Will history repeat itself with the WestJet-Sunwing deal? Aviation expert weighs in

Sunwing, WestJet speak out after Competition Bureau report raises concerns about proposed deal

OTTAWA — A new report from Canada’s Competition Bureau outlines concerns that WestJet’s proposed acquisition of Sunwing Vacations and Sunwing Airlines “is likely to result in a substantial lessening or prevention of competition in the sale of vacation packages to Canadians.”

Less than two hours after the report went public, Sunwing issued a statement of its own.

“We appreciate the Competition Bureau’s due diligence in the regulatory review process,” says Sunwing.

“In its report, the Bureau acknowledged the significant impact of COVID-19 on the industry.

“The routes identified as concerns in the Bureau’s report are predominantly in Western Canada, account for a very small portion of Sunwing’s operations (just over 10% of all seats) and are primarily seasonal versus year-round routes.

“Also of note, Sunwing no longer operates six of the routes mentioned in the report.

“We remain confident that this transaction is good news for Canadians. The combination of WestJet’s and Sunwing’s complementary businesses will deliver more affordable vacation packages and competitive airfares, while enabling us to protect and create jobs at a critical time for the travel industry. We look forward to the next steps in the regulatory process, including continued collaboration with Transport Canada to ensure a timely approval on the transaction.”

Shortly after, WestJet also issued a statement, from Angela Avery, WestJet Group’s Executive VP and Chief People, Corporate and Sustainability Officer.

“We thank the Competition Bureau and welcome their report,” said Avery. “We look forward to bringing this transaction to life for the benefit of Canadian travellers, communities and employees.”

She added that the Bureau’s report is advisory and non-binding, but will support the Minister of Transport’s public interest assessment. The final decision, made by the Cabinet on the Minister of Transport’s recommendation, will consider additional factors presented in the WestJet Group’s application, including the preservation of Sunwing’s brand, the commitment to maintain Sunwing’s Toronto and Montreal offices, new flying that will be created by retaining Sunwing’s aircraft in Canada year-round and the resulting new employment opportunities.

Avery also noted that separately, the Canadian Transportation Agency has issued its positive determination of the proposed transaction. With the publication of the Bureau’s report and the issuance of the Agency’s determination, the transaction’s regulatory review process moves into its next stage.


The Competition Bureau’s initial findings are included in the report, delivered by the Commissioner of Competition to the Minister of Transport and made public this morning, and available here.

The report will inform Transport Canada’s public interest review of the proposed transaction as it relates to national transportation.

According to the report, “based upon analysis of facts and information prior to and during the COVID–19 pandemic, the Commissioner has determined that the proposed transaction is likely to result in substantial anti–competitive effects through the elimination of rivalry between WestJet and Sunwing in certain areas of overlap between their networks.”

It says the deal would result in one of Canada’s largest integrated tour operators being acquired by one of its primary rivals in the provision of vacation packages.

The report also notes that WestJet and Sunwing account for about 37% of nonstop capacity between Canada and sun destinations and 72% of nonstop capacity between Western Canada and sun destinations.

The report lists 3 areas of particular concern:

  • “A substantial lessening or prevention of competition in the provision of vacation packages on 31 routes between Canada and Mexico or the Caribbean”
  • “A merger to monopoly of the only two carriers and integrated tour operators offering vacation packages through direct service on 16 of these 31 routes”
  • “A significant reduction in travel by Canadians in the overlap markets”

The report adds that the deal is likely to result in substantial competitive effects, such as increased prices, reduced choice, decreased services, and more.

The Bureau notes that it examined competition between WestJet and Sunwing’s pre-pandemic networks as well as their current plans.

Transport Canada now has until Dec. 5, 2022 to complete its public interest assessment and provide it to the Minister of Transport. The final decision regarding the proposed transaction will be made by the Governor in Council (Cabinet) based on a recommendation from the Minister.


At the same time that the Competition Bureau is outlining its concerns with the proposed WestJet – Sunwing deal, some in the Canadian airline industry are making predictions in the other direction, i.e. consolidation.

They say the current situation, with new entrants (including Lynx Air and Canada Jetlines), plus big expansion plans from existing players (including Porter and Flair, said to be looking at going public), not to mention the extensive networks of legacy carriers from Air Canada (and Rouge) to WestJet (and Swoop) to Sunwing to Transat, will bring overcapacity and unsustainable pricing.

The last big airline deal to (almost) shake up the travel industry – Air Canada’s proposed acquisition of Transat – got the green light from the Competition Bureau, but ultimately foundered in 2021 after failing to get the go-ahead from the European Commission.

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