WestJet to buy low-cost rival Sunwing in foray into vacation travel

WestJet Airlines Ltd. is buying Toronto-based rival Sunwing Airlines Inc. in an effort to tap into the vacation travel market as COVID-19 restrictions ease.

The companies say the takeover, which was announced Wednesday, will see the creation of a new tour operating business that combines Sunwing Vacations and WestJet Vacations Inc.

The purchase price for the Sunwing deal, which is subject to government approval, was not disclosed.

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," said Alexis von Hoensbroech, CEO of WestJet, in Wednesday's announcement.

The Sunwing deal comes after a dismal two years for the airline industry, which saw major Canadian operators reduce staff, cut flights and seek government assistance while the COVID-19 pandemic shuttered demand for travel.

Onex Corp. bought Calgary-based WestJet in 2019 and soon found itself reducing staff and flights as restrictions took hold a few months later.

Sunwing, primarily a tour operator, was founded in 2005 as a subsidiary of Sunwing Travel Group. It offers domestic travel to Canadians and vacation packages to sunny destinations including the Caribbean and Mexico.

Under the new structure, Sunwing CEO Stephen Hunter will lead the tour operating business that combines Sunwing Vacations and WestJet Vacations Inc.

As a result of the deal, Sunwing says it will also no longer need the pandemic-related aid it received from the federal government in early 2021.

Jacob Lorinc is a Toronto-based reporter covering business for the Star. Reach him via email: jlorinc@thestar.ca