(Montreal) WestJet Group’s acquisition of Sunwing’s core airline and vacation divisions became official on Monday, a deal that marks a major consolidation in Canada’s aviation market after a tumultuous year for travellers.
First announced in March last year, the transaction bolsters WestJet’s vacation package offerings by adding tour operator services to its offering, although the two brands will “initially” be operated separately.
However, the two airlines will go from competitors to collaborators, with the merger positioning Sunwing as a “essential pillar of the WestJet group”, the latter said in a press release.
The move expands the reach of WestJet, based in Calgary, eastern Canada, particularly in the tour operator sector, where it aims to compete with Air Canada and Transat AT, both of Montreal.
The federal government approved WestJet’s takeover of Sunwing in March, despite a warning from the Competition Bureau. He believed that the acquisition by Canada’s second-largest airline would likely lead to higher prices and lower services, especially with regard to packages.
In authorizing the transaction, Ottawa attached conditions that include expanding Sunwing packages to five new cities, maintaining capacity on the most affected routes and maintaining a vacation division business headquarters. in Toronto, in addition to a regional headquarters in Montreal, for at least five years.
The deal adds some 2,000 employees and 18 Boeing 737s to WestJet Airlines’ fleet of 109 aircraft, made up entirely of Boeing planes (not including its regional service, WestJet Encore), according to Airfleets.net.
Financial terms of the acquisition were not disclosed.
Stephen Hunter, former CEO of Sunwing Vacations, has been named CEO of WestJet Group Vacations. Mr. Hunter will be responsible for all tour operator activities and packages for Sunwing Vacations and WestJet Vacations.
“The combination of our complementary businesses marks an important step that will allow us to accelerate our growth plans and provide Canadians with more affordable vacations in more destinations than ever before,” Hunter said in a statement.
Both companies are privately held, with parent Sunwing Travel Group majority-owned by the Hunter family and WestJet owned by Toronto-based investment manager Onex, which closed the airline’s capital when it was bought for $5 billion in 2019. .
WestJet and Sunwing account for approximately 37% of seat capacity on nonstop flights between Canada and sun destinations. This figure climbs to 72% between Western Canada and sun destinations, calculated the Competition Bureau in a report submitted in October to the Minister of Transport.