Feb 15, 21, 9:01 am
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Originally Posted by Fiordland View Post
The key question, is can WestJet merge the Sunwing fleet and people into its operation, remove any redundant back-office functions and end up with an operation that is more cost effective than both companies being on their own.
I would say that if Onex is the bidder on Sunwing, then they have well practiced expertise across a whole raft of industries in making operations more efficient and cost effective, it is the core of their business model to turn around companies and sell them at a profit.
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Old Feb 15, 21, 9:20 am
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They are not selling.

https://travelindustrytoday.com/perf...lling-sunwing/Although we are in the middle of a pandemic, said Hunter, I am very excited and optimistic about the future for Sunwing. We are positioned perfectly to continue to be the leader in vacation travel.

As for the idea that he was looking for a buyer, the last word goes to Stephen Hunter, I dont play Golf and therefore I have no interest in selling the company.
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Old Feb 15, 21, 11:40 am
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Originally Posted by cirrusdragoon View Post
They are not selling.

https://travelindustrytoday.com/perf...lling-sunwing/Although we are in the middle of a pandemic, said Hunter, I am very excited and optimistic about the future for Sunwing. We are positioned perfectly to continue to be the leader in vacation travel.

As for the idea that he was looking for a buyer, the last word goes to Stephen Hunter, I dont play Golf and therefore I have no interest in selling the company.
All of which could be taken as "I have no interest in selling the company at the current offer price".
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Old Feb 16, 21, 1:33 pm
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Could/Should Westjet buy Air Transat ?

Westjet has historically had difficulties with the ex-Quebec market share. Almost nobody in QC buys Westjet vacations to Sun destinations, because that involves a connection via Toronto.

Buying Air Transat could help Westjet gain a foothold in QC.
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Old Feb 16, 21, 2:19 pm
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Originally Posted by hoipolloi View Post
Westjet has historically had difficulties with the ex-Quebec market share. Almost nobody in QC buys Westjet vacations to Sun destinations, because that involves a connection via Toronto.

Buying Air Transat could help Westjet gain a foothold in QC.
Such a deal would take time to finalize. Moreover , there would certainly be fewer antitrust issues.
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Old Feb 16, 21, 6:33 pm
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Originally Posted by hoipolloi View Post
Westjet has historically had difficulties with the ex-Quebec market share. Almost nobody in QC buys Westjet vacations to Sun destinations, because that involves a connection via Toronto.

Buying Air Transat could help Westjet gain a foothold in QC.
Yes, they should. After buying it they need to be very careful to not do anything to the customer experience that would cause Air Transat to not be Air Transit in the eyes of the consumer.

WestJet is not successful in Quebec because they don't understand the cultural aspects of selling to that market. If WestJet can't figure out Quebec it has little hope of figuring out how to sell into Continental Europe, Asia or Latin America.

AirTransat has an Airbus fleet and a different pilot pool. It should keep that. Focus on having a Montreal hub and Quebec city and Ottawa as focus cities and drop any hub operations out west. WestJet and AirTransat can then codeshare with each other.
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Old Feb 17, 21, 8:37 am
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Maybe we should wait until AC/Air Transat deal is formally terminated before speculating on a WestJet buy.

While the current deal is no longer binding it hasn't been terminated either and could be amended.
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