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Ottawa Approves WestJet's takeover of Sunwing Airlines

Canada’s federal government in Ottawa has approved WestJet Airlines' takeover of Sunwing Airlines.

The takeover will enable Calgary-based WestJet Airlines to boost its vacation offerings as it adds Sunwing to its operations, though the two brands will be marketed separately.

Both WestJet and Sunwing are privately held companies and financial terms of the deal were not disclosed.

Last fall, Canada’s Competition Bureau warned that the purchase of Sunwing by WestJet, which is Canada's second largest airline, would result in higher prices and decreased service, particularly around vacation packages.

As a result, the federal government placed conditions on the acquisition that include extending Sunwing packages to five new cities, maintaining capacity on impacted routes, and keeping a vacations business head office in Toronto and a regional one in Montreal for five years.

Other conditions include a requirement to improve regional connectivity and baggage handling, boost employment at Sunwing's Toronto unit, and end seasonal plane-leasing to help protect Canadian jobs.

WestJet and Sunwing comprise 37% of the seat capacity on non-stop flights between Canada and sun destinations such as the Caribbean.

Sunwing is family owned and WestJet is owned by Toronto-based investment firm Onex Corp. (ONEX), which took the carrier private in 2019.

Onex’s stock has declined 14% over the last 12 months to trade at $70.47 per share. Over the past five years, the stock has decreased 26%.