Today, the Minister of Transport, Omar Alghabra and the government of Canada granted the approval for the acquisition of Sunwing Vacations and Sunwing Airlines by WestJet Airlines Ltd. However, this approval comes with strict terms and conditions.
These strict terms and conditions include:
- Extending Sunwing vacation package offerings to five new Canadian cities;
- Maintaining capacity on routes most affected by the merger;
- Increasing regional connectivity;
- Improving baggage handling for better passenger experience;
- Maintaining a vacations business head office in the Toronto area and a regional office in the Montreal area for a minimum of five years;
- Increasing net employment by 20 per cent over three years in the Toronto office;
- Ensuring better passenger experience by investing in IT technology solutions to improve Sunwing’s communications;
- Supplying airfare data on vacation packages for monitoring of post-acquisition price trends; and
- Gradually ending Sunwing’s seasonal leasing practice to protect Canadian jobs.
WestJet Airlines Ltd. must meet the government’s stringent criteria and operate under strict regulations in order to ensure that the acquisition does not negatively impact competition or harm consumers. These measures are intended to safeguard against the creation of a monopoly or anti-competitive behaviour in the Canadian airline industry.
“Today’s decision was not taken lightly, especially in light of everything that happened over the holidays for those who flew with Sunwing. 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. The agreement will also be accompanied by strict terms and conditions to ensure the public interest, including with regard to competition, connectivity and baggage handling.” Said Omar Alghabra, Minister of Transport
While the acquisition of Sunwing Vacations and Sunwing Airlines by WestJet Airlines Ltd. may result in limited competition in the Canadian airline industry, it is ultimately a positive move for Canadian air travellers. This acquisition may help address some of the issues Sunwing has faced in recent years, such as high cancellations for Sunwing vacation travellers.
Moreover, the acquisition will provide Canadian travellers with more air travel options and may help promote healthy competition in the industry. It is important for Canadian air travellers to have a choice and access to affordable air travel, and this acquisition could help to achieve that. Therefore, while the government’s approval comes with strict terms and conditions, it is a move in the right direction for Canadian air travellers.
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