The Canadian government has approved the acquisition of leisure carrier Sunwing Airlines by the country’s second-largest carrier, WestJet. The deal, announced in March 2022, had been postponed following some pushback from the country’s Competition Bureau, citing a “substantial lessening or prevention of competition.”
However, now that WestJet has agreed to adhere to the bureau’s conditions, which include extending Sunwing’s vacation packages to five new Canadian cities and ending the leisure carrier’s seasonal leasing practice, the deal is set to materialize.
“Today’s decision was not taken lightly,” said Canadian Minister of Transport Omar Alghabra. “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 consolidation between both carriers follows a trend that’s been widespread in the global commercial aviation scene over the last decade. Airlines across the globe are merging or finding robust collaboration schemes to face increased competition.
In Canada, where operating an airline is challenging and expensive, it only makes sense to follow this tendency. With a small population spread over a vast geographic area, the Canadian market cannot support multiple operators. As a result, Air Canada keeps the highest market share, followed by WestJet, Air Transat, and Porter Airlines. In addition, new-entrant Flair Airlines joins the competition with an all-new low-cost model, operating with a fleet of new Boeing 737 MAX planes.
A Merger With Public Interest
Canada’s Minister of Transport also highlighted that “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.”
WestJet has guaranteed to keep a holiday business office in Toronto and Montreal for at least five years and increase net employment by at least 20% in its Toronto office. Therefore, the Canadian government sees this as a merger that meets the public interest.
As part of the agreement with the bureau, WestJet must also boost regional connectivity and maintain the current capacity on routes that the merger would impact. In other words, any routes Sunwing Airlines served must remain untouched.
“We are pleased that the regulatory review of the transaction is now complete,” said Angela Avery, WestJet’s Group Executive Vice-President and Chief People, Corporate & Sustainability Officer.
“We thank the Minister of Transport and the Commissioner of Competition, and the staff of Transport Canada, the Competition Bureau, and the Canadian Transportation Agency, for their efforts to review the transaction.”
Fleet Commonality is Key
With this integration between WestJet and Sunwing, the resulting airline will cement its place as Canada’s second-largest airline operating a common fleet of all-Boeing planes.
WestJet operates a robust fleet of 103 Boeing 737-700/800/MAX 8 and seven 787-9 Dreamliners, whereas Sunwing Airlines operates 38 Boeing 737-800/MAX 8s. The commonality between both fleets will result in a smoother and seamless integration between crews, technicians and ground handlers.
Founded in 1996, WestJet has grown from a small regional carrier to a top competitor in Canadian aviation, offering flights to more than 100 destinations in Canada, North America, the Caribbean, and Europe.
From its hub in Calgary, Alberta, the airline has grown to establish operating centers in Toronto and Vancouver, launching flights to popular destinations like Cancun, Las Vegas, Orlando, Puerto Vallarta, Los Angeles, New York, and London.
The airline maintains strong collaborations with Delta Air Lines. Both carriers have strong codesharing and interline agreements, allowing customers to seamlessly connect between the U.S. and Canada.