New reports say that WestJet plans to integrate Sunwing into its mainline. The news comes after WestJet Group completed its acquisition of Sunwing just weeks ago - and also after WestJet confirmed earlier this week that its budget airline Swoop would also be rolled into the main WestJet brand.
The new collective agreement reached with the company's pilots in MAY reportedly makes it possible to unify all workers under its various airlines into one air operator's certificate (AOC).
As Open Jaw has reported, WestJet has already made public its plans to integrate Swoop by OCT, with Swoop employees moving to WestJet.
But a 15JUN report in ch-aviation quotes WestJet CEO Alexis von Hoensbroech confirming Sunwing is also part of the same plan. "We will merge all AOCs into one because there is no point in keeping these AOCs separate. It's creating more complexity than it actually creates value. So we'll put everything into one AOC and have a nicely scaled-up operation that will make us very strong.
"This integration will enhance our ability to serve a broader spectrum of guests. Instead of only 16 aircraft serving the ultra-low-cost market, each aircraft in our 180-strong fleet will offer ultra-affordable travel options through to a premium inflight experience."
Airlines vs Tour Operators
While that strategy encompasses the Swoop integration, Sunwing is a slightly different beast, with von Hoensbroech acknowledging, "On the airline side, we are still working on the details of how we will develop the combined offering. But on the airline side, the branding is not as important as on the tour operator side."
He indicated that while WestJet Vacations and Sunwing Vacations would be merged into one business, the two brands would remain, each targeting a different segment of the market. Combined, the two brands would become "the largest tour operator across Canada," the CEO says.
Best Laid Plans
While the WestJet Group has now acknowledged its strategy to integrate all its airlines, it has to tread carefully to avoid violating the terms the federal government imposed when it agreed to the acquisition of Sunwing by WestJet, despite the recommendations of the government's own Competition Bureau.
The list of "strict and enforceable terms and conditions intended to protect the interests of travellers" imposed by Ottawa included:
- Extending Sunwing vacation package offerings to five new Canadian cities;
- Maintaining capacity on routes most affected by the merger;
- Increasing regional connectivity;
- Improving baggage handling for better passenger experience;
- Maintaining a vacations business head office in the Toronto area and a regional office in the Montreal area for a minimum of five years;
- Increasing net employment by 20 per cent over three years in the Toronto office;
- Ensuring better passenger experience by investing in IT technology solutions to improve Sunwing's communications;
- Supplying airfare data on vacation packages for monitoring of post-acquisition price trends; and
- Gradually ending Sunwing's seasonal leasing practice to protect Canadian jobs.
Von Hoensbroech has addressed at least one of those conditions as it relates to integrating Sunwing, saying seasonal leasing would be permitted through 2025, after which he believes WestJet could "fill seasonal demand gaps through its domestic traffic where demand peaks in the summer, being less dependent than Sunwing on seasonal winter sun destination traffic," by positioning aircraft to fly to Europe and Asia in the summer, while deploying them on sun destination routes in the winter months.
