WestJet’s acquisition of Sunwing Airlines cleared for takeoff by Ottawa

The federal government has cleared the WestJet-Sunwing acquisition to go ahead despite concerns raised by Canada’s competition watchdog.

WestJet Group’s takeover of vacation-focused rival Sunwing Airlines has been approved by Canada’s transportation minister, clearing the runway for a major shakeup in the airline industry.

Omar Alghabra gave the Liberal government’s official sign-off on the deal on Friday.

First announced in March 2022, the deal will see Calgary-based WestJet acquire Toronto’s Sunwing as well as its tour operation business.

Financial terms of the acquisition between the two privately held airlines have not been disclosed, though Sunwing shareholders would gain a stake in WestJet’s business.

Under the agreement, WestJet will create a new tour operator unit headed by Sunwing CEO Stephen Hunter that includes Sunwing Vacations and WestJet Vacations as separate brands.

The acquisition would increase WestJet’s flight footprint to sun destinations and resorts.

The federal Competition Bureau has raised concerns about the merger, arguing the deal will likely result in higher prices and decreased service for Canadians.

The decrease in competition, particularly in the vacation space where the airlines have overlapping routes, will affect the rates Canadians are offered for getaways, the watchdog said in a letter to Alghabra last fall.