Low-cost airline WestJet has announced plans to acquire rival Sunwing Airlines for an undisclosed sum.

WestJet, owned by Canadian private-equity firm Onex Corporation, is yet to have the proposal approved by Canada’s Competition Bureau.

As passenger numbers in the region are set to rebound in the wake of new options for travellers to meet pre-entry requirements, airlines are taking action to tap into recovering demand.

“Two distinctly Canadian success stories”

In a statement on Wednesday, WestJet said that “the transaction will bring together two distinctly Canadian travel and tourism success stories.”

It is hoped the acquisition will create a new tour operator division that includes both Sunwing Vacations and WestJet Vacations, remaining as individual brands. Current Sunwing CEO Stephen Hunter will lead the division.

WestJet is also set to benefit from new routes to European cities and sunny destinations as a result of the merger.

Sunwing Boeing at Toronto Airport
Sunwing was founded in 2005 | © Mark King

Job security concerns

The announcement has caused concern amongst staff that any deal has the potential to result in job losses. The union that represents Sunwing staff said in response that it would fervently defend its 800 members’ jobs. Rena Kisfalvi, from the Canadian Union of Public Employees, commented:

“The pandemic has been very tough on our sector, and on our airline in particular. We’ll be keeping a close eye on this proposal, and our sole focus will remain on defending our members’ jobs and their livelihoods as this process moves forward.”

Some industry onlookers say recent mergers and acquisitions point to a new trend towards consolidation in the industry, as fierce competition is expected as the market recovers.

The deal is expected to reach completion by the end of the year.

Do you think WestJet’s acquisition of Sunwing will positively affect Canadian air travel? Let us know your thoughts in the comments below.

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