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On February 16th , 2022 , "Alexis von Hoensbroech" took over as CEO and February 24, 2022 saw Ex-CEO and Chairman of British Airways - "Álex Cruz" appointed to the Board of Directors of WestJet , and now , another major development for WestJet , where Toronto-based rival Sunwings Airlines and Sunwing Vacations is going to be a part of it's group.
On 2nd of March , WestJet and Sunwing announced that they have reached a definitive agreement under which the WestJet Group of companies will acquire Sunwing Vacations and Sunwing Airlines.
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They expect the transaction to bring together two distinctly Canadian travel and tourism success stories to deliver new travel options and greater value for travellers in the rapidly expanding leisure and work-from-anywhere travel markets. The combination will enable both companies to protect and create jobs and rebuild strength in the Canadian travel industry at a critical time.
However , everything is not out yet, the purchase price for the Sunwing deal , which is subject to government approval , was not disclosed to media. But current Sunwing shareholders will become equity holders in WestJet Group . About Sunwing, the company was 51 per cent owned by Hunter and his family, with the other 49 per cent owned by TUI Group.
"Following the close of the transaction, a new tour operating business unit will be created under the WestJet Group, to include both Sunwing Vacations and WestJet Vacations Inc., and will be led by Sunwing CEO Stephen Hunter. Sunwing’s current shareholders will become equity holders in the WestJet Group."
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As announced , the deal will look to comsolidate the Tour operator business , thanks to liberal travel norms in the endemic , Canadians will have access to more competitive airfares and affordable vacation packages through the combined strength of the companies.
Sunwing owns 45 hotels in tourism destinations throughout Mexico and the Caribbean. The company has a handful of 737s to service these locations, but has to lease an additional 30 planes through TUI to meet the demand of peak seasons.
As per the new structure, The tour operator business will be headquartered in Toronto, with a Quebec head office in Laval and the business will continue to market the Sunwing brand alongside WestJet Vacations. The WestJet Group will maintain its head office in Calgary.
We can witness fleet expansions in the near future , initially the WestJet Group of companies will expand to include 25 Boeing 737 aircraft of Sunwing Airlines. This will add increased capacity , dedicating otherwise seasonal aircraft to operate year-round in Canada , instead of Sunwing supplementing seasonal demand with imported aircraft , which translates into more jobs for Canadians.
“This is an exciting moment for WestJet, Sunwing and Canada’s travel industry,” said Alexis von Hoensbroech, CEO of WestJet. “We are bringing together two highly complementary businesses with powerhouse brands to strengthen our successful leisure business and deliver greater value to our guests.”
“This combination brings together Canada’s two original low-cost carriers and positions us to accelerate growth in value-oriented travel, already the fastest growing segment of the airline market."
"It creates new opportunities for our people, our operational partners and supports the recovery from a global pandemic that has been particularly challenging for the Canadian travel and tourism industry including local airports and businesses we work closely with,” added von Hoensbroech.
Stephen Hunter, CEO of Sunwing, said,
“We have a very promising future as part of The WestJet Group, which is one of the only airlines in the world that has not issued debt or equity during the pandemic, or accepted sector-specific government aid."
The combination of their strong balance sheet and growth trajectory with Sunwing’s unparalleled expertise in creating differentiated vacation packages will ensure the success of the new vacation division. My team and I are excited for the future, and we look forward to offering even more vacation destinations to Canadians at affordable prices.”
As a result of the resiliency created by the transaction, Sunwing expects to no longer require the pandemic-related Large Employer Emergency Financing Facility (LEEFF) Sunwing obtained from the Canadian government in early 2021, which will be fully repaid upon closing of the transaction.
Announcement says , WestJet Group and Sunwing intend to build on their collective history of constructive labour relations and will respect all arrangements with union and employee associations, including those in place and those currently under negotiation.
However , negotiations might take some time , as the union representing flight attendants at Sunwing Airlines says, it will fight tooth and nail to defend the rights and the jobs of its 800 members in the wake of news that WestJet is looking to acquire Sunwing Airlines.
“The pandemic has been very tough on our sector, and on our airline in particular,” said Rena Kisfalvi, President of Local 4055 of the Canadian Union of Public Employees (CUPE). “We’ll be keeping a close eye on this proposal, and our sole focus will remain on defending our members’ jobs and their livelihoods as this process moves forward.”
Barclays is acting as lead financial advisor to WestJet, with additional advisory provided by Morgan Stanley & Co. LLC, Canaccord Genuity Corp and RBC Capital Markets, LLC. Goodmans LLP is acting as legal advisor to WestJet.
