UPDATED: WestJet Acquisition Of Sunwing Approved

Canada’s Minister of Transport, Omar Alghabra has announced that following Transport Canada’s assessment of the public interest — which incorporated the findings of the Commissioner of Competition, and consultations with Canadians, consumer protection groups, unions and industry – the Canadian government has approved the acquisition of Sunwing Vacations and Sunwing Airlines by WestJet Airlines Ltd., subject to strict terms and conditions that are in the interest of Canadians.

Minister Alghabra said that: “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 Minister added: “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.”

In determining the proposed purchase is in the public interest, the government considered a broad range of factors, such as levels of service, social and economic implications, the financial health of the air transportation sector, and competition.”

Given the current air sector landscape, it was important to ensure that the final agreement offered the best possible outcome for Canadians. The acquisition will help maintain the stability of the sector as Sunwing will continue to provide more affordable vacation packages to Canadians, while being financially supported by WestJet.

The acquisition will also result in enforceable terms and conditions intended to protect the interests of travellers.

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.

The Government of Canada is also working on significant reforms to the Air Passenger Protection Regulations to ensure passenger rights are even more protected. These changes will place Canada at the forefront of passenger protections globally and, together with other steps to be taken, will help prevent the frustrating experiences of passengers last summer and over the holiday season.

WestJet, Sunwing Comment

In a statement issued following the government’s issuance of an order finding that the proposed acquisition of Sunwing Vacations and Sunwing Airlines is in the public interest, taking into account certain measures, the WestJet Group’s Executive Vice-President and Chief People, Corporate & Sustainability Officer, Angela Avery, said:

“We are pleased that the regulatory review of the transaction is now complete. We thank the Minister of Transport and the Commissioner of Competition, and the staff of Transport Canada, the Competition Bureau, and the Canadian Transportation Agency, for their efforts to review the transaction.”

The statement also noted that the issuance of the order is an important milestone in the process toward closing the transaction.

For its part, Sunwing said that: “This week marks an important milestone as regulatory reviews are complete, bringing us one step closer to finalizing the transaction. We thank Government of Canada officials, including the Minister of Transport, for their efforts in reviewing the transaction and their determination that it’s in the public interest, subject to certain measures imposed in the Government of Canada’s order. We look forward to closing the transaction in the weeks ahead and officially joining the WestJet Group.”