CALGARY—WestJet customers reacted with caution and optimism to the news that the Calgary-based airline will be sold to a company owned by Toronto billionaire Gerry Schwartz.
Under the $5-billion agreement, Schwartz’s private-equity firm Onex Corporation will pay $31 per share if the deal is approved by shareholders at a meeting in July. Shares in the airline closed at $18.52 on Friday.
Shareholder Andrew Gill’s reaction was an easy one: Sell.
“You take your profit and you move on,” said Gill, a St. Catharine’s, Ont., firefighter and mortgage agent who is optimistic the deal will improve the airline’s service.
“My wife and I are huge fans,” he said, adding that they will continue to fly WestJet and have a flight booked next week from Toronto to Las Vegas. “We’re kind of hoping that WestJet will remain the great company we know and love.”
The airline’s shares spiked Monday morning to $29.75 after news of the friendly deal broke, while Alberta Premier Jason Kenney took the opportunity to say the sale proves Onex is willing to invest in Alberta.
“The representative from Onex told me that their major investment in WestJet is partly a decision by that company, Onex, to bet on Alberta after I mentioned the job creation tax cut,” Kenney said Monday, referring to an election promise to cut corporate tax rates to stimulate the economy.
In the past six years, 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 by 2022. The first one was delivered earlier this year.
Coreen Calvert, manager at Calgary travel agency Travel Masters, said the sale came as a surprise. However, as long as the airline doesn’t change the way it operates, she said the sale should benefit consumers, not hurt them.
“It was a big shocker,” she said. “You just never know.”
Eric Denhoff, the retired deputy minister of Alberta’s climate change office who lives in Victoria but travels to Edmonton frequently, is worried that Westjet’s days are over as a Western Canadian icon.
“I’m concerned that Albertans and Western Canadians will feel, at an emotional level, that we’ve lost a major, iconic symbol of Western independence, culture and entrepreneurship,” Denhoff said in an email.
Even though headquarters will stay in Calgary where Westjet began operations in 1996, Denhoff is concerned more decisions will be made in Toronto, and that the company could be sold again in the future.
More than 80 per cent of Westjet employees own shares in the company, which amount to about 19 per cent of total shares, according to Westjet media relations.
Some consumers reacted with worry on social media over their Westjet rewards and credit cards, but the company told the Star that its rewards program and credit card partnership will not change.
Others tweeted concern over upcoming flights, but the company reassured customers that it will be business as usual — that includes Swoop, the WestJet-owned discount airline.
WestJet’s board of directors has unanimously recommended shareholders vote in favour of the deal in July.
With files from Canadian Press
Rosa Saba is a reporter/photographer with Star Calgary. Follow her on Twitter: @rosajsaba