WestJet Prepares for IPO After Strategic Stake Sale to Global Airlines

WestJet’s Strategic Shift: A Potential IPO on the Horizon

Canada’s second-largest airlines, WestJet, is signaling a potential return to the public market, a move that could reshape its future and the nation’s aviation landscape. This development comes after a significant strategic maneuver by its majority owner, Onex Corp., a Canadian private equity firm. In a calculated decision, Onex sold a 25% minority stake in the airline to a consortium of global aviation giants: Delta Air Lines, Korean Air, and Air France-KLM. This sale not only allowed Onex to recoup its initial investment but also set the stage for WestJet’s next chapter of growth and expansion.

The notion of an Initial Public Offering (IPO) has been floated by Onex leadership as a “natural next step” for the Calgary-based carrier. Since taking WestJet private in a CAD 3.5 billion deal in 2019, Onex has steered the airline through a significant restructuring. This overhaul involved a sharpened focus on its Western Canadian hub, an expansion of international and transcontinental routes, and a strategic exit from less profitable markets in Eastern Canada. The recent partnership with established international airlines further solidifies this strategy, enhancing WestJet’s global connectivity and competitive edge.

The potential IPO is more than just a financial transaction; it represents a pivotal moment for WestJet. The capital-intensive nature of the airline industry, particularly with ambitious fleet modernization plans on the books, makes a public listing a logical move to fuel future growth. As we delve into the details of the recent stake sale, the strategic rationale behind it, and the implications of a public offering, it becomes clear that WestJet is positioning itself for a new era of expansion and market presence.

De-Risking and Strategic Alliances: The 25% Stake Sale

The sale of a quarter of WestJet to Delta Air Lines, Korean Air, and Air France-KLM was a multi-faceted strategic success for Onex Corp. The transaction, which closed on October 22, 2025, was valued at $550 million. It effectively de-risked Onex’s investment by allowing the firm to recover the funds it initially put into the 2019 privatization, all while maintaining a commanding 75% majority ownership and control of the airline. This move demonstrates a shrewd financial strategy, securing the initial investment while retaining the potential for future upside.

The new ownership structure is broken down with Onex Corp. holding 75%, Delta Air Lines with 12.7%, Korean Air with 10%, and Air France-KLM holding the remaining 2.3%. Initially, Delta acquired a 15% stake before transferring a portion to its joint venture partner, Air France-KLM. This distribution is not just about capital; it’s about forging powerful alliances. By bringing these specific carriers into the fold, WestJet gains partners that are, as described by Onex Partners’ head Tawfiq Popatia, “widely regarded as among the best-performing and most innovative airlines in the world.”

The benefits of this new partnership extend beyond the boardroom. Deeper cooperation is expected to yield significant operational synergies and cost reductions. A key area for this collaboration will be in aircraft maintenance and fleet management, a crucial factor given WestJet’s substantial aircraft orders. Aligning with members of the SkyTeam Airline Alliance also positions WestJet more competitively against its main rival, Air Canada, which is part of the Star Alliance network.

“An IPO would be a natural next step because airlines are very large, capital-hungry enterprises,”, Tawfiq Popatia, Head of Onex Partners.

Fueling the Future: Fleet Modernization and Growth

A primary driver for considering an IPO is WestJet’s ambitious fleet expansion and modernization program. The airline is in the process of significantly growing its operational capacity, a capital-intensive endeavor that a public listing could help finance. WestJet has a substantial order with Boeing that includes sixty B737-10s and seven B787-9s, with options for an additional 25 and four units, respectively. This order is set to double the airline’s widebody fleet and brings its total order book to 128 Boeing aircraft.

As of late 2025, WestJet’s fleet already consists of 193 aircraft, with 123 more on order. This expansion is a clear indicator of the airline’s growth strategy, focusing on both domestic and international routes from its Western Canadian stronghold. The airline’s strategic shift to concentrate on its Calgary hub aligns with the region’s growing economy. Calgary International Airport served 18.9 million passengers in 2024, highlighting the significant potential for expansion in a market with a burgeoning economy.

The new strategic partners are expected to play a role in this growth. The collaboration could lead to optimized aircraft costs and more efficient maintenance schedules, which is vital when managing a growing and modernizing fleet. The infusion of capital from an IPO would provide the necessary financial runway to see these ambitious fleet plans through, ensuring WestJet has the modern, efficient aircraft needed to compete on a global scale and expand its network into new markets in Asia, Europe, and the Americas.

Conclusion: Charting a Course for Public Skies

The strategic sale of a minority stake has proven to be a masterstroke by Onex, securing its investment while simultaneously strengthening WestJet’s strategic position through powerful new alliances. The move has paved the way for the airline’s next logical evolution: a return to the public markets. An IPO, potentially within the next couple of years, appears to be the centerpiece of Onex’s long-term vision for the carrier. This step would provide the capital necessary to fund its significant fleet expansion and solidify its competitive standing in the North American and international aviation markets.

Looking ahead, WestJet’s trajectory seems set for significant growth. The combination of a focused Western Canadian strategy, a modernized and expanding fleet, and deep partnerships with global airline leaders creates a formidable foundation. A successful IPO would not only fuel this growth but also mark the culmination of a strategic turnaround that began with its privatization in 2019. For the Canadian aviation industry and for travelers, a stronger, publicly-traded WestJet promises increased competition and enhanced global connectivity for years to come.

FAQ

Question: Is WestJet going public? Answer: WestJet’s majority owner, Onex Corp., has indicated that an Initial Public Offering (IPO) is a “natural next step” for the airline, possibly within the next couple of years.

Question: Who owns WestJet now? Answer: As of late 2025, Onex Corp. is the majority owner with a 75% stake. A consortium of airlines holds the remaining 25%, with Delta Air Lines owning 12.7%, Korean Air 10%, and Air France-KLM 2.3%.

Question: Why did Onex sell a stake in WestJet? Answer: The sale allowed Onex to recoup its initial investment from the 2019 privatization deal while retaining majority control. It also brought in strategic airline partners to foster deeper cooperation, reduce costs, and enhance WestJet’s global network.

Sources: ch-aviation