Canadian carrier WestJet is to take over rival Sunwing Airlines and its tour operating arm Sunwing Vacations.
The combination “will enable both companies to protect and create jobs and rebuild strength in the Canadian travel industry at a critical time,” WestJet said.
A new tour operating business unit will be created under the WestJet Group, to include both Sunwing Vacations and WestJet Vacations.
Sunwing’s current shareholders will become equity holders in the WestJet Group.
The WestJet Group of companies will expand to include Sunwing Airlines in the deal which is due for completion by the end of the year subject to regulatory approvals.
This will add increased capacity, dedicating otherwise seasonal aircraft to operate year-round in Canada, instead of Sunwing supplementing seasonal demand with imported aircraft.
The acquisition, for an undisclosed sum, will improve the WestJet’s ability to offer more affordable fares by immediately expanding its low-cost footprint in Canada, the Calgary-based carrier claimed.
The deal came less than a month after former British Airways boss Alex Cruz was appointed to the WestJet board of directors.
WestJet is to start flights from Heathrow four times a week to its Calgary hub from March 26 in addition to services to Canada from Gatwick.
The airline’s chief executive Alexis von Hoensbroech, formerly in charge of Austrian Airlines, said: “We are bringing together two highly complementary businesses with powerhouse brands to strengthen our successful leisure business and deliver greater value to our guests.
“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.
“It creates new opportunities for our people, our operational partners and supports the recovery from a global pandemic that has been particularly challenging for the Canadian travel and tourism industry including local airports and businesses we work closely with.”
Sunwing chief executive Stephen Hunter added: “We have a very promising future as part of the WestJet Group, which is one of the only airlines in the world that has not issued debt or equity during the pandemic, or accepted sector-specific government aid.
“The combination of their strong balance sheet and growth trajectory with Sunwing’s unparalleled expertise in creating differentiated vacation packages will ensure the success of the new vacation division.”