Sunwing Deal To Broaden WestJet Leisure Offer

The acquisition of Toronto-headquartered Sunwing will increase WestJet’s footprint in leisure markets as demand continues to rebound.

Credit: Joe Pries

WestJet has agreed to buy Canadian counterpart Sunwing Airlines and tour operator Sunwing Vacations, broadening its exposure to leisure destinations in Latin America and the Caribbean as the market recovers.

As part of the deal, WestJet will create a new business unit led by Sunwing CEO Stephen Hunter that includes Sunwing Vacations and WestJet Vacations as separate brands.

WestJet also plans to add capacity by turning seasonally operated aircraft into year-round service. Sunwing currently meets seasonal demand by leasing the bulk of its fleet through the winter months.

“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,” WestJet CEO Alexis von Hoensbroech said.

From a network perspective, the agreement sees WestJet bolster its presence on leisure services to warm weather destinations in Mexico, Cuba and the Dominican Republic in particular. It also allows the Calgary-based carrier to expand further in eastern Canada, mainly Ontario and Quebec where Sunwing has a strong presence.

For the week commencing Feb. 28, Sunwing is offering some 66,300 seats across its network, data provided by OAG Schedules Analyser shows. Toronto Pearson (YYZ) and Montreal (YUL) are its largest departure points.

In total, the leisure airline flies from Canada to 19 destinations in 11 countries. Cancun (CUN) in Mexico, Punta Cana (PUJ) in the Dominican Republic, and Varadero (VRA) in Cuba are its top three points by seat capacity.

Analysis of the two airlines’ respective networks shows that of the 21 domestic and 77 international routes operated by Sunwing this week, Westjet provides direct competition on nine domestic and 25 international sectors. This means that of the 98 airport pairs served by Sunwing, the airlines overlap on just 35% of them.

The main markets where the carriers compete are Toronto Pearson-Cancun, Toronto Pearson-Punta Cana, and Toronto Pearson-Montego Bay (MBJ).

Looking at the markets where there is no overlap, Sunwing serves five destinations that are not currently part of WestJet’s network. They are Cayo Coco (CCC) and Santa Clara (SNU) in Cuba; Guatemala City (GUA) in Guatemala; Río Hato (RIH) in Panama; and Windsor (YQG) in Canada.

However, the latest schedules indicate that WestJet plans to resume Windsor flights in June following an absence of almost three years.

As well as having complementary networks, WestJet and Sunwing have a certain level of fleet commonality as both are all-Boeing operators. Aviation Week’s Fleet Discovery database shows WestJet mainline has 99 aircraft in service and three in storage. Thirty-nine are Boeing 737-700s, 40 737-800s, 14 737-MAX 8s and six 787-9. Sunwing’s fleet comprises 23 737-800s and seven 737-MAX 8s.