WestJet to shut down Sunwing Airlines, merge it with mainline business

CITYnews halifax \ By Christopher Reynolds, The Canadian Press

WestJet will wind down Sunwing Airlines and integrate the low-cost carrier into its mainline business within two years 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 travellers’ flight options.

Sunwing Airlines president Len Corrado said in the memo the change will open up markets for the 18-year-old company as well as its workers.

“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 unlock greater scale and growth opportunities for our people, and specifically for our airline employees within the group,” Corrado said in the memo, dated Wednesday.

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

The decision comes the week after WestJet opted to fold budget subsidiary Swoop’s operations under its flagship banner.

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

The upshot, some said, could be a slimmer range of choices for travellers.

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

He gave the example of a route between Toronto and Puerto Vallarta, Mexico, currently flown by all three carriers — WestJet, Swoop and Sunwing.

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

Various vacation spots in Mexico, the United States and the Caribbean will probably see fewer flights, he said.

The federal government approved WestJet’s takeover of Sunwing Vacations and Sunwing Airlines in March, despite a warning from the Competition Bureau that the purchase would likely result in higher prices and decreased services, especially around package deals.

WestJet and Sunwing comprise about 37 per cent of seat capacity on non-stop flights between Canada and sun destinations. That number rises to 72 per cent between Western Canada and sun destinations, the Competition Bureau said in an October report delivered to the federal transport minister.

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

Sunwing Vacations will continue as a separate brand, spokeswoman Julia Kaiser said in an email, setting the stage for WestJet planes to fly Sunwing tour package customers to their getaways.

Sunwing did not respond to a request for comment Saturday.

WestJet announced on June 9 it would merge Swoop with its main business by late October as the country’s second-biggest airline recalibrates amid a fiercely competitive market.

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

It also landed after pilots with WestJet and Swoop ratified a new collective agreement that brings them onto a level pay scale, giving them a 24 per cent wage bump over four years.

In an interview this month, WestJet CEO Alexis von Hoensbroech said he mulled keeping Swoop separate, but concluded higher wages for its flight crews made the option less feasible.

The most recent announcement raises questions about Sunwing pilots’ seniority, as well as management’s job security.

Mark Taylor, president of Unifor’s Sunwing pilots’ group, said they are looking forward to working with WestJet, but “we have our concerns.” He cited employees’ home bases, union seniority and working conditions as key points of apprehension.

“For all of us at Sunwing, it’s sad to see the sun set on this amazing airline that we have loved working for,” he said in an emailed statement.

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

In signing off on the Sunwing deal, Ottawa attached conditions that include extending the tour operators packages to five new cities, maintaining capacity on the most affected routes and keeping both a vacations business head office in Toronto and a regional one in Montreal for at least five years.

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

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

This report by The Canadian Press was first published June 17, 2023.

Christopher Reynolds, The Canadian Press