Yahoo Finance WestJet closes SunWing deal, expanding its footprint in eastern Canada
WestJet Airlines Ltd. has completed its acquisition of Sunwing Vacations and Sunwing Airlines, the company announced May 1, nearly two months after the federal government gave the takeover the green light.
The transaction, first announced in March last year, gives Calgary-based WestJet an expanded presence in the east, where Sunwing is headquartered.
The airlines said they will initially continue as independent operations before the two entities combine.
“It brings me great pleasure to welcome Sunwing to the group, adding 18 Boeing 737s, 2,000 employees and Canada’s largest vacation tour operator and significantly expanding our footprint in Eastern Canada,” WestJet Group chief executive Alexis von Hoensbroech said in a press release.
Sunwing chief executive Stephen Hunter will join WestJet as its vacations business CEO, responsible for all tour operating and vacation package businesses of both the Sunwing Vacations and WestJet Vacations brands, the company said.
The newly merged tour operator businesses will be headquartered in Toronto and will continue to operate a Montreal office, it said. Sunwing’s aircraft will be retained in Canada year-round as part of the vacations business, it added.
Transport Canada on March 10 said the merger will help “maintain the stability of the sector,” considering the delays experienced by travellers last summer, as well as the customer service and communications challenges by Sunwing during the recent holiday season.
Among the approval conditions laid out by the government, WestJet must extend Sunwing vacation package offerings to five new Canadian cities, maintain capacity on routes most affected by the merger and increase regional connectivity.
It said WestJet also needs to improve Sunwing’s baggage handling and maintain a vacations business head office in the Toronto area and a regional office in the Montreal area for a minimum of five years.
It must also increase net employment by 20 per cent over three years in the Toronto office, as well as gradually ending Sunwing’s seasonal leasing practice to protect Canadian jobs. Sunwing, a privately owned travel company based in Toronto, currently employs approximately 2,200 people.
WestJet currently operates with more than 180 aircraft and 14,000 employees.
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