Proactive Investors - WestJet Airlines will shut down operations at its Sunwing Airlines subsidiary and merge the low-cost carrier into its mainline business within two years as part of a strategy to streamline operations, the company announced in an internal memo obtained by The Canadian Press.
The move comes a week after the company decided to consolidate its budget Swoop subsidiary’s operations under the WestJet banner.
WestJet acquired Sunwing’s main airline and vacation divisions just last month.
At least one academic believes WestJet’s actions could lead the airline to reduce its costs and increase its prices.
“There is going to be consolidation. Consumers will have less choice, and consumers will pay more,” John Gradek, a professor with McGill University's aviation management program, told CBC News.
That said, a larger fleet and more pilots could benefit travelers in certain situations, such as when hundreds of Canadians were stranded in Mexico for days last winter as Sunwing struggled to bring in enough planes to pick up passengers.
In May, WestJet pilots reached a new agreement with the airline that will see their pay rise 24% over the next four years, which could have contributed to the company making the cost-cutting moves.
WestJet is owned by investment manager Onex Corp (TSX:ONEX), which acquired the company for $5 billion in 2019.