WestJet said it will also acquire travel booking website Sunwing Vacations, as part of the deal, which is expected to close in late 2022, subject to regulatory approvals.
The Canadian travel industry, including carriers like Air Canada, has been hit hard by the pandemic, with earlier restrictions, such as mandatory quarantine periods, having taken a toll on demand.
Traffic is expected to rebound as restrictions ease and travelers have the option of using either a rapid antigen test or a molecular PCR test to meet pre-entry requirements for vaccinated travellers.
Chris Murray, analyst at ATB Financial, said he did not expect the deal to create much new capacity. He sees this as an opportunistic move by WestJet to increase its exposure to leisure destinations, one of the earliest markets to recover.
The union representing Sunwing flight attendants said it would fight to defend the jobs of its 800 members following the announcement of the deal.
“The pandemic has been very tough on our industry, and our airline in particular,” said Rena Kisfalvi, president of Local 4055 of the Canadian Union of Public Employees (CUPE). “We will be following this proposal closely, and our sole focus will remain on defending our members’ jobs and livelihoods as this process moves forward.”