(Reuters) – Canada’s second-biggest carrier, WestJet Airlines Ltd, on Monday accepted a C$3.5 billion ($2.6 billion) cash buyout offer from private equity group Onex Corp, sending the carrier’s shares surging 63% in Toronto trading.

The deal is the largest private equity acquisition of an airline, according to Refinitiv data.

WestJet has had a rough start to 2019 as the worldwide grounding of Boeing 737 Max jets forced it to suspend its full-year outlook in March. The company has struggled with costs as its workforce unionized, while it added international routes and launched its budget carrier, Swoop.

Onex first approached WestJet’s board in March and conducted a strategic review. The private equity firm is not new to investing in the aerospace industry – it bought Spirit Aerosystems from Boeing Co in 2005 and exited its investment in 2014, having made $3.2 billion.

Onex shares inched lower on the Toronto Stock Exchange.

Onex tried to buy Air Canada in 1999 as part of an effort to merge two Canadian carriers, but that attempt failed.

Air Canada Chief Executive Calin Rovinescu declined to comment on the latest deal, telling Reuters “it’s business as usual,” on the sidelines of the Air Transport Action Group conference in Montreal. Air Canada shares jumped 5.5 percent, while the broader Canadian stock index was down 1%.

The Onex bid comes at a time when private equity is taking off in aviation.

Last week, low-cost Latin American airline Viva Air received a $50 million investment from U.S. capital fund Cartesian Capital Group that it will direct toward expansion.

The parent company of Montreal-based Air Transat has said it is in talks with more than one party regarding a potential transaction, although it is not yet clear what group might buy it.

The WestJet purchase will be led by Onex Partners, Onex’s private equity platform focused on larger investments. The airline’s board has urged shareholders to vote in favor.

The deal is subject to a number of conditions, including court and shareholder approval and receipt of certain regulatory approvals, including under the Canada Transportation Act.

Founded in 1984 and headquartered in Canada, Onex manages C$31 billion of assets.

“We do not believe this transaction dramatically alters the competitive landscape, at least negatively,” Canaccord Genuity analyst Doug Taylor said.

“In our view, a private equity owner of an airline is likely to remain rational with respect to its approach to yields and profitability vs. market share.”

In February, WestJet announced plans to scale back capacity growth to cut costs and attract higher-paying customers to turn it around after a difficult 2018.

The deal, which has a value of $5 billion including debt, is expected to close in the latter part of this year or early next year.

AltaCorp analyst Chris Murray said it may take until 2020 to see a potential close to the transaction because of the “significant number of steps required between now and the close of any transaction, with a number of interested stakeholders expected to weigh in on the merits of the acquisition.”

CIBC Capital Markets and BofA Merrill Lynch were the financial advisers to WestJet, while Barclays, Morgan Stanley and RBC Capital Markets advised Onex.

Shares of WestJet Airlines Ltd surged as much 63.3% to C$30.24 – highest since March 2015. It was the second-most active stock in Toronto exchange.

Up to Friday’s close, WestJet shares had fallen 5.5% in the last 12 months while Air Canada shares gained 58%. American rival United Continental Holdings, the company that owns United Airlines, rose 28% in the same period.

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