Competition Bureau of Canada has expressed concerns about the proposed acquisition of Sunwing Airlines and Sunwing Vacations, operators specialising in leisure markets, by WestJet Airlines.
The intention of WestJet, Canada’s second largest airline, was announced in March this year, when it unveiled plans to create a new travel business unit. The division would bring together Sunwing Vacations and WestJet Vacations, and would be led by Stephen Hunter, Sunwing’s CEO.
According to the government body in charge of regulating such operations, the deal could lead to higher prices for customers and a decrease in the available services. In a report to Omar Alghabra, Minister of Transport, the office said the end of competition between the two companies could lead to a substantial decrease in competition in the package holiday market.
This is not the first such statement from an industry player. Air Transat, the country’s third largest carrier, said that if the merger is completed, competition in the leisure travel market will be reduced. For its part, Aéroports de Montréal (ADM), which manages the airports serving the city of Montréal, made official its concern about the possible decline of Sunwing’s business at Pierre Elliott Trudeau International Airport (YUL).
Currently, the two carriers account for about 37% of total non-stop capacity between Canada and major leisure destinations in Mexico and the Caribbean. In addition, they offer about 72% of the total capacity between Western Canada and the most popular holiday destinations for Canadians.
WestJet’s response
Following the Competition Bureau’s report, WestJet Group issued a press release in response.
«We thank the Competition Bureau and welcome their report», said Angela Avery, WestJet Group Executive Vice-President and Chief People, Corporate and Sustainability Officer. «We look forward to bringing this transaction to life for the benefit of Canadian travellers, communities and employees», she added.
The company noted that the Canadian Transportation Agency issued a positive determination on the proposed transaction and welcomed that stance.
While the bureau’s document is advisory and non-binding, it will support Transport Canada, the government agency responsible for transportation policy and programmes in the country, which must submit its final report to the Minister of Transport by December 5. It is currently conducting a full public interest review of WestJet’s proposal.
The Council of Ministers will make the final decision on the deal on behalf of the recommendation of Omar Alghabra. The transaction could take place in the spring of 2023.
See also: Airports and airlines oppose Sunwing and WestJet merger
