Trudeau Government Officially Okays WestJet-Sunwing Merger
It’s a new day in Canadian aviation, as WestJet has been cleared to take over Sunwing Vacations and Sunwing Airlines. But the Trudeau government is imposing conditions, and also is pledging to strengthen Canada’s weak airline passenger protection laws.
Minister of Transport Omar Alghabra today announced that following Transport Canada’s assessment of the public interest, the Government of Canada has approved the acquisition of Sunwing Vacations and Sunwing Airlines by WestJet Airlines Ltd., subject to strict terms and conditions that are in the interest of Canadians. The minister said Ottawa’s assessment of the propsed deal incorporated the findings of the Commissioner of Competition, and consultations with Canadians, consumer protection groups, unions and industry,
“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,” officials 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.
“Given the current air sector landscape, it was important to ensure that the final agreement offered the best possible outcome for Canadians. 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.
“The acquisition will also result in enforceable terms and conditions intended to protect the interests of travellers. These strict terms and conditions 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 per cent 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; and
Gradually ending Sunwing’s seasonal leasing practice to protect Canadian jobs.
The Government of Canada is also working on significant reforms to the Air Passenger Protection Regulations to ensure passenger rights are even more protected. 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.
“Today’s decision was not taken lightly, especially in light of everything that happened over the holidays for those who flew with Sunwing,” Alghabra said in a statement. “After considering the pros and cons, we have made the decision that will allow Sunwing to continue to provide affordable vacation packages to Canadians, create more good jobs, and protect current jobs as well as Canadians who have already purchased tickets.
“The agreement will also be accompanied by strict terms and conditions to ensure the public interest, including with regard to competition, connectivity and baggage handling.”
