WestJet's Proposed Sunwing Deal Raises Competitive Concerns

Canada's Competition Bureau has potentially thrown cold water on WestJet's proposed purchase of leisure and tour competitor Sunwing Airlines.

In its report Wednesday, the regulator said the deal "would likely result in increased prices, less choice and decreases in service for Canadians." It identified 31 routes between Canada and the Caribbean and Mexico where competition would likely decrease as a result of the merger.

WestJet responded Wednesday by thanking the Competition Bureau for the report, and emphasizing the fact that it is only "advisory and non-binding."

"We look forward to bringing this transaction to life for the benefit of Canadian travelers, communities and employees," the Calgary-based airline said.

Canada's Minister of Transport, Omar Alghabra, will issue a final decision on the deal.

WestJet has said that, if the deal is approved, it would keep the Sunwing brand while merging Sunwing Vacations and WestJet Vacations into a new vacation division. And since announcing the transaction in March, WestJet has unveiled plans to shrink in eastern Canada — where Sunwing is strongest — and focus its own operations in western Canada.

WestJet hopes to close the purchase of Sunwing by next spring.