WestJet statement on Goverment funding for AC

Discuss topics relating to airlines.

Moderators: sky's the limit, sepia, Sulako, North Shore

User avatar
Old fella
Rank 10
Rank 10
Posts: 2394
Joined: Mon Jan 29, 2007 7:04 am
Location: I'm retired. I don't want to'I don't have to and you can't make me.

Re: WestJet statement on Goverment funding for AC

Post by Old fella »

Well if WJ isn’t interested in terms and conditions of taxpayer dollars and they(WJ) think there are better ways through their own resources, good on WJ I would venture. Let the chips fall where they may as time progresses.
---------- ADS -----------
 
redbusdriver
Rank 2
Rank 2
Posts: 63
Joined: Mon Mar 23, 2020 2:32 pm

Re: WestJet statement on Goverment funding for AC

Post by redbusdriver »

WestJet CEO Ed Sims says the federal government’s aid package for Air Canada could be “problematic” unless his company gets equitable treatment, as talks over pandemic relief continue between Ottawa and Canadian carriers.
https://canadianaviationnews.wordpress. ... s-drag-on/

he's more indecisive than doug ford
---------- ADS -----------
 
Cavalier44
Rank 4
Rank 4
Posts: 205
Joined: Mon Jun 10, 2013 6:32 am

Re: WestJet statement on Goverment funding for AC

Post by Cavalier44 »

redbusdriver wrote: Thu Apr 15, 2021 2:54 pm
WestJet CEO Ed Sims says the federal government’s aid package for Air Canada could be “problematic” unless his company gets equitable treatment, as talks over pandemic relief continue between Ottawa and Canadian carriers.
https://canadianaviationnews.wordpress. ... s-drag-on/

he's more indecisive than doug ford
Indecisive in what way? If WestJet is going to receive government support, they will understandably want it to be on the same terms as Air Canada's deal. With the government set to take roughly a 10% stake in their main competitor, I'm sure that WestJet is concerned that they're going to be put in a position where they're competing with a now government-backed Air Canada, which controls nearly half of the domestic Canadian market share.

If I were in Ed Sims' shoes, I know that I'd want assurances that whatever aid WestJet was to receive would result in the government also taking a similar equity stake (assuming that were palatable to Onex), or granting some other type of offset in order to stop Air Canada from gaining an unfair competitive advantage.
---------- ADS -----------
 
rudder
Rank 11
Rank 11
Posts: 3848
Joined: Wed Mar 08, 2006 12:10 pm

Re: WestJet statement on Goverment funding for AC

Post by rudder »

Cavalier44 wrote: Thu Apr 15, 2021 3:26 pm
Indecisive in what way? If WestJet is going to receive government support, they will understandably want it to be on the same terms as Air Canada's deal. With the government set to take roughly a 10% stake in their main competitor, I'm sure that WestJet is concerned that they're going to be put in a position where they're competing with a now government-backed Air Canada, which controls nearly half of the domestic Canadian market share.

If I were in Ed Sims' shoes, I know that I'd want assurances that whatever aid WestJet was to receive would result in the government also taking a similar equity stake (assuming that were palatable to Onex), or granting some other type of offset in order to stop Air Canada from gaining an unfair competitive advantage.
Does WJ/ONEX have assets to put up for security? Does WJ/ONEX have the ability to offer an equity stake at a discount with upside potential for ROI?

I am certain an unsecured loan is available to offer ticket refunds on the same terms as AC. LEEFF loans are also available.

And don’t forget the restrictions on dividends, stock buy backs, and Executive compensation.

Have at ‘er.
---------- ADS -----------
 
Cavalier44
Rank 4
Rank 4
Posts: 205
Joined: Mon Jun 10, 2013 6:32 am

Re: WestJet statement on Goverment funding for AC

Post by Cavalier44 »

rudder wrote: Thu Apr 15, 2021 4:18 pm
Cavalier44 wrote: Thu Apr 15, 2021 3:26 pm
Indecisive in what way? If WestJet is going to receive government support, they will understandably want it to be on the same terms as Air Canada's deal. With the government set to take roughly a 10% stake in their main competitor, I'm sure that WestJet is concerned that they're going to be put in a position where they're competing with a now government-backed Air Canada, which controls nearly half of the domestic Canadian market share.

If I were in Ed Sims' shoes, I know that I'd want assurances that whatever aid WestJet was to receive would result in the government also taking a similar equity stake (assuming that were palatable to Onex), or granting some other type of offset in order to stop Air Canada from gaining an unfair competitive advantage.
Does WJ/ONEX have assets to put up for security? Does WJ/ONEX have the ability to offer an equity stake at a discount with upside potential for ROI?

I am certain an unsecured loan is available to offer ticket refunds on the same terms as AC. LEEFF loans are also available.

And don’t forget the restrictions on dividends, stock buy backs, and Executive compensation.

Have at ‘er.
I don't have the answers to those questions, and I'm sure that WestJet and Onex are trying to determine the answer to each of those as well, and whether or not they would result in an acceptable deal for the company.

My response was to the post above, where the poster claimed that Ed Sims was indecisive. On the contrary, I think that his public statement is understandable - he wants to be sure that there's going to be a level playing field going forward for all the airlines vis-a-vis their relationship with the government.

If anything, I think there's probably more of a "have your cake and eat it too" mentality at play here, which may explain why WJ/Onex have not yet secured a deal. They want to be sure that there are going to be comparable terms at the negotiating table, but on the other hand, as you say Rudder, what are they willing to offer up in return? Time will tell.
---------- ADS -----------
 
goingnowherefast
Rank (9)
Rank (9)
Posts: 1948
Joined: Wed Mar 13, 2013 9:24 am

Re: WestJet statement on Goverment funding for AC

Post by goingnowherefast »

I think it was a polite way of beating around the bush and say that WJ doesn't want the strings attached to those loans. Basically telling the government negotiators that they can take those conditions and shove it because they're better off alone.
---------- ADS -----------
 
Post Reply

Return to “General Airline Industry Comments”