WestJet to shut down Sunwing Airlines, merge it with mainline business

WestJet is planning to wind down Sunwing Airlines, integrating the low-cost carrier into its mainline business within two years as part of a plan to streamline operations.

In an internal memo obtained by The Canadian Press, Sunwing Airlines president Len Corrado said the change will open up markets for the 18-year-old company as well as its workers.

"WestJet will eventually move to a one jet aircraft operating certificate (AOC) model and Sunwing Airlines will be integrated into WestJet. This is a long-term move that will unlock greater scale and growth opportunities for our people, and specifically for our airline employees within the group," Corrado said in the memo, dated Wednesday.

"While exact timelines are still being finalized, the integration is expected to take up to a couple years."

The decision comes the week after WestJet opted to fold budget subsidiary Swoop's operations under its flagship banner. Both moves magnify the major consolidation of the Canadian aviation market that followed WestJet's acquisition of Sunwing's main airline and vacation divisions last month.

The memo gave no indication that Sunwing Vacations would also shut down, suggesting that WestJet planes could be flying Sunwing tour package customers to their sun-soaked getaways.

"The WestJet Group remains committed to growing sun flying in the East alongside expansion plans in Western Canada, and this strategy will only be strengthened as we ultimately transition to a one jet AOC," Corrado wrote.

WestJet and Sunwing did not immediately respond to requests for comment on Saturday.

WestJet announced on June 9 it would merge Swoop with its main business by late October as the country's second-biggest airline recalibrates amid a fiercely competitive market.

The shift came five years after Swoop first surfaced as a response to discount rival Flair Airlines' launch in 2017.

It also landed after pilots with WestJet and Swoop ratified a new collective agreement that brings them onto a level pay scale, giving them a 24 per cent pay bump over four years.

In an interview last week, WestJet CEO Alexis von Hoensbroech said he mulled keeping Swoop separate, but concluded higher wages for its flight crews made the option less feasible.

In March, the federal government approved WestJet's takeover of Sunwing Vacations and Sunwing Airlines, despite a warning from the Competition Bureau that the purchase would likely result in higher prices and decreased services, especially around package deals.

In signing off on the deal, Ottawa attached conditions that include extending Sunwing packages to five new cities, maintaining capacity on the most affected routes and keeping both a vacations business head office in Toronto and a regional one in Montreal for at least five years.

The agreement added some 2,000 employees and 18 Boeing 737s to WestJet's 130-aircraft fleet, made up entirely of Boeing planes, according to the federal aircraft registry. This includes Swoop's planes but not those of regional service WestJet Encore.

This report by The Canadian Press was first published June 17, 2023.