As reported this morning, the federal government has approved WestJet's acquisition of Sunwing Vacations and Sunwing Airlines. The official announcement has now been released, with the government saying the deal comes with "strict terms and conditions" attached.
"The decision to approve this acquisition was not taken lightly, especially considering the delays and bottlenecks experienced by travellers last summer, as well as the customer service and communications challenges by Sunwing during the recent holiday season," the government said.
"In determining the proposed purchase is in the public interest, the government considered a broad range of factors, such as levels of service, social and economic implications, the financial health of the air transportation sector, and competition."
The government added an opinion that "the acquisition will help maintain the stability of the sector as Sunwing will continue to provide more affordable vacation packages to Canadians, while being financially supported by WestJet. "
From an industry perspective, the terms and conditions don't seem particularly onerous. They include:
-- Extending Sunwing vacation package offerings to five new Canadian cities;
-- Maintaining capacity on routes most affected by the merger;
-- Increasing regional connectivity;
-- Improving baggage handling for better passenger experience;
-- Maintaining a vacations business head office in the Toronto area and a regional office in the Montreal area for a minimum of five years;
-- Increasing net employment by 20% over three years in the Toronto office;
-- Ensuring better passenger experience by investing in IT technology solutions to improve Sunwing's communications;
-- Supplying airfare data on vacation packages for monitoring of post-acquisition price trends;
-- Gradually ending Sunwing's seasonal leasing practice to protect Canadian jobs.
The federal government used the occasion to state that it is also working on significant reforms to the Air Passenger Protection Regulations to ensure passenger rights are "even more protected."
It says "these changes will place Canada at the forefront of passenger protections globally and, together with other steps to be taken, will help prevent the frustrating experiences of passengers last summer and over the holiday season."
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