WestJet is bullish on leisure travel making a significant rebound, and the Sunwing acquisition would deepen WestJet's foothold in the sector.
Canadian airline WestJet Group, owned by private equity firm Onex Corp, said on Wednesday it would buy leisure rival Sunwing Airlines for an undisclosed amount as it looks to tap into a rebound in air travel.
WestJet said it would also buy travel booking website Sunwing Vacations, as part of the deal, which is expected to close in late 2022, pending regulatory approval.
Canada’s travel industry, including carriers such as Air Canada, were hit hard during the pandemic with earlier restrictions like mandatory quarantine periods dealing a blow to demand.
Traffic is expected to rebound as restrictions relax and travellers have the option to use either a rapid antigen test or a molecular PCR test to meet pre-entry requirements for vaccinated travellers.
ATB Financial analyst Chris Murray said he did not expect the deal would create much new capacity. He sees it as an opportunistic move by WestJet to broaden its exposure to leisure destinations, one of the earliest markets to recover.
The union representing Sunwing flight attendants said it would fight to defend the jobs of its 800 members in the wake of the deal’s announcement.
“The pandemic has been very tough on our sector, and on our airline in particular,” said Rena Kisfalvi, President of Local 4055 of the Canadian Union of Public Employees (CUPE). “We’ll be keeping a close eye on this proposal, and our sole focus will remain on defending our members’ jobs and their livelihoods as this process moves forward.”
(Reporting by Aishwarya Nair in Bengaluru and Allison Lampert in Montreal; Editing by Amy Caren Daniel and Aurora Ellis)
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Tags: acquisitions, airlines, aviation, mergers and acquisitions, sunwing, westjet
Photo credit: WestJet is banking on a significant rebound, and it plans to acquire Sunwing Airlines. BriYYZ / Flickr