WestJet’s acquisition of Sunwing Airlines cleared for takeoff by Ottawa | Globalnews.ca

WestJet Group’s takeover of vacation-focused rival Sunwing Airlines has been approved by Canada’s transportation minister, clearing the runway for a major shakeup in the airline industry.

Omar Alghabra gave the Liberal government’s official sign-off on the deal on Friday.

First announced in March 2022, the deal will see Calgary-based WestJet acquire Toronto’s Sunwing as well as its tour operation business.

Financial terms of the acquisition between the two privately held airlines have not been disclosed, though Sunwing shareholders would gain a stake in WestJet’s business.

Under the agreement, WestJet will create a new tour operator unit headed by Sunwing CEO Stephen Hunter that includes Sunwing Vacations and WestJet Vacations as separate brands.

The acquisition would increase WestJet’s flight footprint to sun destinations and resorts.

The federal Competition Bureau has raised concerns about the merger, arguing the deal will likely result in higher prices and decreased service for Canadians.

The decrease in competition, particularly in the vacation space where the airlines have overlapping routes, will affect the rates Canadians are offered for getaways, the watchdog said in a letter to Alghabra last fall.

The bureau said that the two airlines represent two of the four largest providers of integrated vacation packages in Canada and are the two biggest players connecting Western Canada to sun destinations.

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WestJet plans to buy Sunwing Airlines

WestJet has said the acquisition will boost its overall flight capacity, as it can fly Sunwing jets on routes outside of the airline’s traditional holiday schedules. The company has also said it will maintain operations at Sunwing’s Toronto and Laval, Que., offices.

Labour union Unifor had pushed the federal government to include job protections for Sunwing employees as part of the deal’s approval. WestJet has argued the expanded flying opportunities with Sunwing’s jets will create more jobs.

Earlier this year, WestJet announced plans to refocus its operations to primarily service routes out of Western Canada.

The announcement comes as Canada’s airline industry struggles to regain footing after three years of disruptions in the pandemic.

Both airlines are coming off a rough holiday season as well, which saw numerous flight delays and cancellations, chaos at airports and hundreds of Sunwing passengers stranded in Mexico.

— with files from The Canadian Press

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