WestJet and Sunwing deal raises concerns: The Competition Authority | Jobi Cool


The Competition Authority has raised serious concerns about the proposed acquisition of WestJet Airlines Ltd. owns Sunwing Vacations and Sunwing Airlines and says the deal will likely result in higher prices and reduced service for Canadians.

In a report sent to Canada’s transport minister on Wednesday, the regulator said the elimination of competition between the two companies would likely lead to a significant reduction or elimination of competition in the sale of vacation packages to Canadians.

“The proposed transaction will result in one of Canada’s largest integrated tour operators being acquired by one of its major competitors in the provision of package holidays,” the report said.

“Overall, WestJet and Sunwing account for approximately 37 percent of the stopping capacity between Canada and solar destinations and 72 percent of the stopping capacity between Western Canada and solar destinations.”

WestJet announced a plan in March to buy Sunwing, a move that would boost its leisure travel business. Financial terms of the deal, which would see Sunwing shareholders become shareholders in WestJet Group, were not disclosed.

In its report, the Competition Authority noted that the merger of the two carriers would create a monopoly on 16 routes between Canada and Mexico or the Caribbean and would reduce or prevent competition for the provision of package holidays on a total of 31 routes between Canada and Mexico or the Caribbean.

But in an emailed statement Wednesday, Sunwing spokeswoman Melanie Anne Filipp said the routes identified as concerns are mainly in Western Canada and are a very small part of Sunwing’s operations — just over 10 percent of all seats — and are first and foremost primarily seasonal means. .

“Also note that Sunwing no longer operates six of the routes mentioned in the report,” Filipp said. “We are confident that this transaction is good news for Canadians.”

In a press release, WestJet said the proposed Sunwing transaction is central to the Calgary-based airline’s commitment to prioritizing leisure and sun travel from coast to coast and expanding affordable flight and vacation package offerings for all Canadians.

Transport Canada is also conducting a public interest review of the proposed transaction. The final decision on the contract will be taken by the government on the proposal of the minister.

WestJet said this decision will take into account several factors, including WestJet’s promised preservation of the Sunwing brand, its commitment to maintaining Sunwing’s offices in Toronto and Montreal, new flights created by keeping Sunwing’s aircraft in Canada year-round around and the resulting new job opportunities.

“We thank the Competition Authority and welcome their report,” WestJet vice president Angela Avery said in the release. “We look forward to bringing this business to fruition for the benefit of Canadian tourists, communities and workers.”

The companies have said they expect the transaction to close in the spring of 2023, pending government and regulatory approvals.

This report by The Canadian Press was first published on October 26, 2022.

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