The government Canada and Minister of Transport Omar Alghabra approved the acquisition of Sunwing Vacations by WestJet Airlines Ltd. today. This approval is subject to strict conditions.
The following strict conditions apply:
- Sunwing Vacation Packages to be extended to five new Canadian Cities
- Maintaining capacity on routes affected most by the merger
- Regional connectivity is increasing;
- Improving baggage handling for better passenger experience;
- Maintaining an office for vacations in Toronto and one in Montreal for at least five years.
- Toronto office: Increase net employment by 20% over three years;
- Sunwing will improve its communications to better serve passengers by investing in IT solutions.
- Providing airfare data for vacation packages to monitor post-purchase price trends.
- To protect Canadian jobs, Sunwing should gradually end its seasonal leasing practices.
WestJet Airlines Ltd. is required to meet strict criteria set by the government and adhere to strict regulations so that the acquisition doesn’t negatively impact the competition or harm the consumers. These measures aim to protect against the creation or continuation of anti-competitive behavior in the Canadian airline sector.
The decision today was not made lightly, particularly in light of what happened to those who flew Sunwing over the holiday season. We have decided to allow Sunwing continue to offer affordable vacation packages for Canadians. This will create more jobs and protect existing jobs. “The agreement will be accompanied with strict terms and condition to ensure public interest including in regard to competition and connectivity, as well as baggage handling.” said Omar Alghabra.
The acquisition of Sunwing Vacations by WestJet Airlines Ltd., and Sunwing Airlines in turn by WestJet Airlines Ltd. could result in a limited amount of competition in the Canadian airline sector. However, this is a positive step for Canadian air travelers. This acquisition could help resolve some of the problems Sunwing has had in recent years such as high cancellation rates for Sunwing vacation travelers.
The acquisition may also help to promote healthy competition within the industry by providing Canadians with more options for air travel. This acquisition may help Canadians to access affordable air travel and have more choices. While the approval of the government comes with strict conditions, this is still a step in the right directions for Canadian air travelers.
