Read Story (Subscription Required): Montreal Airport fears Westjet takeover of Sunwing Airlines will see flights shift to Toronto - The Globe and Mail
The Montreal airport authority fears that WestJet Airlines’ proposed takeover of Sunwing Airlines and Vacations will cause Sunwing to reduce flights at Montreal-Trudeau International Airport and shift operations to Toronto, undermining the airport’s competitiveness.
Aéroports de Montréal (ADM) raised its worries in a letter to Transport Canada, which is conducting a review of Calgary-based WestJet’s proposal to buy the Toronto-based leisure airline and Sunwing Vacations, announced on March 2.
The airport operator does not express opposition to the takeover, but said it is concerned that Sunwing will move more flights to Toronto Pearson Airport after the takeover and add Toronto connections to flights heading to other destinations. This would undercut a years-long effort by the airport to increase the number of direct flights, which are more attractive to passengers than connecting routes. Direct flights are also more “sustainable” because they burn less fuel, ADM said in the letter, a copy of which was obtained by The Globe and Mail.
“We are concerned that the acquisition of Sunwing by WestJet Airlines Ltd. could lead to a shift of Sunwing’s operations to [Toronto]‚” said the letter, written in French and signed by Stéphane Lapierre, ADM’s vice-president of operations. “This would be very harmful for ADM and for [Montreal-Trudeau] and would notably have the consequences of reducing the attractiveness of Montreal in terms of service, increasing the number of flights between [Montreal] and [Toronto], reducing the number of direct flights … for the Montreal community.”
WestJet spokeswoman Morgan Bell did not address a question on ADM’s concerns about adding connections to Toronto from Montreal. In an e-mail, she said the takeover is expected to increase WestJet’s leisure travel network in Eastern and Western Canada. Sunwing Vacations will be headquartered in Toronto, and have a Quebec head office in Laval, Ms. Bell said.
Sunwing did not respond to an e-mail.
John Gradek, who teaches aviation leadership at McGill University, said Sunwing is very strong in the Quebec and Montreal markets, and dismissed ADM’s fears that Sunwing would scale back operations there. “They’re trying to grasp at straws,” Mr. Gradek said. Almost all leisure carriers offer direct flights to established destinations, he said, with the exception of Air Canada Vacations to some places.
As a leisure airline, Sunwing is interested in more than selling seats – it offers hotel stays and all-inclusive packages at tropical resorts in such places as Cuba, Jamaica, and Mexico. “Typically, Sunwing does everything to satisfy the Montreal market, and if demand is not there, they won’t fly,” Mr. Gradek said.
Montreal-Trudeau is Canada’s third-busiest airport, with 34 airlines and more than 20 million passengers in 2019. In 2019, before the pandemic upended the travel industry, Sunwing flew to 27 destinations from Montreal-Trudeau, accounting for 20 per cent of the airport’s tropical vacation business. WestJet has reduced its operations in Eastern Canada to fend off new competition from Flair Airlines and Lynx Air, and flies to four destinations from Montreal-Trudeau.
Should the Sunwing takeover be approved, WestJet will use Sunwing to serve the Ontario market, Mr. Gradek said.
The two airlines did not reveal a purchase price for privately held Sunwing, but said they hoped that the government would approve the deal by late 2022.
Transport Canada said that its public interest assessment will be submitted by December 5 to Transport Minister Omar Alghabra, who will make a recommendation to Cabinet after receiving a report from the Competition Commissioner. There is no deadline for a decision.