SWG/WJ?

[rudder]

https://www.bnnbloomberg.ca/westjet-airlines-is-said-near-deal-to-acquire-sunwing-1.1731321

[rudder]

Looks like a done deal.

https://www.theglobeandmail.com/business/commentary/article-sunwing-deal-is-just-the-first-as-hospitality-sector-faces/

 

Entrepreneur Stephen Hunter took tough steps to ensure Sunwing Airlines and Sunwing Vacations survived the pandemic, cutting staff and borrowing money to ensure the business would still be around when restrictions lifted and Canadians could once again head south in the winter.

However, the chief executive of family-owned Sunwing knew the bills would eventually come due.

As this year began, the tour operator faced repaying $327-million in federal government loans. At the same time, vacation travel was taking off and Sunwing needed to spend money to lease aircraft and rehire pilots and flight attendants. Mr. Hunter said the conflicting pressures of paying down debt while needing to put more capital into expanding the company prompted Sunwing to revisit pre-pandemic overtures from WestJet Group and agree to sell the business his family launched in 2002.

“We got to the point, in the last few years, where we couldn’t grow as much as we wanted to grow,” Mr. Hunter said in an interview. He said Sunwing was looking at options for dealing with the seasonality of its business – its fleet goes from 40 aircraft in the winter to 15 in the summer – before the pandemic burdened the company with debt. He said tapping the market reach and financial strength of WestJet and parent Onex Corp. “helps get us over this hump.”

Sunwing’s financial challenges mirror what is playing out for owners of hotels, restaurants, gyms, ski hills and all sorts of other privately held businesses hit by the pandemic. If they survived the past two years, they did so by slashing costs, burning through savings and borrowing money.

Now these entrepreneurs – the hospitality sector is dominated by family-owned businesses – face the challenge of rebuilding their operations while paying down debt.

Sunwing’s owners are in the fortunate position of having a deep-pocketed buyer. Other companies facing the same headwinds are going out of business. Toronto-based Sky Regional Airlines Inc. shut down last March, ending a decade-long run.

Mr. Hunter’s family and Sunwing minority shareholder TUI Group, a German tour operator with a 49-per-cent stake, will take WestJet shares in exchange for their business. The Hunter family and TUI will continue to own a collection of 30 hotels in the tropics.

Sunwing is a private company but did disclose that it borrowed $227.1-million under a federal government loan program and drew an additional $99.6-million from a credit facility. This was expensive capital. The debt carried a 5-per-cent interest rate, and Mr. Hunter said that, as a private company, Sunwing was also forced to pay an additional 6 per cent for credit insurance.

“With or without this deal, we were looking to repay that financing,” he said. “This will turn out to be a good investment for Canadian taxpayers.”

WetJet is unique among Canadian airlines for turning down government funding during the pandemic, a decision that Mr. Hunter said made the Calgary-based airline a more attractive partner. WestJet and Sunwing declined comment on the value of the transaction.

Toronto-based Onex acquired WestJet in 2019 for $5-billion, including assumed debt. Onex’s financial results, released last Friday, show it funded the takeover with US$980-million of equity. Of that total, US$196-million came from Onex, with the remainder coming from its institutional investor clients.

Onex’s results show that, despite the pandemic, the company received US$3-million in cash distributions from WestJet over the past two years.

WestJet chief executive Alexis von Hoensbroech, who took the top job less than two weeks ago after serving as CEO at Austrian Airlines, said combining the two companies will be a win for consumers and will mean more jobs in Canada, “as you combine Sunwing, a large tour operator with a small airline, with WestJet, a large airline that’s a small tour operator.”

Once Sunwing joins the fold, WestJet plans to expand a tour business that was focused on Florida, the Caribbean and Mexico to destinations the Calgary-based airline already serves, such as Arizona, California, Hawaii and Europe. WestJet’s advisers on the transaction are investment bank Barclays and law firm Goodmans LLP.

The takeover requires regulatory approval – a process that helped scuttle Air Canada’s proposed acquisition of Transat AT Inc. last April – and is expected to close by the end of the year.

[Guest1]

I wonder if the Swoop brand will continue or will all their activity change to Sunwing?

[rudder]

14 minutes ago, Kargokings said:

I wonder if the Swoop brand will continue or will all their activity change to Sunwing?

According to the article, the WJ CEO is quoted as saying the acquisition is a large tour operator with a small operating fleet.

The Sunwing Vacations brand is far more recognizable than WJ Vacations. My guess is the Sunwing branding for the tour operator (including all subsidiary storefronts) will prevail but the SW AOC will be cancelled with most lift provided on the SWOOP AOC (including transferred SW aircraft) and some mainline seat capacity used on specific routes (North America).

If the article is credible, should know more later today.

[Guest1]

WestJet Airlines to buy Sunwing

• The Canadian Press
• Staff
• Contact

Published March 2, 2022 9:55 a.m. MST

Share

•  
•  
•  

WestJet Airlines Ltd. is acquiring Sunwing Airlines Inc., sources say, as competition in the Canadian travel market heats up.

Crystal Hill, vice-president of CUPE 4070, the union that represents WestJet flight attendants, says executives informed her that the purchase announcement would be going ahead today. The acquisition was confirmed by another source.

Terms of the acquisition remain unclear, with a virtual town hall between management and employees planned today in Calgary, where WestJet is based.

Both airlines are privately held. Toronto-based Sunwing is controlled by the Hunter family and WestJest was purchased by Onex Corp. in 2019.

 

The acquisition would increase WestJet's flight footprint to sun destinations and European cities after what has been a tough two years for the airline and travel industries.

The federal government last month lifted its advisory against international travel and several airlines are currently hiring.

This report by The Canadian Press was first published March 2, 2022.

[rudder]

https://westjet.mediaroom.com/2022-03-02-WESTJET-GROUP-TO-ACQUIRE-SUNWING-VACATIONS-AND-SUNWING-AIRLINES,-DELIVERING-GREATER-VALUE-AND-MORE-SUN-DESTINATIONS-FOR-CANADIANS
 

Combination strengthens both companies following impact of pandemic 

 Drives growth and job creation 

Unlocks exciting opportunities for WestJet and Sunwing employees as part of a vibrant national airline 

CALGARY, AB and TORONTO, ON, March 2, 2022 /CNW/ - WestJet and Sunwing announced today that they have reached a definitive agreement under which the WestJet Group of companies will acquire Sunwing Vacations and Sunwing Airlines. The transaction will bring together two distinctly Canadian travel and tourism success stories to deliver new travel options and greater value for travellers in the rapidly expanding leisure and work-from-anywhere travel markets. The combination will enable both companies to protect and create jobs and rebuild strength in the Canadian travel industry at a critical time.

Following the close of the transaction, a new tour operating business unit will be created under the WestJet Group, to include both Sunwing Vacations and WestJet Vacations Inc., and will be led by Sunwing CEO Stephen Hunter. Sunwing's current shareholders will become equity holders in the WestJet Group.

Canadian travellers will have access to more competitive airfares and affordable vacation packages through the combined strength of the companies. The tour operator business will be headquartered in Toronto, with a Quebec head office in Laval and the business will continue to market the Sunwing brand alongside WestJet Vacations. The WestJet Group will maintain its head office in Calgary.

The WestJet Group of companies will expand to include Sunwing Airlines. This will add increased capacity, dedicating otherwise seasonal aircraft to operate year-round in Canada, instead of Sunwing supplementing seasonal demand with imported aircraft, which translates into more jobs for Canadians. This acquisition will improve the WestJet Group's ability to offer more affordable fares by immediately expanding its low-cost footprint in Canada.

"This is an exciting moment for WestJet, Sunwing and Canada's travel industry," said Alexis von Hoensbroech, CEO of WestJet. "We are bringing together two highly complementary businesses with powerhouse brands to strengthen our successful leisure business and deliver greater value to our guests."

"This combination brings together Canada's two original low-cost carriers and positions us to accelerate growth in value-oriented travel, already the fastest growing segment of the airline market. It creates new opportunities for our people, our operational partners and supports the recovery from a global pandemic that has been particularly challenging for the Canadian travel and tourism industry including local airports and businesses we work closely with," added von Hoensbroech.

Stephen Hunter, CEO of Sunwing, said, "We have a very promising future as part of The WestJet Group, which is one of the only airlines in the world that has not issued debt or equity during the pandemic, or accepted sector-specific government aid. The combination of their strong balance sheet and growth trajectory with Sunwing's unparalleled expertise in creating differentiated vacation packages will ensure the success of the new vacation division. My team and I are excited for the future, and we look forward to offering even more vacation destinations to Canadians at affordable prices."

WestJet Group and Sunwing intend to build on their collective history of constructive labour relations and will respect all arrangements with union and employee associations, including those in place and those currently under negotiation.

As a result of the resiliency created by the transaction, Sunwing expects to no longer require the pandemic-related Large Employer Emergency Financing Facility (LEEFF) Sunwing obtained from the Canadian government in early 2021, which will be fully repaid upon closing of the transaction.

The combination, which remains subject to receipt of regulatory approvals, is anticipated to close late 2022.

 

[Guest1]

Unifor welcomes WestJet purchase of Sunwing Airlines and Vacations

---

NEWS PROVIDED BY

Unifor 

Mar 02, 2022, 13:29 ET

 

---

TORONTO, March 2, 2022 /CNW/ - Unifor welcomes today's WestJet announcement of its purchase of Sunwing and Sunwing Vacations.

"Congratulations to WestJet and Sunwing for reaching a deal," said Scott Doherty, the Executive Assistant to the Unifor's National President. "With the federal government lifting travel restrictions and more Canadians travelling more for business and pleasure, we look forward to fostering good relationships between WestJet and Sunwing in their new capacity."

 

The expansion, announced March 2, 2022, to include Sunwing Airlines means more jobs for Canadians, says Doherty.

WestJet will add increased capacity to destinations. Instead of Sunwing supplementing seasonal demand with imported aircraft, the company will dedicate their existing planes, otherwise used seasonally, to operate year-round in Canada. This translates to WestJet being able to offer more affordable fares by immediately expanding its low-cost footprint in Canada.

Unifor represents roughly 700 WestJet airport customer service and baggage agents in Calgary and Vancouver airports, as well as 452 Sunwing pilots.

"Unifying two leading airlines presents new possibilities and work for Unifor WestJet employees," said Jamie Mote and Karen Berry, of Unifor Local 531's bargaining committee, which represents WestJet workers. "It secures our future and ensures that unionized Unifor members have a strong voice as we move ahead in this new venture."

"We expect this deal will not impact our Sunwing members' jobs, who have been working tirelessly on the front line through the pandemic," said Barret Armann, President of Unifor Local 7378, which represents Sunwing pilots. "Our focus is the success and long-term careers of our pilots going forward as we build back better in the Canadian travel industry."

Unifor is Canada's largest union in the private sector, representing 315,000 workers in every major area of the economy. The union advocates for all working people and their rights, fights for equality and social justice in Canada and abroad, and strives to create progressive change for a better future.

[Moon The Loon]

Are Sunwing pilots unionized?

 

[Guest1]

6 minutes ago, Moon The Loon said:

Are Sunwing pilots unionized?

 

Unifor represents roughly 700 WestJet airport customer service and baggage agents in Calgary and Vancouver airports, as well as 452 Sunwing pilots.

Sunwing_Unifor_7378.pdf (hrreporter.com)

 Cabin Crew are members of CUPE as are those at WestJet

Sunwing_CUPE_4055.pdf (hrreporter.com)

[Super 80]

I'm surprised there wasn't another taker out there after Sunwing's AOC.

[J.O.]

Another taker would probably be a new entrant. New entrants aren't big fans of taking on a "mature" workforce in terms of pay scale. Any attempt to take the AOC without the people would land you in "common employer" trouble.

[Super 80]

I would imagine that Sunwing's seasonality would limit that.

[MD2]

Sunwing’s seasonality will cease as it will use Canadian registered aircraft in the winter and the summer EU flying will stop since it was based on reciprocity.

Considering Sunwing’s winter fleet is around 45, I will look for language in their next contract to expand Swoop well beyond 30, considering it will have 16 this summer. It won’t be surprising to see language for WD as well.

it is a smart move that they have included Sunwing’s loan will be paid in full upon completion, more incentive for cash strapped feds to expedite the process.

it seems a good match.

[moeman]

11 hours ago, rudder said:

Mr. Hunter’s family and Sunwing minority shareholder TUI Group, a German tour operator with a 49-per-cent stake, will take WestJet shares in exchange for their business.

WestJet shares?

[MD2]

Private shares. Which will be converted to common shares at the next IPO.

[J.O.]

Is ONEX planning to take it public again?

[MD2]

One would think, at some point. Why wouldn’t they, as a way of “unlocking” the value of their investment.

[Super 80]

On 3/2/2022 at 4:57 PM, MD2 said:

Sunwing’s seasonality will cease as it will use Canadian registered aircraft in the winter and the summer EU flying will stop since it was based on reciprocity.

I referred to seasonality in an employment context.

[J.O.]

7 hours ago, Super 80 said:

I referred to seasonality in an employment context.

That aspect has nothing to do with common employer. Their own flight crew compliment has essentially been a steady state, supplemented with foreign pilots for the winter peak.

[Guest1]

and the THICK PLOTTENS 

Russian oligarch could have indirect stake in WestJet through Sunwing deal

4 March 2022Canadian Aviation News

From The Globe and Mail link to source story

ERIC ATKINS, TRANSPORTATION REPORTER • March 4, 2022

 

A Russian oligarch on Europe’s blacklist could end up holding an indirect stake in Onex Corp.’s WestJet Group if the investment company’s takeover of Sunwing Airlines is approved by the Canadian government.

Alexei Mordashov, one of Russia’s wealthiest men, was sanctioned by the European Union on Monday over the country’s invasion of Ukraine. He owns 34 per cent of London-listed tourism giant TUI AG, which owns 49 per cent of Toronto’s Sunwing.

On Wednesday, WestJet announced a deal to buy Sunwing for an undisclosed amount. In the takeover, which requires regulatory approval, TUI and Sunwing owner Stephen Hunter would become minority shareholders of WestJet Group.

Mr. Mordashov, chairman of Russian steelmaker Severstal, is not on Canada’s list of 33 oligarchs who face sanctions that include asset freezes and a bar on entry to Canada. The Canadian sanctions also prohibit doing business with those on the list.

Mr. Mordashov resigned from TUI’s supervisory board on Wednesday. Vladimir Lukin, a Russian politician, resigned on Friday, TUI said.

“The aim of the EU sanctions is to prevent Mr. Mordashov from disposing of his shares in TUI AG,” TUI said in a statement on its website. “This is to prevent Mr. Mordashov from realizing any proceeds or profits from his investment in TUI. In this context, Mr. Mordashov is also resigning from TUI’s supervisory board with immediate effect. He formally declared the resignation of his mandate to the company today.”

Sunwing spokeswoman Melanie Anne Filipp said TUI is a minority shareholder in the leisure travel company and has no say in operations. “That will remain the case should this transaction be approved,” Ms. Filipp said. “Sunwing Travel Group strongly condemns the horrific attacks on the Ukrainian people. We fully support efforts by the Canadian government to hold Russia accountable.”

Morgan Bell, a WestJet spokeswoman, said the airline takes the issue very seriously, and is awaiting international protocols that will address such passive, minority interests before the takeover is expected to close at the end of 2022.

“This is a complex and rapidly evolving issue that businesses around the world are trying to understand and address,” Ms. Bell said in an e-mail. “It will take months for the international community to design protocols to disentangle Russian capital from investments.”

E-mails to Onex and Transport Minister Omar Alghabra were not returned on Friday afternoon.

Transport Canada spokesperson Sau Sau Liu said: “Should a formal submission be made by WestJet and Sunwing, the government will conduct the appropriate reviews in a rigorous fashion, adhering to required timelines.”

Jan Cimon, a business professor at Laval University, said the possibility of Mr. Mordashov owning an indirect stake in Canada’s second-largest airline at a time of sanctions and the war in Ukraine underlines the need to carefully examine the deal. “That is a great source of uncertainty,” Prof. Cimon said. “That’s why having such an investor, even if they are passive, is a potential liability.”

He said the presence of a Russian oligarch could also increase scrutiny on TUI. “Just the fact he’s there … that should warrant further examination and warrant an examination of what [TUI’s] role is going to be.”

“It certainly is a cause for caution to have a shareholder who may have issues, meaning that given all the sanctions and the business environment with Russia … it’s much harder from a transparency and governance point of view to have Russian stockholders,” Prof. Cimon said.

With a report from Nicolas Van Praet in Montreal

[Super 80]

5 hours ago, J.O. said:

That aspect has nothing to do with common employer. Their own flight crew compliment has essentially been a steady state, supplemented with foreign pilots for the winter peak.

I'm very sorry, I didn't think I was being unclear. I am not referring to common employer issues or suggesting an Independence Air type strategy where I believe five people kept their jobs when Compass was established.

The only thought I was trying to convey subsequently was that Sunwing's seasonality potentially limits the size and relative maturity of the workforce.

Edited March 5, 2022 by Super 80

[Guest1]

Russian oligarch’s ties to WestJet takeover of Sunwing seen as risk to deal

8 March 2022Canadian Aviation News

From The Globe and Mail link to source story

ERIC ATKINS, TRANSPORTATION REPORTER • March 8, 2022

Alexei Mordashov speaks during an interview with Reuters at the St. Petersburg International Economic Forum on May 25, 2018.SERGEI KARPUKHIN/REUTERS

Steel magnate Alexei Mordashov, known as Russia’s richest man, with a fortune worth US$29-billion, has been sanctioned in Europe for his ties to the Kremlin and businesses that support the war against Ukraine. He’s also in line to be an indirect shareholder in Onex Corp.’s WestJet Group, should the Toronto investment company’s proposed takeover of Sunwing Travel Group go ahead.

Mr. Mordashov owns one-third of German travel company TUI AG, which owns 49 per cent of Sunwing and will become a part owner of the Onex subsidiary, according to the takeover deal WestJet and Sunwing announced last week.

John Gradek, who teaches aviation leadership at McGill University, said Mr. Mordashov’s presence in the ownership could jeopardize the takeover when it comes before Transport Canada and the Transport Minister for approval. “I think the deal’s in trouble,” said Mr. Gradek, adding Mr. Mordashov’s stake has likely ended any hope of a speedy regulatory review. “It doesn’t look good,” Mr. Gradek said.

Mr. Mordashov is one of several oligarchs whose assets are frozen as Europe tries to punish and isolate Russians for the invasion of Ukraine. He is chairman of Severgroup, which has stakes in government-friendly TV stations, and Bank Russiya, known as the bank of Russian politicians. His companies, including the bank and a wind turbine producer, have done business in Russian-occupied Crimea and helped destabilize Ukraine, the European Union said.

“He is therefore responsible for supporting actions and policies which undermine the territorial integrity, sovereignty and independence of Ukraine,” the EU said in a statement announcing sanctions on Mr. Mordashov and others.

Canada has announced travel bans and asset freezes on several oligarchs, but not Mr. Mordashov.

The WestJet-Sunwing takeover deal must be approved by Canada’s Competition Commissioner, and Transport Canada, which will conduct a public interest assessment of the proposal before making a recommendation to the Transport Minister, Omar Alghabra.

Ambarish Chandra, a professor at the University of Toronto who studies airline mergers, said Mr. Mordashov’s stake would be a “weird” reason to delay the deal, and the Canadian regulator should focus on other aspects of the proposal.

“Either this is something that’s allowed or it’s not,” Prof. Chandra said from New York. “If he’s an investor in Sunwing, if that’s legal, then him being an investor in WestJet should be equally legal.”

Prof. Chandra said given the collective size of the fortunes of oligarchs, and the difficulty in tracing money, it is unreasonable for regulators to focus on Russian investments. “That doesn’t seem to be the best use of regulatory resources to be tracking down every last dollar that every Russian oligarch spends around the world,” Prof. Chandra said.

STORY CONTINUES BELOW ADVERTISEMENT

Frédérica Dupuis, a Transport Canada spokeswoman, said the Transport Minister will “consider all relevant factors in reviewing any proposed merger. However, to respect the integrity of the process, it would be inappropriate to provide details on specific cases,” Ms. Dupuis said.

On March 2, WestJet said it has an agreement to buy Sunwing for an undisclosed price, a deal that would see Sunwing owner Stephen Hunter and TUI become shareholders in the Onex subsidiary.

Earlier, on Feb. 28, the EU announced sanctions against Mr. Mordashov that prevent him from selling his TUI shares, worth €1.56-billion. On the same day, he transferred his shares to a company in the Virgin Islands, TUI said. The stock is still attributed to him.

WestJet has said it hopes to receive regulatory approval for the takeover by the end of 2022.

Onex and Sunwing did not respond to e-mailed questions.

“We take this very seriously and look forward to the international protocols that will be in place to resolve the question of passive, minority interests of this nature long before the close of this transaction,” Morgan Bell, a WestJet spokeswoman, said on Friday. The company said Monday it had no further comment.

Canadian law limits foreign ownership of airlines to 49 per cent, and does not discriminate by nationality. “But these are not normal times,” Mr. Gradek said.

TUI is one of the world’s biggest travel companies, with 1,600 travel agencies, five airlines, more than 400 hotels and 16 cruise liners. Mr. Mordashov, who has been a TUI investor for 15 years and bought a big stake in the London-listed company during the COVID-19 pandemic, resigned from TUI’s supervisory board on March 2.

Mr. Mordashov, 56, was worth about US$29-billion before Russia attacked Ukraine in February, according to Forbes. Now his riches are harder to estimate because the Russian ruble has plunged in value owing to economic sanctions applied by the EU and the United States. Italian police seized his 65-metre yacht, the Lady M, at a port on March 4.

[J.O.]

On 3/5/2022 at 2:39 AM, Super 80 said:

I'm very sorry, I didn't think I was being unclear. I am not referring to common employer issues or suggesting an Independence Air type strategy where I believe five people kept their jobs when Compass was established.

The only thought I was trying to convey subsequently was that Sunwing's seasonality potentially limits the size and relative maturity of the workforce.

Okay, now I see what you're getting at. I haven't seen a seniority list but there will be a fair number of Sunwing folks with more than 10 years seniority. I don't have a dog in the fight and I hope the integration isn't another bloodbath, but I'm probably going to be disappointed.