Government of Canada has approved the acquisition of Sunwing Vacations and Sunwing Airlines by WestJet Airlines Ltd.

One year ago, Canadian airline WestJet Group, owned by private equity firm Onex Corp, expressed interest to buy leisure rival Sunwing Airlines for an undisclosed amount as it looked to tap into a rebound in air travel, in the post Pandemic era. 

• On 2nd of March , WestJet and Sunwing had announced that they could reach a definitive agreement under which the WestJet Group of companies will acquire Sunwing Vacations and Sunwing Airlines.
• On April 8, 2022, WestJet Airlines Ltd. and Sunwing Travel Group notified the Minister of Transport that WestJet proposes to acquire Sunwing Vacations and Sunwing Airlines. This notification was in accordance with the mergers and acquisitions provisions of the Canada Transportation Act.

At that time, the Minister of Transport had determined that the transaction raises public interest considerations related to national transportation. As such, a public interest assessment of the proposed transaction was planned with input from the Commissioner of Competition.

Transport Canada maintained that the protection of the consumers' interest is paramount,as it said, 

The Government of Canada’s priority is to ensure a safe and competitive air sector for travellers, workers and communities. It is also committed to supporting Canada’s aviation industry, while creating good, middle-class jobs for Canadians and building an economy that works for everyone.

Today, the Canadian Minister of Transport, Omar Alghabra, announced that following Transport Canada’s assessment of the public interest, which incorporated the findings of the Commissioner of Competition, and consultations with Canadians, consumer protection groups, unions and industry, the Government of Canada has approved the acquisition of Sunwing Vacations and Sunwing Airlines by WestJet Airlines Ltd., subject to strict terms and conditions that are in the interest of Canadians.

Transport Canada also mentioned in its release , 

The decision to approve this acquisition was not taken lightly, especially considering the delays and bottlenecks experienced by travellers last summer, as well as the customer service and communications challenges by Sunwing during the recent holiday season. In determining the proposed purchase is in the public interest, the government considered a broad range of factors, such as levels of service, social and economic implications, the financial health of the air transportation sector, and competition.  

Given the current air sector landscape, it was important to ensure that the final agreement offered the best possible outcome for Canadians. The acquisition will help maintain the stability of the sector as Sunwing will continue to provide more affordable vacation packages to Canadians, while being financially supported by WestJet.

• WestJet has a all Boeing fleet of 101 aircraft , that has 91 narrowbody B737 -NG/Max models and 06 widebody B787 Dreamliners.
• Sunwing Airlines has a total of 25 Narrowbody B737 aircraft that include 19 NG models and 06 Max models.
• Sunwing company is 51 per cent owned by Hunter and his family, with the other 49 per cent owned by TUI Group.

Terms and Conditions 

The acquisition will also result in enforceable terms and conditions intended to protect the interests of travellers. These strict terms and conditions include:

• Extending Sunwing vacation package offerings to five new Canadian cities;
• Maintaining capacity on routes most affected by the merger;
• Increasing regional connectivity;
• Improving baggage handling for better passenger experience;
• Maintaining a vacations business head office in the Toronto area and a regional office in the Montreal area for a minimum of five years;
• Increasing net employment by 20 per cent over three years in the Toronto office;
• Ensuring better passenger experience by investing in IT technology solutions to improve Sunwing’s communications;
• Supplying airfare data on vacation packages for monitoring of post-acquisition price trends; and
• Gradually ending Sunwing’s seasonal leasing practice to protect Canadian jobs.

The Government of Canada is also working on significant reforms to the Air Passenger Protection Regulations to ensure passenger rights are even more protected. These changes will place Canada at the forefront of passenger protections globally and, together with other steps to be taken, will help prevent the frustrating experiences of passengers last summer and over the holiday season.

Omar Alghabra , Minister of Transport said ,

“Today's decision was not taken lightly, especially in light of everything that happened over the holidays for those who flew with Sunwing. After considering the pros and cons, we have made the decision that will allow Sunwing to continue to provide affordable vacation packages to Canadians, create more good jobs, and protect current jobs as well as Canadians who have already purchased tickets. The agreement will also be accompanied by strict terms and conditions to ensure the public interest, including with regard to competition, connectivity and baggage handling.”

Transport Canada's Quick facts

• The assessment of the public interest involved rigorous analysis and consultations with Canadians and stakeholder groups. Online public consultations ran from May to July 2022.

• In the absence of this acquisition, Canada’s air transport sector could have faced greater instability, including job losses, a significant reduction of affordable vacation offerings, negative impacts on passengers, and the Government not being repaid sizable loans.

• Sunwing is a privately owned travel company founded in 2002 with headquarters in Toronto and a regional office in the Montreal area. Sunwing currently employs approximately 2,200 people.

 Source : Transport Canada