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WestJet veut acquérir Sunwing


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https://www.westjet.com/en-ca/news/2022/westjet-group-to-acquire-sunwing-vacations-and-sunwing-airlines

 

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WestJet and Sunwing announced today that they have reached a definitive agreement under which the WestJet Group of companies will acquire Sunwing Vacations and Sunwing Airlines. The transaction will bring together two distinctly Canadian travel and tourism success stories to deliver new travel options and greater value for travellers in the rapidly expanding leisure and work-from-anywhere travel markets. The combination will enable both companies to protect and create jobs and rebuild strength in the Canadian travel industry at a critical time.

Following the close of the transaction, a new tour operating business unit will be created under the WestJet Group, to include both Sunwing Vacations and WestJet Vacations Inc., and will be led by Sunwing CEO Stephen Hunter. Sunwing’s current shareholders will become equity holders in the WestJet Group.

Canadian travellers will have access to more competitive airfares and affordable vacation packages through the combined strength of the companies. The tour operator business will be headquartered in Toronto, with a Quebec head office in Laval and the business will continue to market the Sunwing brand alongside WestJet Vacations. The WestJet Group will maintain its head office in Calgary.

The WestJet Group of companies will expand to include Sunwing Airlines. 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. This acquisition will improve the WestJet Group’s ability to offer more affordable fares by immediately expanding its low-cost footprint in Canada.

“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.”

“This combination brings together Canada’s two original low-cost carriers and positions us to accelerate growth in value-oriented travel, already the fastest growing segment of the airline market. It creates new opportunities for our people, our operational partners and supports the recovery from a global pandemic that has been particularly challenging for the Canadian travel and tourism industry including local airports and businesses we work closely with,” added von Hoensbroech.

Stephen Hunter, CEO of Sunwing, said, “We have a very promising future as part of The WestJet Group, which is 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.”

WestJet Group and Sunwing intend to build on their collective history of constructive labour relations and will respect all arrangements with union and employee associations, including those in place and those currently under negotiation.

As a result of the resiliency created by the transaction, Sunwing expects to no longer require the pandemic-related Large Employer Emergency Financing Facility (LEEFF) Sunwing obtained from the Canadian government in early 2021, which will be fully repaid upon closing of the transaction.

The combination, which remains subject to receipt of regulatory approvals, is anticipated to close late 2022.

 

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An interesting article in La Presse this morning, which touches on how this merger might affect YUL. A couple of positive aspects: one, Sunwing (unlike West Jet) has a strong presence in Montreal (Laval) with about 500 employees. Secondly, they will be operated in an an autonomous fashion, they will concentrate on the holiday market,  and their CEO indicated that they want to strengthen their presence in Quebec. 

One important question is how will this impact Air Transat. How fragile are they after the unsuccessful effort  to merge with AC? Will a strengthened Sunwing threaten their survival? 

Personally, so far, I am impressed with the new leadership at Air Transat. The company is an important asset for Quebec and I hope that they are up to this challenge.

Also, there has been an important change at the head of West Jet, Their new CEO is from Europe. West Jet's determined efforts to remain unilingual and uni-cultural, and to avoid as much as possible the Quebec market, may seem to be ridiculously insular to someone accustomed to the European reality. Let's face it, operating in a minimum of two languages is pretty normal in most of the world, and is not the Mission Impossible that too many Western Canadians  believe it to be. 

All of that being said, even if Sunwing is relatively autonomous from West Jet, both entities have their headquarters outside of Quebec.

If Air Transat were to fail, that would leave Montreal as being the headquarters of only one serious airline, AC , and we all know, only too well, their inability to define themselves openly as a Quebec-based  company.  

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Overall, I'd say this is good news for the Canadian aviation industry. It will strengthen both brands, in a time when there is a lot of uncertainty in the industry. WestJet was always weak in the leisure segment. This will instantly solve that problem. Whereas Sunwing will gain financial stability in a very volatile industry at the moment.

What I like the most about this announcement is this......

On 2022-03-02 at 1:15 PM, p_xavier said:

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.

Sunwing will no longer wet least B737s from TUI group over in Europe, meaning no more Czech or other Eastern European pilots coming here and doing what plenty of furloughed Canadian pilots can do at the moment. WestJet will be able to backfill the added demand for sun flying in the winter. 

Yes, as far as competition goes, this news doesn't bode well for certain airports, including YYZ and some airports in Western Canada. The impact of this on YUL is minimal, as WS has little to no presence here, especially on sun routes.

It will be interesting to see what kind of restrictions/concessions the Canadian competition Bureau will come up with for this merger.

 

7 hours ago, mont royal said:

that would leave Montreal as being the headquarters of only one serious airline, AC , and we all know, only too well, their inability to define themselves openly as a Quebec-based  company.  

AC employs around 8,000 people in Quebec. That's out of roughly 25,000 employees (at December 31, 2021). Doesn't get much more Quebec based than that.

1 person being incapable of speaking fluent French doesn't change that. 

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^ and speaking of TS, they are such hypocrites.....

This is what they had to say about this merger, in the lapresse article...

Quote

Contrairement aux analystes, Transat A.T. fait valoir que le regroupement entre Sunwing et WestJet n’est pas une « bonne nouvelle » pour les consommateurs. L’entreprise, qui a vu son mariage avec Air Canada annulé il y a un peu plus d’un an, prévient qu’il y aura une « diminution de la concurrence » vers des destinations comme le Mexique.

So when they were ready to merge with AC, all was peachy, and consumers were going to benefit, but now all of a sudden, they are claiming that this particular merger will harm consumers?

Give me a break ! What a bunch of hypocrites !

And like I said, their statement isn't even true for Montreal or Quebec, as Westjet has zero sun routes from YUL or YQB.

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Good article on lesailesduquebec.

Those charts with number of flights per airline, per province, say it all really ! This merger will have minimal impact on consumers in Quebec. Air Transat's biggest competition is still AC, by a wide margin. Even in Ontario, WS/WG combo is still only ~ 70% of sun flights compared to AC.

https://www.lesailesduquebec.com/lentente-entre-air-transat-et-westjet-inchangee/

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  • 5 months later...
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Why Montreal Airport Is Worried About WestJet’s Sunwings Takeover

 

The Montreal Airport Authority fears WestJet will redirect Sunwings resources from Montreal to Ontario.

BYRILEY PICKETT 

PUBLISHED 2 DAYS AGO

Aéroports de Montréal (ADM) has expressed concern over WestJet’s recent plans to acquire Sunwing Airlines. ADM told Transport Canada that they are concerned the acquisition will take flights from Montréal-Pierre Elliott Trudeau International Airport (YUL) and redirect them to Toronto Pearson International Airport (YYZ). Sunwing has built a strong presence in Montreal and has delivered dependable regular flights to its residents. WestJet has a smaller presence in Montreal; the airport believes that WestJet may redirect many of Sunwing's flights to Toronto. It fears the merger may undercut the years it spent building a network of direct flights to Montreal.

Fears of relocation

Recently the ADM has raised concerns with Transport Canada. It worries that the upcoming merger between WestJet and Sunwing Airlines will undermine the airport's route networks. Sunwing offers routes to multiple vacation destinations from Montreal. Since travel restrictions have reopened, these routes have received positive feedback from the local public. The ADM has spent years building the number of non-stop routes serviced to Montreal's YUL. Sunwings has been a significant part of that Initiative. Without Sunwings, YUL will lose a considerable amount of traffic each year.

WestJet has retained a smaller presence in Montreal, offering far more flights to the more centralized Canadian city of Toronto. Because of WestJet's massive presence in Toronto, the ADM fears that many Sunwings routes to Montreal will be reduced or even terminated so that the aircraft may be redirected to service the larger Toronto YYZ airport. The ADM's Vice President of Operations, Stéphane Lapierre, stated,

"We are concerned that the acquisition of Sunwing by WestJet Airlines Ltd. could lead to a shift of Sunwing's operations to [Toronto]‚

"This would be very harmful for ADM and for [Montreal-Trudeau] and would notably have the consequences of reducing the attractiveness of Montreal in terms of service, increasing the number of flights between [Montreal] and [Toronto], reducing the number of direct flights … for the Montreal community."

Decreased travel

Sunwings has built a business model around carrying passengers to various leisure destinations. The airline has become known for offering package vacation deals to its passengers, which often include airfare, boarding, and dining at resorts in tropical destinations, including Jamaica, Mexico, and Cuba. It has served the Montreal market for years by providing affordable, convenient travel options.

If WestJet reduces these routes to Montreal, the airport anticipates that it will see a decrease in annual revenues and profits. The ADM claims that Montreal is unique and has its own travel needs. By relocating resources to Toronto, the Ontario travel industry will benefit from these new offerings, even as Montreal's demand for air travel will only increase.

Airport traffic

Montréal-Pierre Elliott Trudeau International Airport (YUL) is the third busiest in the country. In 2019, it saw over 19 million passengers receiving flights from 34 airlines. WestJet has minimized its presence in eastern Canada in recent years. It now only operates four routes to YUL. This makes for a small portion of the airport's traffic, whereas tropical leisure travel makes up 20% of it. Losing Sunwings could prove detrimental to the airport. The acquisition was announced this past March, and the airlines anticipate that approval from the government may be granted later this year.

https://simpleflying.com/montreal-airport-worried-westjet-sunwings-takeover/

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There is something disturbing to me about this announcement. It sounds defensive and whiny...even childish. Nobody owes YUL their loyalty. Unfortunately they present no constructive proposals about how this possible loss of flights should be addressed  Why not point out the advantages to Sunwings (Westjet) increasing its presence in Montreal? No reason is given whatsoever, beyond the peevish complaining. 

It seems to me that the new team at YUL has a lot of work to before they can convince airlines to increase their presence here... or even commence operations'. 

The other obvious possibility is that, if all this were to happen, then a new or existing Quebec-based competitor can move in to the abandoned market. Who wants to take a vacation flight via Toronto if you can have a direct flight? This could open up new markets for Air Transat or even OMG. 

This would actually be an improvement for YUL. A Quebec-based airline is more apt to understand the local market and to have a long term commitment to YUL.

 

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Lol OMG, I’m sure you meant OWG. .. and yes, good points but I too would like more details why they suspect this is a possibility. Westjet’s lack of YUL flights is still strange to me and it seem Sunwing might be caught up in it now. 

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