“It wasn’t a question of when, but who”: Aviation expert reflects on WestJet-Sunwing deal

“Never a dull moment in this industry”: Reaction to proposed WestJet – Sunwing deal

TORONTO — Even for an industry that thought it had seen everything over the past two years, yesterday’s announcement that WestJet Group intends to acquire Sunwing Airlines and Sunwing Vacations came as a surprise.

WestJet made headlines of its own when it was acquired by Onex Corp., in a deal that finalized in late 2019. But for the travel industry, the focus had long been the proposed agreement between Air Canada and Transat. That is, until the pandemic obliterated everything in early 2020. The Air Canada – Transat deal ultimately foundered, in part due to a long delay in the approvals process by the European Commission, which got involved because of Air Canada and Transat’s strong transatlantic networks, and which ultimately gave the merger a thumbs down. The deal was officially terminated in April 2021.

The WestJet – Sunwing deal will be subject to regulatory approvals too, although the companies say they hope things will be wrapped up by the end of 2022.

As reported yesterday, WestJet Group will create a new tour operator unit that will encompass both WestJet Vacations and Sunwing Vacations. The tour operators will function as separate brands and separate entities, with Sunwing CEO Stephen Hunter at the helm. WestJet Group will also expand to include Sunwing Airlines.

Travelweek reached out to Sunwing to ask about Blue Diamond Resorts. It turns out Blue Diamond is not part of the acquisition, with no further details available as of yet.

The deal does include SellOffVacations and Vacation Express, Sunwing’s tour operator arm in the U.S.

ONE TRAVEL AGENCY OWNER’S TAKE

The Travel Lady Agency CEO Lesley Keyter, who earlier this week urged the federal government to drop pre-departure testing and extend the travel industry’s financial aid, is based in Calgary. We asked her what she thought of the WestJet – Sunwing announcement.

“At first I was a little dismayed because competition in any industry is important, however I have always thought that WestJet’s strength was its air service. Way back, when they launched WestJet Vacations, I was puzzled and disappointed – it is a completely different animal and WestJet was doing such a good job as an airline,” Keyter tells Travelweek.

“I think therefore they will be well served to take on Sunwing as their vacation arm and then concentrate on their air service. Air Canada definitely needs the competition and we need another Canadian international air provider – one which can provide a variety of classes of service from business down to economy,” she adds.

MESSAGE FROM ANDREW DAWSON

Sunwing’s President of Tour Operations, Andrew Dawson, says there are three key benefits of the proposed agreement will bring more jobs, more choices and lower prices to the Canadian market. “This transaction will bring together two distinctly Canadian success stories to deliver new travel options and greater value for Canadians,” said Dawson in a follow-up statement to yesterday’s announcement.

“The combination of WestJet’s strong balance sheet and vibrant growing national airline with Sunwing’s established brand and expertise in creating differentiated vacation packages will ensure this new tour operating business thrives,” he added.

Dawson said that these two pandemic years forced Sunwing “to think long-term about what matters to us most, where we can manage costs and how we can expand our footprint while continuing to deliver on our purpose of making vacation dreams come true. It became abundantly clear that our reputation for innovative vacation packages would be strengthened by joining forces with a like-minded Canadian company with a well-established scheduled airline service. With WestJet, we have found that partner.”

Dawson’s statement included a shout-out to travel agents and other industry partners. “I am tremendously grateful for the role that our valued travel partners have played in Sunwing’s journey to date. In our long history as a company, we have always been motivated, challenged and excited by our trade partners and the agent community’s enthusiasm for helping our mutual customers make life-lasting memories on dream vacations at affordable prices.”

He says Sunwing plans to strengthen the partnerships it has built with local, regional and international airports across Canada, and increase capacity year-round. “Cities where WestJet operates will gain access to a wider array of vacation packages and regional growth is expected in several of our existing markets, particularly in Quebec where we have a longstanding presence,” said Dawson.

He concluded by saying that any existing plans customers have made with Sunwing will be honoured, and that it’s “business as usual” for the time being since the agreement is subject to regulatory approvals.

“Thank you for coming along on this journey with us, especially after weathering a difficult couple of years. Our industry’s best days are ahead of us,” said Dawson.