WestJet Aircraft Maintenance Engineers Begin Strike Action; Onex Corporation Announces Business Segments and Capital Investment Strategies

WestJet Airlines' aircraft maintenance engineers have initiated a strike, affecting the operations of the Canadian airline. This development follows the activities of Onex Corporation, which manages investments in private equity funds, private credit strategies, and liquid strategies for its shareholders, institutional investors, and high net worth clients. Onex operates in two main segments: Investing and Asset Management, with a focus on its Private Equity and Credit businesses.

WestJet Airlines (TSX: WJA) has initiated a strike by its aircraft maintenance engineers and other technical operations employees, leading to flight cancellations and affecting more than 250,000 travelers scheduled over the July long weekend [1]. This development comes after the Aircraft Mechanics Fraternal Association (AMFA) rejected a tentative agreement and served a strike notice, prompting the airline to cancel flights in a controlled manner [1].

The timing of the strike could not be more inconvenient, as it coincides with the busy July travel period, and it may be seen as an attempt to pressure the airline into accepting an unreasonable contract [1]. The strike follows a similar incident that occurred less than a week ago, causing disruptions to WestJet's operations [1].

Onex Corporation (TSX: ONEX), an investment firm that operates in two main segments – Investing and Asset Management – and focuses on private equity and credit businesses [2], manages WestJet Airlines. The ongoing strike could have significant implications for Onex, as it may negatively affect the airline's financial performance and reputation [3].

According to WestJet's announcement, approximately 25 flights have been canceled as of Thursday, June 27, and Friday, June 28 [1]. The impacted travelers total over 3,300 [1]. The airline is making efforts to reaccommodate all affected guests, but the scale of the disruption is significant [1].

Onex Corporation, which reported CAD 3.4 billion in assets under management as of December 31, 2022 [2], may need to consider various strategies to mitigate the financial impact of the strike on WestJet. These could include seeking insurance coverage, negotiating with the union, or exploring potential operational efficiencies [3].

The strike at WestJet is not an isolated incident in the aviation industry. In recent years, strikes by airline workers have become more frequent, and they can have significant economic and reputational consequences [3]. As such, it will be essential for Onex Corporation to closely monitor the situation and take proactive measures to protect its investment in WestJet.

References:

[1] WestJet. (2024, June 26). WestJet Initiates Flight Cancellations in Preparation for Potential Strike. Retrieved from https://finance.yahoo.com/news/westjet-initiates-flight-cancellations-preparation-025900312.html
[2] Onex Corporation. (n.d.). About Us. Retrieved from https://www.onex.com/en/about-us/
[3] Statista. (2023, March 28). Number of strikes in the aviation industry worldwide from 2017 to 2022. Retrieved from https://www.statista.com/statistics/1247055/number-strikes-aviation-industry-worldwide/