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Critics were quick to speak up following WestJet Group’s confirming its intentions to integrate both its budget airline Swoop as well as newly-acquired Sunwing Airline into its mainline air network.
As Open Jaw reported 16JUN, the new collective agreement reached with the company's pilots in MAY reportedly makes it possible to unify all workers under its various airlines into one air operator's certificate (AOC).
WestJet Group says it plans to integrate Swoop by OCT, with Swoop employees moving to WestJet. Sunwing Airline’s integration, also confirmed to Open Jaw on 16JUN, is expected to take “up to a couple of years,” according to Len Corrado, President, Sunwing Airlines.
Speaking about merging all the airlines under one AOC, WestJet CEO Alexis von Hoensbroech claimed, "This integration will enhance our ability to serve a broader spectrum of guests. Instead of only 16 aircraft serving the ultra-low-cost market, each aircraft in our 180-strong fleet will offer ultra-affordable travel options through to a premium inflight experience."
That statement certainly affirms WestJet Group’s commitment to fulfill the requirements placed upon it by Ottawa when it approved the Group’s acquisition of Sunwing only weeks ago.
The approval followed a regulatory approval process that included consultations with Canadians, consumer protection groups, unions and industry, as well as the findings of the federal government’s Commissioner of Competition.
The Commissioner of Competition opposed the acquisition. As Open Jaw reported, Canada's Competition Bureau warned of “substantial lessening or prevention of competition” in sales of vacation packages combining air and resorts stays on 31 routes it identified between Canada and the Caribbean and Mexico. The Competition Bureau contended that WestJet would "gain a monopoly" on 16 of those routes, and added that, in its estimation, "eliminating the rivalry between these integrated airlines and tour operators would likely result in increased prices, less choice and decreases in service for Canadians. It would also likely result in a significant reduction in travel by Canadians on a variety of routes where their existing travel networks overlap."
In an attempt to mitigate the concerns of the Competition Bureau as well as consumer advocates, Ottawa put “strict” rules in place when it approved WestJet’s acquisition of Sunwing, to preserve jobs, ensure service to Canadian regions and monitor fares.
Nevertheless, on word of the integration of both Swoop and Sunwing Airlines into WestJet’s mainline on 16JUN, critics came out again in full force.
One travel agency owner pointed out that the Sunwing integration will mean more aircraft and more pilots available to help avoid repeats of instances of pax stranded for days abroad during winter storms last year.
But most agree with John Gradek, a professor with McGill University's aviation management program, who told CBC News flatly that the bottom line is that:
“Consumers will have less choice, and consumers will pay more.”
He added that, for many airlines in Canada, “Post pandemic, business has been good. Planes are full, fares are high.”
That’s giving airlines confidence, he says, despite the cost of WestJet pilots’ new collective agreement that gives them a 24 per cent pay raise over the next few years. Gradek predicts WestJet will look to find ways to make more money and cut costs to pay for its increased labour costs.
In addition to “streamlining” redundant positions, it could try to swallow up other discount carriers to secure bigger market share and reduce downward pressure on airfares.
“Flair and Lynx are probably in WestJet's sights,” Gradek told CBC.
