The Competition Bureau has concluded that WestJet's proposed acquisition of Sunwing Vacations and Sunwing Airlines is likely to result in a substantial lessening or prevention of competition in the sale of vacation packages to Canadians.

The Bureau's report is advisory and non-binding but will support the Minister of Transport's public interest assessment.

The Bureau's concerns are outlined in a report delivered to the Minister of Transport by the Commissioner of Competition.

Eliminating the rivalry between these integrated airlines and tour operators would likely result in increased prices, less choice and decreases in service for Canadians. It would also likely result in a significant reduction in travel by Canadians on a variety of routes where their existing travel networks overlap.

An emailed statement from Sunwing states:

“We appreciate the Competition Bureau’s due diligence in the regulatory review process. In its report, the Bureau acknowledged the significant impact of COVID-19 on the industry. The routes identified as concerns in the Bureau’s report are predominantly in Western Canada, account for a very small portion of Sunwing’s operations (just over 10% of all seats) and are primarily seasonal versus year-round routes. Also of note, Sunwing no longer operates six of the routes mentioned in the report. We remain confident that this transaction is good news for Canadians. The combination of WestJet’s and Sunwing’s complementary businesses will deliver more affordable vacation packages and competitive airfares, while enabling us to protect and create jobs at a critical time for the travel industry. We look forward to the next steps in the regulatory process, including continued collaboration with Transport Canada to ensure a timely approval on the transaction.”

WestJet also responded a statement from Angela Avery, WestJet Group Executive Vice-President and Chief People, Corporate and Sustainability Officer.

"We thank the Competition Bureau and welcome their report. We look forward to bringing this transaction to life for the benefit of Canadian travellers, communities and employees."

The final decision, made by the Cabinet on the Minister of Transport's recommendation, will consider additional factors presented in the WestJet Group's application, including the preservation of Sunwing's brand, the commitment to maintain Sunwing's Toronto and Montreal offices, new flying that will be created by retaining Sunwing's aircraft in Canada year-round and the resulting new employment opportunities.

The Bureau’s review determined that these effects would apply to 31 routes between Canada and Mexico or the Caribbean, which make up less than 1 in 8 of Sunwing's seats. The transaction also represents a merger of the only two integrated airlines and tour operators offering non-stop service on 16 of these routes.

The impacts of the COVID-19 pandemic were considered extensively to identify concerns regarding the potential prevention or lessening of competition that may occur as a result of the proposed merger. The Bureau examined competition between WestJet and Sunwing’s pre-pandemic networks as well as their current plans.

Transport Canada has until December 5, 2022 to complete its public interest assessment and provide it to the Minister.