A year ago, WestJet announced its plans to acquire Sunwing Vacations and Sunwing Airlines. Since then, the deal has been going through regulatory approval processes, as well as an assessment from the Competition Bureau.
Late last week, the deal moved one step closer to completion, as it received the support of the federal government, albeit with a handful of conditions. While the deal isn’t final just yet, it’s one step closer to being realized.
WestJet to Buy Sunwing
On March 10, 2023, the federal government gave its support to WestJet for acquiring Sunwing Airlines and Sunwing Vacations. This step marks one of the final hurdles to the deal finalizing, which is expected to happen in Spring 2023.
Following the global pandemic, WestJet’s acquisition of Sunwing represents consolidation in the Canadian travel industry as it recovers from the impacts of the past three years.
WestJet, which also owns the ultra-low-cost carrier Swoop Airlines, intends to offer further competitive airfares and affordable vacation packages with its acquisition Sunwing, challenging Air Canada’s dominant position in the market.
Currently, Sunwing Airlines offers flights from Canada to warm-weather destinations including the US, Mexico, the Caribbean, and Central America, as well as domestic routes at various points throughout the year.
Now, with the acquisition by WestJet, Sunwing’s otherwise seasonal aircraft can be operated year-round within Canada, achieving greater operational efficiencies with WestJet’s existing fleet and network.
Together, WestJet and Sunwing account for about 37% of non-stop capacity between Canada and Sun destinations. From Western Canada, they account for 72% of non-stop capacity to Sun destinations.
It’s worth noting that Air Canada had previously announced its intention to buy leisure-oriented airline Air Transat in June 2019, but eventually scrapped the deal due to difficulty with regulatory approvals from the European Commission.
Unlike the Air Canada/Air Transat deal, the WestJet/Sunwing merger isn’t subject to regulatory approval outside of Canada. Therefore, there shouldn’t be any further regulatory roadblocks to prevent the acquisition from proceeding.
Conditions Placed on Sunwing Acquisition
While the deal has now been given the green light to proceed by the federal government, it came with a number of conditions…
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