The Canadian Government has given the go-ahead to WestJet Airlines‘ acquisition of Sunwing Airlines and Sunwing Vacations with terms and conditions.
The government’s decision was based on various factors to concede that the deal was in the public interest.
These factors include service levels, social and economic implications, competition, as well as the financial health of the air transportation industry.
The deal was announced in March 2022, though financial details were not shared.
At that time, the transaction was expected to complete late last year.
However, in October 2022, the country’s Competition Bureau warned that the acquisition would result in “substantial lessening or prevention of competition”.
Consequently, several conditions have been enforced to ensure that the purchase safeguards passengers’ interests.
Among these conditions include the requirement to extend Sunwing vacation package offerings to five new Canadian cities, and gradually end Sunwing’s seasonal leasing practice to protect jobs in Canada.
WestJet will also need to maintain a vacations business head office in the Toronto area and a regional office in the Montreal area for at least five years.
In addition, it will have to increase net employment by 20% over three years in the Toronto office.
Other conditions include the requirement to boost regional connectivity, maintain capacity on routes most impacted by the merger, and invest in IT solutions to enhance Sunwing’s communications.
WestJet believes that the purchase will increase its ability to provide more affordable fares.
Established in 2002, Sunwing is a privately owned travel company with around 2,200 employees.
Canadian Minister of Transport Omar Alghabra said: “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 agreement will also be accompanied by strict terms and conditions to ensure the public interest, including with regard to competition, connectivity and baggage handling.”