The Canadian government has approved the takeover of Sunwing Airlines by WestJet, the nation’s second-largest carrier, mandating conditions aimed at ensuring the pending merger would not damage airline competition, connectivity, or customer service.

The combination would create a leisure travel powerhouse, as Sunwing customers seeking vacations in sun destinations can book package deals for flights, ground travel, tours and lodging through the company, which owns resorts in Mexico and the Caribbean. Toronto-based Sunwing brands itself as “the largest integrated travel company in North America”.


Financial terms of the deal have not been disclosed, as both companies are privately-owned.

The deal, proposed in March 2022, faced regulatory scrutiny in October from Canada’s federal Competition Bureau, which warned the deal “would likely result in increased prices, less choice and decreases in service for Canadians”.

With that in mind, Transport Canada’s decision to approve the deal was “not taken lightly”, Canada’s transport minister Omar Alghabra states. Flight delays and cancellations on Sunwing’s network during December, Alghabra says, also made the government sceptical of whether the merger would improve customer service.

“After considering the pros and cons, we have made the decision that will allow Sunwing to continue to provide affordable vacation packages to Canadians, create more good jobs, and protect current jobs as well as Canadians who have already purchased tickets,” he says.


The broader economy also informed the regulatory decision. In the absence of this acquisition, Transport Canada states, “the nation’s air transport sector could have faced greater instability, including job losses, a significant reduction of affordable vacation offerings, negative impacts on passengers, and the government not being repaid sizable loans”.

Conditions set by regulators require Sunwing to expand vacation package offerings to five new Canadian cities, and to maintain a vacations business head office in the Toronto area and a regional office in the Montreal area for a minimum of five years. The merger had originally proposed a new business unit to be led by Sunwing chief executive Stephen Hunter with a Toronto headquarters supplemented by a Quebec office in Laval. The combined airline and vacations provider, Transport Canada states, must also maintain capacity “on routes most affected by the merger”, while also improving both regional connectivity and baggage handling for better passenger experience. Conditions aimed at protecting customer rights also include “investing in IT technology solutions to improve Sunwing’s communications” and “supplying airfare data on vacation packages for monitoring of post-acquisition price trends”. To address the concerns of labour unions including Unifor, the government requires the combined company must increase net employment at its Toronto office by 20% over three years and “gradually” end Sunwing’s annual practice of seasonal aircraft leasing to Germany-based TUI Group. WestJet employs around 8,500 workers while Sunwing employs around 2,200. “We’ve seen what happens when there’s no long-term plan to attract and retain workers in the industry,” Leslie Dias, Unifor’s director of airlines, states. “We need the government to leverage the power it has, including through these conditions, to increase job quality and set the industry on a more resilient and sustainable course.” Calgary-based WestJet calls the government approval “an important milestone in the process toward closing the transaction”. Sunwing states: “We look forward to closing the transaction in the weeks ahead and officially joining the WestJet Group”.

Boeing is preparing to resume 787 deliveries following a pause in February over an analysis issue connected to the aircraft’s forward pressure bulkhead. “We have completed the necessary analysis that confirms the airplane continues to meet all relevant requirements and does not require production or fleet action,” the US airframer said. “The FAA [US Federal Aviation Administration] will determine when 787 ticketing and deliveries resume, and we are working with our customers on delivery timing.” The US regulator, for its part, says: “Boeing addressed the FAA’s concerns. The FAA may resume issuing airworthiness certificates this week.” It notes, however, that the FAA “must still sign off on every plane before Boeing can deliver it”. The FAA has been certificating individual aircraft since Boeing resumed 787 deliveries in 2022 after a 10-month hiatus over production issues. Prior to that, Boeing had been approved by the FAA to certificate production 787s on its behalf. In February, the US airframer linked the analysis issue to the pressure bulkhead’s supplier Spirit AeroSystems. Spirit said at the time it was too early to assert that there had been an analysis error on its part. The US aerostructures supplier said: “We have no further comment.”

Embraer during 2023 expects to improve its output by shipping 65-70 commercial aircraft to customers, along with 120-130 executive aircraft shipments despite ongoing supply-chain hurdles that limit its available pool of engines for jet production. The Brazilian manufacturer forecasts progress compared with its delivery rate during 2022, when it shipped 57 commercial E-Jets and 102 executive jets. Embraer generated $2 billion during the fourth quarter, rising by 53% year on year from $1.3 billion. Full year 2022 revenue was $4.5 billion, rising by 7% from 2021. Fourth-quarter net profit stood at $23 million, improving dramatically from $3 million during that period in 2021. The parent company during full year 2022, however, made a net loss of $185 million, versus a $45 million loss in 2021. Embraer during 2022 derived 34% of its total revenue from the commercial aircraft segment, which generated $1.5 billion during the full year. The commercial segment generated $821 million during the fourth quarter, which was 41% of the parent company’s quarterly revenue and signalled a recovery in regional jet demand by nearly doubling year on year from $414 million. The airframer predicts that its full year 2023 revenue could be $5.2-5.7 billion, Embraer president and chief executive Francisco Gomez Neto said on 10 March during a call with reporters. While supply-chain challenges are expected to begin improvement by the second half of 2023, Neto says, “our aircraft production is limited because of the number of engines we are receiving”. In addition to delayed engine shipments there are shortages and delayed shipments of “hydraulic systems and other pieces of equipment”, Neto says, adding that a shortage of pilots at airlines also hinders demand for new E-Jet orders. Embraer’s new E195-E2 aircraft are powered by Pratt & Whitney’s PW1900G geared turbofan engines. “This year will have some challenges on the supply chain and we hope things will go back to normal in 2024,” he says. The airframer has temporarily paused its plans to produce a new regional turboprop aircraft but Neto says “we have several engineers still working on it”. “We are still working on deciding what the best engine for that aircraft would be,” he says. Signs of economic downturn contributed to the postponement of the turboprop programme, Embraer commercial unit vice-president of marketing and strategy Rodrigo Silva e Souza said on 17 January during the Airline Economics Growth Frontiers conference in Dublin. While Neto says production of a turboprop is unlikely “on a short-term basis”, he adds “we still believe it is a good product and there is a market for it”. Demand for a new aircraft, Embraer said in October, stems in part from ATR having a “de facto monopoly” in regional turboprop manufacturing following the sale by Bombardier to De Havilland Canada of its Dash 8-400 programme and the subsequent halt in production.