WestJet shuts down Sunwing Airlines and merges with Mainline Business

WestJet will phase out Sunwing Airlines within two years and integrate the low-cost carrier into its core business as part of a strategy to streamline operations amid fierce competition.

The move, announced in an internal memo obtained by The Canadian Press, has raised questions among some industry observers about the impact on airfares and travel options for travelers.

Sunwing Airlines president Len Corrado said in the memo that the change will open markets for both the 18-year-old company and its employees.

“WestJet will eventually move to a one-jet aircraft operating certificate (AOC) model and Sunwing Airlines will be integrated into WestJet. This is a long-term move that will provide more opportunities for scale and growth for our people, and in particular for our airline employees within the group,” Corrado said in Wednesday’s memo.

“While exact timelines are still being finalized, integration is expected to take a few years.”

The decision comes the week after WestJet chose to bring budget subsidiary Swoop’s operations under its flagship.

Both moves reinforce the major consolidation of the Canadian aviation market that followed WestJet’s acquisition of Sunwing’s major airline and vacation divisions last month.

The result, some said, could be a narrower range of choices for travelers.

“Consumers will get it in the left ear again,” said John Gradek, a lecturer in McGill University’s aviation management program. “It is not good.”

He gave the example of a route between Toronto and Puerto Vallarta, Mexico, currently served by all three airlines: WestJet, Swoop and Sunwing.

“WestJet as an organization is not going to support three planes going from Toronto to Puerto Vallarta within an hour of each other. That’s not going to happen,” Gradek said.

Several vacation destinations in Mexico, the United States and the Caribbean are likely to see fewer flights, he said.

The federal government approved WestJet’s acquisition of Sunwing Vacations and Sunwing Airlines in March, despite a warning from the Competition Bureau that the purchase was likely to lead to higher prices and reduced services, especially around package deals.

WestJet and Sunwing represent about 37 percent of the seat capacity on nonstop flights between Canada and destinations in the sun. That number rises to 72 percent between Western Canada and sun destinations, the Competition Bureau said in an October report delivered to the federal Secretary of Transportation.

WestJet confirmed Sunwing Airlines’ impending integration, but said its “immediate focus” remains on weaving Swoop into the company’s business.

Sunwing Vacations will continue as a separate brand, spokeswoman Julia Kaiser said in an email, paving the way for WestJet aircraft to fly Sunwing travel package customers to their getaways.

Sunwing did not respond to a request for comment on Saturday.

WestJet announced on June 9 that it would merge Swoop with its main operations at the end of October as the country’s second-largest airline recalibrates amid a fiercely competitive market.

The shift came five years after Swoop first surfaced in response to rival Flair Airlines’ launch in 2017.

It also landed after pilots with WestJet and Swoop ratified a new collective agreement that puts them on an equal pay scale, giving them a 24 percent wage increase over four years.

In an interview this month, WestJet CEO Alexis von Hoensbroech said he thought about keeping Swoop separate, but concluded that higher wages for his flight crews made the option less viable.

The most recent announcement raises questions about the seniority of Sunwing pilots and management’s job security.

Mark Taylor, president of Unifor’s Sunwing pilot group, said they look forward to working with WestJet, but “we have our concerns”. He cited workers’ home base, union seniority and working conditions as key concerns.

“For all of us at Sunwing, it’s sad to see the sun go down on this great airline we’ve loved working for,” he said in an emailed statement.

“We hope that Westjet management will take the time to understand our culture, our work and the value we bring to the Westjet Group as we move towards a common goal.”

In signing the Sunwing deal, Ottawa attached terms and conditions, including expanding its tour operator packages to five new cities, preserving capacity on the most affected routes, and retaining both a vacation headquarters in Toronto and a regional headquarters in Montreal for at least five years. years.

The deal added some 2,000 employees and 18 Boeing 737s to WestJet’s fleet of 130 aircraft, which consists entirely of Boeing aircraft, according to the federal aircraft registry. This includes Swoop’s aircraft, but not those of regional service WestJet Encore.

Both companies are privately held outfits, with former parent company Sunwing Travel Group majority owned by the Hunter family and WestJet owned by Toronto-based investment manager Onex Corp. after taking the airline private in 2019 in a $5 billion deal.