Aviation Analyst Says Onex Bid For Transat Highly Unlikely
Bruce Parkinson, Open Jaw
Aviation analyst Robert Kokonis says the prospect of WestJet suitor Onex making a bid for Transat is highly unlikely.
Kokonis, the co-founder and managing director of AirTrav Inc., was responding to a research note from Desjardins Securities analyst Benoit Poirier, who posited that with Onex at the helm of WestJet, an acquisition of Transat would be “a much more likely scenario.”
“Onex has publicly stated it is not bidding on Transat at present, nor does it intend to do so,” Kokonis told Open Jaw. “While in theory Onex’s position (or non-public position) could change, I don’t believe they would have interest. Between WS and TS there is a complete mismatch of assets (aircraft), company structure and focus, corporate culture, etc.”
Poirier’s logic is as follows: “We believe it would be easier for WestJet to acquire Transat once the company is integrated within Onex, as unlocking Transat’s full potential could take a few years (3-5 years) — which might be less suited for a public entity.”
Poirier is certainly correct that Transat has chafed under the demands required of a public company – including having to answer to sometimes impatient investment analysts every three months on quarterly results calls. Transat is trying to make fundamental changes to its business model that require a longer gestation. Going private is certainly an option, but Kokonis doesn’t think Onex will be the one to take Transat in that direction.
“I don’t think Gerry Schwartz would want to introduce the complexity and risk to a successful WestJet transaction that a Transat piece would represent,” Kokonis said.
Bruce Parkinson Editor-in-Chief
An observer and analyst of the Canadian and international travel industries for over 25 years, Bruce uses the pre-dawn hours to prepare a daily news and information package to keep industry members up to date.