"WestJet has been challenged by all this diversification that's been crunched into this very short space of time", said Robert Kokonis, president of Toronto-based consulting firm AirTrav Inc.
Onex shares inched lower on the Toronto Stock Exchange.
The deal comes as WestJet's share price and profitability have declined in recent years and Onex has yet to outline its plans for the carrier.
Onex Partners, Onex's private equity platform, will oversee the deal.
WestJet chief executive Ed Sims, who will remain CEO, said "there are no job losses planned as a direct outcome of this transaction".
Other aerospace investments include Aerosystems, bought from Boeing in 2005 and sold in 2014, a stake in catering business Sky Chefs and a less successful investment in Hawker Beechcraft. A freshly expanded Flair Airlines, soon-to-launch Canada Jetlines Ltd., and Air Canada's low-cost Rouge are all crowding the budget airspace that WestJet has flown into with its 11-month-old, ultra-low-cost Swoop subsidiary.
WestJet Chief Executive Ed Sims said on BNN that the deal will allow the company to execute on its long-term growth strategy without the constraints of quarterly scrutiny.
Shares of WestJet Airlines Ltd surged as much 63.3% to C$30.24 - highest since March 2015. "You can buy Onex shares on the open market, but they would no longer hold WestJet shares". The airline's board has urged shareholders to vote in favor.
Completion of the transaction is subject to a number of conditions, including court, regulatory and shareholder approvals.
"I am particularly pleased that WestJet will remain headquartered in Calgary and will continue to build on the success that our 14,000 WestJetters have created", WestJet Founder Clive Beddoe said.
"WestJet is renowned internationally for its unparalleled guest experience and employee culture".
"We do not believe this transaction dramatically alters the competitive landscape, at least negatively", Canaccord Genuity analyst Doug Taylor said.
A spokesman for Delta Air Lines said the proposed transaction does not impact plans to implement a U.S-Canada trans-border joint venture with WestJet.
Twenty years ago the firm teamed up with American Airlines parent company AMR Corp.in a hostile $1.8-billion bid plus the assumption of debt to acquire and merge Canadian Airlines - then the country's second-biggest carrier - and Air Canada.
CIBC Capital Markets and BofA Merrill Lynch were the financial advisers to WestJet, while Barclays, Morgan Stanley and RBC Capital Markets advised Onex.