Higher airfares are likely upshot of Sunwing WestJet integration, experts say
WestJet's decision to bring Sunwing Airlines under its main banner could mean less service and higher fares – particularly in Western Canada and smaller cities across the country, experts say. Sunwing told employees it was being absorbed by its new owner on Wednesday, less than a week after WestJet announced plans to shutter discount subsidiary Swoop. Given the narrower flight options and pricier tickets likely to result from the merger of former competitors, the latest move is "not good news" for consumers looking to head to warmer getaways, said John Gradek, who teaches at McGill University's aviation management program. "There will be a reduction in air services and there will be a corresponding increase in prices," Gradek said. WestJet and Sunwing comprise 37% of seat capacity on direct flights to sun destinations, and 72% from Western Canada, according to an October report from the Competition Bureau. WestJet completed its acquisition of Sunwing's main airline and vacation divisions last month in a major consolidation of the Canadian aviation market. As a condition of Ottawa's sign-off on the deal, the parties pledged to maintain capacity on the most affected routes and keep both the Sunwing Vacations head office in Toronto and a regional one in Montreal for at least five years. WestJet confirmed in an email that Sunwing Vacations will continue as a separate entity, setting the stage for the Calgary-based carrier to fly Sunwing tour package customers to their resort spots. Sunwing Vacations has been a price leader in the Canadian market, said Gradek. "The question is, how much does WestJet charge Sunwing Vacations for the use of those airplanes?" But aviation consultant Rick Erickson said he thinks that rival carriers will ensure a healthy mix of competition for sun destinations, with some fares barely affected. "I don't think there's going to be a great deal of change, largely because consumers are fairly savvy, the Competition Bureau's out there watching and there are other players in the market," he said.<br/>
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Higher airfares are likely upshot of Sunwing WestJet integration, experts say
WestJet's decision to bring Sunwing Airlines under its main banner could mean less service and higher fares – particularly in Western Canada and smaller cities across the country, experts say. Sunwing told employees it was being absorbed by its new owner on Wednesday, less than a week after WestJet announced plans to shutter discount subsidiary Swoop. Given the narrower flight options and pricier tickets likely to result from the merger of former competitors, the latest move is "not good news" for consumers looking to head to warmer getaways, said John Gradek, who teaches at McGill University's aviation management program. "There will be a reduction in air services and there will be a corresponding increase in prices," Gradek said. WestJet and Sunwing comprise 37% of seat capacity on direct flights to sun destinations, and 72% from Western Canada, according to an October report from the Competition Bureau. WestJet completed its acquisition of Sunwing's main airline and vacation divisions last month in a major consolidation of the Canadian aviation market. As a condition of Ottawa's sign-off on the deal, the parties pledged to maintain capacity on the most affected routes and keep both the Sunwing Vacations head office in Toronto and a regional one in Montreal for at least five years. WestJet confirmed in an email that Sunwing Vacations will continue as a separate entity, setting the stage for the Calgary-based carrier to fly Sunwing tour package customers to their resort spots. Sunwing Vacations has been a price leader in the Canadian market, said Gradek. "The question is, how much does WestJet charge Sunwing Vacations for the use of those airplanes?" But aviation consultant Rick Erickson said he thinks that rival carriers will ensure a healthy mix of competition for sun destinations, with some fares barely affected. "I don't think there's going to be a great deal of change, largely because consumers are fairly savvy, the Competition Bureau's out there watching and there are other players in the market," he said.<br/>
