Big transaction in an industry shaken by the pandemic. WestJet and Sunwing Travel Group have entered into a definitive agreement allowing the WestJet group of companies to acquire Sunwing Vacations and Sunwing Airlines.
A new tour operator business unit will be created under the WestJet Group banner, which will include both Sunwing Vacations and WestJet Vacations, and will be led by Stephen Hunter, Sunwing’s CEO. “After experiencing strong growth, we were looking for opportunities to build on this momentum even before the pandemic hit. This transaction will provide us with the necessary tools”, underlined Homework Stephen Hunter.
The amount of the transaction was not disclosed. With a 51% stake from the Hunter family and 49% from the travel giant TUI Group, the owners of Sunwing will become “meaningful” shareholders of the WestJet group, owned by Onex. “I’m too young to spend my time playing golf. We could have opted for monetary compensation, but instead we want to capitalize on the potential arising from this transaction,” adds Stephen Hunter. The move to WestJet does not include the Blue Diamond hotel division, a portfolio of 34 owned or managed hotels with over 32,200 bed capacity, which remains 100% under separate ownership. Nor does it interfere with the code-share agreement between WestJet and Transat. “I can’t speak for them, but the WestJet–Transat deal doesn’t involve us. »
Quebec-Ontario Force
The combined strength of WestJet Vacations and Sunwing Vacations will create a tour operator led by Stephen Hunter and his team offering complementary East-West Canada, with increased reach in Ontario and Quebec. The tour operator’s head office will be located in Toronto, with regional headquarters in Quebec, and the company will continue to market the Sunwing brand alongside WestJet Vacations. “WestJet is little known and established in Quebec. This adds to the development potential of our regional head office in Laval. This Quebec headquarters is based on an investment of 15 million and contains sufficient space to increase the operational activity of the tour operator and the call center. Occupying the number 1 spot for flights between Canada and sun destinations, “we will now also create vacation packages and travel opportunities across North America, and even to Europe”, says Stephen Hunter .
As for the air component, the inclusion of Sunwing Airlines “will add capacity, dedicating otherwise seasonal aircraft to year-round operation in Canada, rather than Sunwing supplementing seasonal demand with imported aircraft, which will result in more jobs,” the statement read. WestJet Group and Sunwing emphasize that they will honor all agreements with unions and employee associations, including those in place and those under negotiation.
Flight attendants on the defensive
In response, the union representing Sunwing Airlines flight attendants nevertheless warned that it “will fight tooth and nail” to defend the rights and jobs of its 800 members. “We will be watching this proposal closely, and our sole focus will remain on defending our members’ jobs and livelihoods as this process moves forward,” said Rena Kisfalvi, President of Canadian Union of Employees Local 4055. public (CUPE). A new collective agreement was ratified in June 2021.
Sunwing also clarifies that due to the resiliency created by the transaction, it expects to no longer require the Large Employer Pandemic Emergency Funding Facility obtained from the federal government in early 2021, “which will be fully repaid at the closing of the transaction”.
The deal, which is subject to regulatory approvals, including that of the Competition Bureau, is expected to close later this year.