There are some major changes coming to WestJet, Canada’s second largest airline…
In this post:
Sunwing Airlines will be integrated into WestJet
In 2022, it was announced that WestJet would acquire Sunwing Airlines and Sunwing Vacations. Just for some context on these two brands:
- WestJet is sort of a hybrid airline, which operates a fleet of over 100 aircraft, including Boeing 737s and Boeing 787s; the airline is large within Canada, as well as to the United States, Mexico, and the Caribbean, and the airline also operates some long haul routes
- Sunwing is a Canadian ultra low cost carrier with a fleet of roughly 30 Boeing 737s, which operates primarily to warm weather leisure destinations; the company isn’t just an airline, but is also big in the package holiday space
Even though this takeover just happened recently, WestJet already has major changes planned for the airline. WestJet has revealed internally that Sunwing Airlines will be integrated into the WestJet mainline fleet:
- We don’t yet know the timeline with which this will happen, though it’s believed the integration will occur within the next couple of years (so let’s say by 2025)
- WestJet will move to a one jet aircraft operating certificate (AOC)
- There’s no indication that Sunwing Vacations will be shut down, so it looks like the package holiday business will likely remain intact
- WestJet remains committed to the markets currently being served by Sunwing Airlines
Keep in mind that just last week, WestJet announced that its ultra low cost carrier subsidiary Swoop would also be integrated into the mainline fleet. Swoop is a subsidiary that WestJet directly created, rather than one that was acquired through consolidation.
This decision came as part of a new contract with WestJet pilots, as management and the union agreed that WestJet and Swoop would be integrated (so that Swoop pilots will get the same pay as WestJet pilots).
I’m curious how WestJet’s strategy evolves
I’ve always thought of WestJet as being Canada’s version of JetBlue. Both companies were founded by serial airline entrepreneur David Neeleman, and offer friendly service and a good passenger experience.
That’s not all the two airlines have in common, though. They kind of both struggle with deciding where they fit into the market, and how they can command fares that reflect their product.
Is WestJet trying to compete with Air Canada, and essentially be a national competitor? Or is the airline trying to compete against the growing number of ultra low cost carriers in Canada?
When WestJet acquired Sunwing, I assumed we’d at least see some integration between Sunwing and Swoop, since it doesn’t make sense to have both a low cost and a leisure subsidiary. But now we’re going to see both airlines integrated into the mainline WestJet fleet, so WestJet will become a much larger airline.
With this, will WestJet change its strategy when it comes to competing with Air Canada and other airlines, and make some major changes to its route network? Or will WestJet simply operate similar leisure routes as subsidaries did before, but with a higher cost structure?
The airline industry is tough under the best of circumstances. And it’s even tougher in a country like Canada, which is large and sparely populated, outside of a few major cities.
Bottom line
Major changes are coming to WestJet, as the airline plans to integrate Sunwing Airlines into the mainline WestJet fleet. This revelation comes just shortly after we learned that Swoop would also be integrated into the WestJet mainline fleet. So WestJet is going to get a lot bigger in the next couple of years, though it’s anyone’s guess how this plays out.
What do you make of Sunwing Airlines being merged into WestJet?
Wonder what this means for TUI in Europe as they used to partially own Sunwing and use their planes during the summer. My local airport has had a number of Sunwing planes in a hybrid TUI / Sunwing paint job based there.
The ones with Sunwing tails just get repainted back into the normal Tui livery.
There goes good fares. With little to no low cost competition who wins?
There are a "few" examples of airline within an airline working, like the aforementioned Air Canada/Rouge, Qantas/Jetstar. Others worth mentioning are Singapore/Scoot, IAG's Iberia/Vueling/Level (and the un-marketed IB Express), SWISS/Edelweiss (and the rest of the confusing constellation that is Lufthansa Group). The typical structure is a full service mainline carrier with a low cost, more leisure focused carrier. The problem tends to be when there is too much overlap in the carriers that they steal...
There are a "few" examples of airline within an airline working, like the aforementioned Air Canada/Rouge, Qantas/Jetstar. Others worth mentioning are Singapore/Scoot, IAG's Iberia/Vueling/Level (and the un-marketed IB Express), SWISS/Edelweiss (and the rest of the confusing constellation that is Lufthansa Group). The typical structure is a full service mainline carrier with a low cost, more leisure focused carrier. The problem tends to be when there is too much overlap in the carriers that they steal each others market share and become competitors. The market has to be large enough and segmented enough for both carriers to coexist. Finally, there is a cost in differentiating the carriers. Most often a mainline carrier will try to stave off a low cost entrant by starting their own "low cost subsidiary" with a cheaper labor contract - but then they lose focus on their primary carrier. In this example with WestJet - they can consolidate their market share as the spill carrier and AC alternative and avoid complicated labor agreements by consolidating under a single marketed carrier. Ultimately, even most "full service" carriers truly operate a hybrid model, as the true full service is typically only given on long-haul widebody service, subsidized by domestic and/or intraregional service with little differentiation between carriers.
Eh, since they’re still keeping the Sunwing Vacations brand, it’s not a big deal to be honest. Sunwing always seemed like it was much more of a vacation packages company than an airline anyways and the airline was just a secondary thing meant to take travelers to and from their own resorts and nothing more. Not to mention it operated much more like a charter airline than a scheduled one (most routes and schedules were...
Eh, since they’re still keeping the Sunwing Vacations brand, it’s not a big deal to be honest. Sunwing always seemed like it was much more of a vacation packages company than an airline anyways and the airline was just a secondary thing meant to take travelers to and from their own resorts and nothing more. Not to mention it operated much more like a charter airline than a scheduled one (most routes and schedules were very infrequent or outright unpredictable especially outside YYZ, their fleet grows and shrinks drastically between the winter season and the rest of the year, plus operating out of the largely abandoned midfield terminal at YYZ). Many people don’t understand that it’s not a normal LCC like Flair even though it’s advertised as one in certain places. From what I heard the airline itself always had a really poor reputation largely because of that.
ONEX might be tidying up WS in order to sell it on. Keeping the Sunwing Vacations brand was a requirement to get the takeover approved. WS will see some interesting changes going forward.
Westjet simply tried to use the same strategy of a lower cost airline within an airline that many other airlines have used and which Air Canada still does with Rouge.
Westjet's pilots said they wanted the strategy to end and the company agreed, likely because they realize the strategy really wasn't that successful - which is true for most airline within airline models.
WestJet will be stronger and more efficient as a single brand
Agreed. I have never believed in the LC airline within traditional airline model, as I think (insert airline name) should just better manage its core cost base. There would also seem potential to actually increase costs with the model as it requires dual operational overheads.
I do give credit to Qantas and Jetstar for somehow achieving success with the model, but there's no other dual operation airline that's had the same level of success...not...
Agreed. I have never believed in the LC airline within traditional airline model, as I think (insert airline name) should just better manage its core cost base. There would also seem potential to actually increase costs with the model as it requires dual operational overheads.
I do give credit to Qantas and Jetstar for somehow achieving success with the model, but there's no other dual operation airline that's had the same level of success...not that it stops airlines from keep trying. I'd love to read a case study on Qantas/Jetstar.