WestJet’s acquisition of Sunwing Airlines cleared for takeoff by Ottawa | 24CA News
WestJet Group’s takeover of vacation-focused rival Sunwing Airlines has been accepted by Canada’s transportation minister, clearing the runway for a serious shakeup within the airline trade.
Omar Alghabra gave the Liberal authorities’s official sign-off on the deal in a press launch on Friday afternoon, noting the choice “was not taken lightly.”
First introduced in March 2022, the deal will see Calgary-based WestJet purchase Toronto’s Sunwing in addition to its tour operation business.
Alghabra connected various stipulations to the deal as situations for its approval geared toward addressing issues about decreased competitors and job losses because of the deal.
These embody extending Sunwing trip packages to 5 new Canadian markets, although these cities weren’t specified within the launch. Other situations embody investing in IT and baggage dealing with enhancements.
Financial phrases of the acquisition between the 2 privately held airways haven’t been disclosed, although Sunwing shareholders would achieve a stake in WestJet’s business.
Under the settlement, WestJet will create a brand new tour operator unit headed by Sunwing CEO Stephen Hunter that features Sunwing Vacations and WestJet Vacations as separate manufacturers.
The acquisition would improve WestJet’s flight footprint to solar locations and resorts.
The federal Competition Bureau has raised issues in regards to the merger, arguing the deal will seemingly lead to larger costs and decreased service for Canadians.
The lower in competitors, significantly within the trip house the place the airways have overlapping routes, will have an effect on the charges Canadians are supplied for getaways, the watchdog stated in a letter to Alghabra final fall.
But Transport Canada stated not approving the acquisition would have led to higher instability in Canada’s air sector, “including job losses, a significant reduction of affordable vacation offerings, negative impacts on passengers, and the Government not being repaid sizable loans.”
“After considering the pros and cons, we have made the decision that will allow Sunwing to continue to provide affordable vacation packages to Canadians, create more good jobs, and protect current jobs as well as Canadians who have already purchased tickets,” Alghabra stated in an announcement.
Ottawa’s stipulations for the deal state the mixed airways should keep capability on routes affected by the merger.
The bureau stated that the 2 airways signify two of the 4 largest suppliers of built-in trip packages in Canada and are the 2 greatest gamers connecting Western Canada to solar locations.
WestJet has stated the acquisition will increase its general flight capability, as it might probably fly Sunwing jets on routes outdoors of the airline’s conventional vacation schedules. The firm has additionally stated it should keep operations at Sunwing’s Toronto and Laval, Que., workplaces.
Among Alghabra’s situations was a assure that employment in Toronto would rise 20 per cent over the following three years and that the regional Sunwing workplaces could be maintained.
Labour union Unifor had pushed the federal authorities to incorporate job protections for Sunwing workers as a part of the deal’s approval. WestJet has argued the expanded flying alternatives with Sunwing’s jets will create extra jobs.
Earlier this 12 months, WestJet introduced plans to refocus its operations to primarily service routes out of Western Canada.
The announcement comes as Canada’s airline trade struggles to regain footing after three years of disruptions within the pandemic.
Both airways are coming off a tough vacation season as properly, which noticed quite a few flight delays and cancellations, chaos at airports and a whole lot of Sunwing passengers stranded in Mexico.
The chaos led Sunwing to cancel all its flights out of Saskatchewan for the remainder of the winter season.
— with information from The Canadian Press
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