CALGARY — It’s official: WestJet will be acquiring Sunwing in a groundbreaking deal confirmed today, March 2.
Following an earlier report from BNN Bloomberg, the companies announced that they have reached a definitive agreement under which the WestJet Group will acquire Sunwing Vacations and Sunwing Airlines. The deal, which remains subject to receipt of regulatory approvals, is anticipated to close in late 2022.
Following the close of the transaction, a new tour operating business unit will be created under the WestJet Group, to include both Sunwing Vacations and WestJet Vacations Inc., and will be led by Sunwing CEO Stephen Hunter. Sunwing’s current shareholders will become equity holders in the WestJet Group.
The tour operator business will be headquartered in Toronto, with a Quebec head office in Laval and the business will continue to market the Sunwing brand alongside WestJet Vacations. The WestJet Group will maintain its head office in Calgary.
The WestJet Group of companies will expand to include Sunwing Airlines. According to the Group, this will add increased capacity, dedicating otherwise seasonal aircraft to operate year-round in Canada, instead of Sunwing supplementing seasonal demand with imported aircraft, which translates into more jobs for Canadians. This acquisition will also improve the WestJet Group’s ability to offer more affordable fares by immediately expanding its low-cost footprint in Canada.
“This is an exciting moment for WestJet, Sunwing and Canada’s travel industry,” said Alexis von Hoensbroech, CEO of WestJet. “We are bringing together two highly complementary businesses with powerhouse brands to strengthen our successful leisure business and deliver greater value to our guests.”
He added: “This combination brings together Canada’s two original low-cost carriers and positions us to accelerate growth in value-oriented travel, already the fastest growing segment of the airline market. It creates new opportunities for our people, our operational partners and supports the recovery from a global pandemic that has been particularly challenging for the Canadian travel and tourism industry including local airports and businesses we work closely with.”
Stephen Hunter, CEO of Sunwing, said that the company has a “very promising” future as part of The WestJet Group, noting that it is one of the only airlines in the world that has not issued debt or equity during the pandemic, or accepted sector-specific government aid.
“The combination of their strong balance sheet and growth trajectory with Sunwing’s unparalleled expertise in creating differentiated vacation packages will ensure the success of the new vacation division. My team and I are excited for the future, and we look forward to offering even more vacation destinations to Canadians at affordable prices,” said Hunter.
Sunwing expects to no longer require the pandemic-related Large Employer Emergency Financing Facility (LEEFF) Sunwing obtained from the Canadian government in early 2021, which will be fully repaid upon closing of the transaction.