Canada’s Sunwing receives takeover offer, says CEO

The chief executive of Sunwing Travel Group, Stephen Hunter, has revealed that its low-cost subsidiary Sunwing Airlines (WG, Toronto Pearson) recently received a takeover offer, but the potential buyer’s name could not be disclosed. Hunter told The Globe and Mail newspaper that “we have been approached recently” but could not provide detailed information due to a confidentiality agreement signed by both parties. He also mentioned that the integrated and interdependent nature of Sunwing’s divisions may complicate any sale. Besides Sunwing Airlines, the company operates 45 resorts in the Caribbean and Mexico, a luxury charter jet service, and other vacation brands. Hunter’s family owns 51% of the group, which employs around 3,000 people in Canada, and TUI Group owns 49%. “The airline is a vehicle in order to get our package customer from point A to point B. So our airline really is a cost department within our tour operator. Therefore, one really can’t go without the other. And, of course, Sunwing Vacations provides about 30% of the customers to our own hotels.” Hunter said the group had received a similar takeover offer several years ago but declined to name that particular buyer. An unnamed airline executive told the newspaper that WestJet (WS, Calgary) and Sunwing had held talks in the past, but it was not clear whether the new bid emanated from there. It is in Sunwing’s interests to reveal that parties are interested in its airline, the source said, as this demonstrates the value of the company as a whole. Private equity funds have been showing interest in the aviation industry in expectation of a vaccination-driven travel rebound, according to the newspaper. A linkup between Sunwing and WestJet may present a further challenge to the Canadian government as it studies the ramifications of the planned Air Canada-Air Transat AT deal, which Canada’s Competition Bureau has warned could limit consumer choice and push up ticket prices. WestJet itself has called for the deal to be rejected or modified, but Hunter said he supported the takeover as a bigger Air Canada would be better positioned to repel foreign rivals. Sunwing Airlines and WestJet did not immediately respond to ch-aviation’s request for comment.