Business to be concluded
*** Update March 10, 2023: The federal government has approved WestJet’s purchase of Sunwing, with several conditions.
After 2 years of pandemic particularly difficult for airlines, we are witnessing a –necessary– consolidation of the aeronautical world.
In March 2022, WestJet entered into a definitive agreement to acquire Sunwing. A year later, the Canadian government announced this agreement. No amount has been disclosed at this time.
WestJet ‘s head office will remain in Calgary and the future offices of the WestJet/Sunwing group will be in Toronto. However, the Quebec head office will remain in Laval for at least five years, which is one of the conditions of the approval.
Sunwing employs 2,200 people and WestJet employs approximately 8,500.
Conditions for WestJet's purchase of Sunwing
The conditions are quite strict and will be as follows:
- Expand the Sunwing vacation package offering to five additional Canadian cities;
- Maintain capacity on the routes most affected by the merger;
- Increase connectivity between regions;
- Improve baggage handling for a better passenger experience;
- Maintain, for a minimum of five years, the head office of the vacation activity in the Toronto area and a regional office in the Montreal area;
- Increase net employment in the Toronto office by 20% over a three-year period;
- Ensure a better passenger experience by investing in IT solutions to improve Sunwing’s communications;
- Provide airfare data for vacation packages to track price changes after acquisition;
- Phase out Sunwing’s seasonal rental practice to protect Canadian jobs.
Some conditions are linked to follow the chaos of delays and cancellations during the 2022 holiday season.
As a result of these incidents, the Government of Canada is also preparing major reforms to the Air Travellers Security Regulations.
Sunwing offers scheduled and charter flights mainly from Montreal and Toronto. The winter period is important for them because they are concentrated towards sunny destinations. They have 26 airplanes that are used much more in winter than in summer.
For its part, WestJet has 182 aircraft that serve 108 destinations throughout the year. The base airports are primarily in Calgary, Toronto and Vancouver.
Before the pandemic, Air Canada had tried to buy Air Transat. But it didn’t work.
With this agreement, WestJet hopes to gain market share in the leisure travel sector, where Air Transat and Air Canada Vacations are located.
It will be interesting to see!
With WestJet Rewards
We are very curious to see how the Westjet Rewards program will work with the upcoming Sunwing acquisition.
Will we be able to use WestJet dollars for direct flights from Saguenay or Val-d’Or to Cuba in winter, with the future WestJet/Sunwing entity?
Stay tuned !