Higher airfares are likely upshot of Sunwing WestJet integration, experts say

MONTREAL –

WestJet’s determination to carry Sunwing Airlines beneath its major banner may imply much less service and better fares – significantly in Western Canada and smaller cities throughout the nation, consultants say.

Sunwing informed workers it was being absorbed by its new proprietor on Wednesday, lower than per week after WestJet introduced plans to shutter low cost subsidiary Swoop.

Given the narrower flight choices and pricier tickets more likely to consequence from the merger of former opponents, the newest transfer is “not good news” for customers seeking to head to hotter getaways, stated John Gradek, who teaches at McGill University’s aviation administration program.

“There will be a reduction in air services and there will be a corresponding increase in prices,” Gradek stated.

WestJet and Sunwing comprise 37 per cent of seat capability on direct flights to solar locations, and 72 per cent from Western Canada, in keeping with an October report from the Competition Bureau.

WestJet accomplished its acquisition of Sunwing’s major airline and trip divisions final month in a significant consolidation of the Canadian aviation market. As a situation of Ottawa’s sign-off on the deal, the events pledged to take care of capability on probably the most affected routes and maintain each the Sunwing Vacations head workplace in Toronto and a regional one in Montreal for at the least 5 years.

WestJet confirmed in an electronic mail that Sunwing Vacations will proceed as a separate entity, setting the stage for the Calgary-based provider to fly Sunwing tour package deal prospects to their resort spots.

Sunwing Vacations has been a value chief within the Canadian market, stated Gradek. “The question is, how much does WestJet charge Sunwing Vacations for the use of those airplanes?”

But aviation advisor Rick Erickson stated he thinks that rival carriers will guarantee a wholesome mixture of competitors for solar locations, with some fares barely affected.

“I don’t think there’s going to be a great deal of change, largely because consumers are fairly savvy, the Competition Bureau’s out there watching and there are other players in the market,” he stated.

“Two big ones, Air Canada and Transat, are going to make sure that no glory profits are going to accrue to WestJet because of this,” Erickson stated, including that six-year-old low cost provider Flair Airlines can also be changing into “fairly aggressive.”

Nonetheless, travellers in smaller markets starting from Saskatoon to St. John’s, N.L. might should shell out extra, stated Erickson.

“There could be some issues in those marketplaces,” he stated, akin to Kelowna and Prince George in B.C., Fredericton and Moncton in New Brunswick, and Waterloo and Windsor in southern Ontario. Fares to widespread trip spots have already been on the rise.

Out of greater than 180 solar locations – largely in Mexico, California, Arizona, Florida and the Caribbean – costs went up in 87 per cent of instances between March 2022 and March 2023, in keeping with aviation information agency Cirium.

The will increase weren’t small. Fares from Canada to Key West, Fla., rose 23 per cent, and 27 per cent to Mexico City. They elevated 28 per cent to Aruba and 40 per cent to Trinidad and Tobago. And they jumped by practically a 3rd for St. Petersburg, Fla., St. Lucia and St. Vincent.

Sunwing Airlines president Len Corrado informed workers in a memo final week that the mixing with WestJet will happen inside two years as a part of a technique to unlock higher scale and development alternatives.

WestJet spokeswoman Julia Kaiser stated in an electronic mail Saturday: “Our immediate focus remains on the integration of Swoop’s highly successful business model across WestJet’s operations.”

Workers have been much less assured, particularly round union seniority. Other considerations embrace dwelling bases and dealing circumstances.

“Both pilot groups are naturally a little anxious on mergers,” stated Mark Taylor, president of Unifor’s Sunwing pilots’ group.

Acquisitions can elevate huge questions as every firm’s staff search comparable seniority, pay ranges and advantages. Taylor and others pointed to the acrimony that erupted after Air Canada acquired Canadian Airlines in 2001.

“People on either side were so angry it took a decade for the hostility to subside,” he stated in an electronic mail. “One bad arbitration can destroy some of the careers of one group.”

Under a letter of understanding within the collective settlement ratified by WestJet and Swoop pilots this month, the corporate and the Air Line Pilots Association word the potential of “changes required to integrate the Sunwing’s pilots into the WestJet/Swoop bargaining unit,” in keeping with a duplicate of the deal obtained by The Canadian Press.

This report by The Canadian Press was first revealed June 19, 2023.