Do you find it hard to save up for sunny vacations down south?
While there are several vacation packages available for locals looking to escape "Raincouver" during the winter, not all of them are affordable. And many of the more economical options don't feature properties you'd feel comfortable staying at (unless you are comfortable with letting the bed bugs bite).
In March, WestJet, Canada's second-largest airline, announced that it will be acquiring Sunwing Vacations and Sunwing Airlines. It said it would create a new tour operating business that will include both Sunwing Vacations and WestJet Vacations Inc.
The airline said the merger will provide travellers with more "competitive airfares and affordable vacation packages."
But many Canadians worry that the proposed merger will have a negative impact on the travel industry.
In a tweet, a local woman quipped: "yay, less choice. Always great for the people of Canada." Similarly, one person asked if the competition bureau is "[okay] with this fiasco," adding that "people can't get any service from WestJet now" and that "this will be brutal for the consumers."
In May 2020, WestJet laid off 3,000 people and cancelled over 4,000 domestic flights weekly as the COVID-19 pandemic hammered the airline industry. Many people expressed frustration when the airline announced a ramped-up summer schedule despite not yet refunding thousands of people's airfare that was unexpectedly cancelled.
An exasperated Canadian traveller wrote: "You're able to afford to buy Sunwing but can't refund people's flights and vacations because it was cancelled due to COVID. Give people back their money."
Transport Canada is asking for the public's input on the proposed acquisition and if it will positively or negatively affect the air travel experience for Canadians. Input from the Commissioner of Competition on how could it could impact competition in the air sector will also be included.
The consultation will close on July 22.
One week to go: share your views on the proposed acquisition of Sunwing Vacations and Sunwing Airlines by WestJet Airlines Ltd. ✈: https://t.co/cQDam0nIrw#AirTravel pic.twitter.com/CSuZ6y5w8R
— Transport Canada (@Transport_gc) July 17, 2022
Flights from Vancouver: WestJet announces Sunwing merger
John Korenic, an aviation consultant and an adjunct professor at the University of British Columbia's Sauder School of Business, told Vancouver Is Awesome that mergers generally result in less competition but they also open the door for other companies to offer new products.
Flair Airlines, Canada Jetlines, and Lynx Airlines currently offer low-cost flight options in Canada. Right now, only WestJet's budget brand, Swoop, offers vacation packages called "Getaways."
Swoop's flight and accommodation packages, powered by Expedia, generally offer a wider variety of economical options compared to WestJet's vacation product, WestJet Vacations, Korenic explained.
In addition to WestJet Vacations, Swoop Getaways, and Sunwing Vacations, Canadians can currently browse holiday packages with Air Canada Vacations and Air Transat.
But the lion's share of Sunwing's customers uses the airline's vacation product, noted Korenic, who added that the airline is largely seasonal as a result. Sunwing has been supplementing this demand by leasing aircraft from Europe during its busy season in the winter. If the merger moves forward, WestJet could dedicate otherwise seasonal aircraft to operate year-round in Canada.
"They both operate the Boeing 737 next generation and also the 737 Max aircraft. If and when they merge, it would be fairly streamlined in terms of having similar fleets."
As a rule, mergers tend to reduce competition and this generally drives up prices, said Korenic.
"But at the same time, it creates opportunities for new up-start airlines to come into the market."
Sunwing has about 40 aircraft and WestJet has roughly 180, so there's a considerable difference in size between the two companies, Korenic added. In other words, the merger will have an effect on the industry but it wouldn't be as significant as one between airlines with comparable fleet sizes.
