In March 2022, WestJet Airlines Ltd. of Canada purchased Sunwing Airlines, a low-cost competitor, as well as the tour business of Sunwing Vacations. This is due to increased competition in a sector recovering from the two years of instability caused by the coronavirus outbreak.
The Sunwing agreement follows a terrible two years for the airline sector. During that time, the COVID-19 pandemic halted travel demand, and large Canadian carriers were forced to cut employees, cancel flights, and seek government aid.
Sunwing’s primary business is organizing tours. It was established as a division of Sunwing Travel Group in 2005. It provides domestic travel for Canadians and trip packages to warm locales like the Caribbean and Mexico. Stephen Hunter, CEO of Sunwing, will oversee the combined Sunwing Vacations and WestJet Vacations Inc. tour operating companies under the new arrangement.
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What happened to Sunwing?
Stephen Hunter took drastic measures to protect Sunwing Airlines and Sunwing Vacations from the pandemic. He made decisions like laying off employees and borrowing money. This was done to guarantee that the company would still exist when constraints were eased. Additionally, Canadians might once again go south during the winter.
However, the family-owned Sunwing’s CEO knew the bills would soon become due. The tour company has a $327 million federal loan repayment owing at the start of this year. A boom in vacation travel occurred at the same time. To lease planes and rehire pilots and flight attendants, Sunwing had to pay money.
Mr. Hunter discussed the competing demands of debt repayment. This forced Sunwing to reconsider outrageous offers from WestJet Group while also needing to invest more money in growing the business. Consequently, he decided to sell the company his family founded in 2002.
Who owns Sunwing now?
Sunwing’s financial difficulties mirror owners of other privately held businesses. Thus, it had been affected by the pandemic, including hotels, restaurants, gyms, ski resorts, and a wide range of other establishments. If they made it through the previous two years, they cut expenses, spent their savings, and took out loans.
Now, these business owners—family-owned companies dominate the hotel industry. They face the task of restoring their operations while paying off debt. The owners of Sunwing are in a fortunate position since they have a wealthy buyer. Similar challenges are causing other companies to fail.
Mr. Hunter’s family and Sunwing minority stakeholder TUI Group, a German travel agency with 49 percent ownership, would accept WestJet shares. This was done in exchange for their company. 30 hotels in the tropics will still be owned by the Hunter family and TUI.
Because it declined government funding during the pandemic, WestJet stands out among Canadian airlines. According to Mr. Hunter, this move made the Calgary-based airline a more desirable partner. Both WestJet and Sunwing refused to comment on the transaction’s worth.
According to WestJet’s Chief Executive, the merger of the two businesses will benefit customers and create more jobs in Canada. They combined Sunwing, a large tour operator with a small airline, with WestJet, a large airline that’s also a small tour operator.
Sunwing will let WestJet expand its tour operations. The operations were previously restricted to Florida, the Caribbean, and Mexico and now include locations like Arizona, California, Hawaii, and Europe. Barclays Investment Bank and Goodmans LLP are WestJet’s transaction consultants.
Are Sunwing flights back on schedule?
Weekly direct flights from Hamilton to tropical locations start again around the holidays. The famous Sunwing Airlines previously flew between Canada and the warm south. It is now resuming weekly direct flights from John C. Munro Hamilton International Airport to Cuba, Mexico, and the Dominican Republic.
The Dominican Republic’s Punta Cana, Mexico’s Cancun, Cuba’s Cayo Coco, Varadero, Holguin, and Mexico’s Cancun will receive weekly flights beginning in December. Until the second week of April, the nonstop flights will run for four months.
This year, the airline added Varadero and Holguin, Cuba, to the list of destinations. It removed Montego Bay, Jamaica, from Hamilton’s direct flight schedule. The five locations for this year are “our most famous and decided to seek sun destinations among our customers in the Hamilton area, the neighboring Niagara Region, and the western GTA,” according to Andrew Dawson, president of tourist activities for Sunwing.
Winter travel is already experiencing “great demand,” according to Dawson. He also said that “total capacity is more than twice what it was during the previous winter season.”
Since 2013, the low-cost airline based in Etobicoke has been serving the Hamilton area.”We’re delighted that Sunwing will come back to Hamilton International Airport this December as sunseekers in the area look to flee the snow and make a start on a tropical getaway this winter.” This was said by Cole Horncastle, executive managing director of John C. Munro Hamilton International Airport.
The airline will serve more than 15,000 residents of the Hamilton area over four months this winter. According to Dawson, 189 seats per aircraft and five flights per week departing from Hamilton International Airport.