The Canadian travel industry was rocked today with news that the WestJet Group of companies will acquire Sunwing Vacations and Sunwing Airlines.
The combination of WestJet's strong fleet, network and financial stability, and Sunwing's vacation packaging prowess from dozens of Canadian gateways would make it a formidable competitor to holiday leaders Air Canada Vacations and Transat.
"Like many Canadian businesses, the past two years have forced us to think long-term about what matters to us most, where we can manage costs and how we can expand our footprint while continuing to deliver on our purpose of making vacation dreams come true," said Sunwing CEO Stephen Hunter.
"It became abundantly clear that our reputation for innovative vacation packages would be strengthened by joining forces with a like-minded Canadian company with a well-established scheduled airline service. With WestJet, we have found that partner."
"This is an exciting moment for WestJet, Sunwing and Canada's travel industry," said Alexis von Hoensbroech, CEO of WestJet. "We are bringing together two highly complementary businesses with powerhouse brands to strengthen our successful leisure business and deliver greater value to our guests."
Sunwing's current shareholders will become equity holders in the WestJet Group, which will expand to include Sunwing Airlines.
The companies say their merger will give both WestJet and Sunwing employees access to greater opportunities, whether they are pilots, cabin crew or tour employees.
While the companies wait for approval, they say it will be business as usual, with all existing bookings honoured. They say cities where WestJet operates will gain access to a wider array of vacation packages and regional growth is expected, especially in Quebec, where Sunwing has a longstanding presence.
Following government approvals and the close of the transaction, a new tour operating business unit led by Stephen Hunter will be created under the WestJet Group, to include both Sunwing Vacations and WestJet Vacations Inc.
The tour operator business will be headquartered in Toronto, with a Quebec head office in Laval. The business will continue to market the Sunwing brand alongside WestJet Vacations. The WestJet Group will maintain its head office in Calgary.
"This will add increased capacity, dedicating otherwise seasonal aircraft to operate year-round in Canada, instead of Sunwing supplementing seasonal demand with imported aircraft, which translates into more jobs for Canadians," WestJet said in a statement. "This acquisition will improve the WestJet Group's ability to offer more affordable fares by immediately expanding its low-cost footprint in Canada."
In a statement released by Sunwing, the company said "Canadian travellers and the Canadian travel industry are overdue for good news."
"We are excited to announce an agreement under which the WestJet Group will acquire Sunwing Vacations (inclusive of SellOffVacations and Vacation Express) and Sunwing Airlines to create a new, combined tour operating business," the Sunwing statement said.
Sunwing CEO Stephen Hunter said he's happy to join forces with one of the only airlines in the world that has not issued debt or equity during the pandemic, or accepted sector-specific government aid.
"The combination of their strong balance sheet and growth trajectory with Sunwing's unparalleled expertise in creating differentiated vacation packages will ensure the success of the new vacation division. My team and I are excited for the future, and we look forward to offering even more vacation destinations to Canadians at affordable prices," Hunter said.
The deal, which remains subject to regulatory approvals, is anticipated to close late 2022.
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