Question Period Note: Westjet potential acquisition of Sunwing

Westjet announced its intention to acquire Sunwing Travel Group, including Sunwing Airlines

• On April 8, 2022, Transport Canada was formally notified of the proposed acquisition by WestJet of the Sunwing Travel Group.
• The Canada Transportation Act provides a clear process for the review of mergers and acquisitions including clear timelines.
• Transport Canada will be following this process and have no further comments at this time.

The Minister of Transport’s role in air carrier mergers and acquisitions

• On March 2, 2022, Canada’s second largest air carrier, WestJet, announced its intention to acquire the Sunwing Travel Group, including Sunwing Airlines. Transport Canada was officially notified April 8, 2022, triggering the review process.
• The Canada Transportation Act outlines a specific process for the assessment of mergers and acquisitions involving transportation undertakings, which allows for the consideration of the public interest, as well as competition.
• Parties to proposed mergers of transportation undertakings that are notifiable under the Competition Act must notify both the Commissioner of Competition (the Commissioner) and the Minister of Transport.

Process

• Upon receipt of the notification, the Minister has 42 days (May 20, 2022) to determine whether the proposed merger raises public interest considerations.
• If the Minister deems that the proposed arrangement raises public interest considerations, approval of the transaction must be provided by the Governor in Council (GiC) based on a recommendation from the Minister of Transport, with input from the Commissioner. If it is determines that it does not, then neither the GiC nor the Minister have any further role in the matter.
• Once the decision is taken that the proposed transaction raises public interest concerns, an assessment of the public interest must be provided to the Minister within 150 days (approximately October 17, 2022).
• The public interest assessment entails consultations with implicated parties, including the provinces and territories, other air carriers, airports, airline associations, consumer advocacy groups and the general public. It can also involve extensive economic and final analysis.
• The Commissioner must provide an assessment of the proposed transaction from a competition perspective, within 150 days of the initial notification (September 5, 2022).
• The Minister of Transport would then be required to make a final recommendation to the GiC, based on the input from the Commissioner and the findings of the public interest assessment.
• Finally, depending on what markets the merged entity plans to serve, it may also require regulatory approval from other jurisdictions based on their laws and requirements.
   

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