WestJet shuts down Swoop and Sunwing: What does this mean for consumer choice?

The cost of air travel in Canada has always been irksomely high, and experts are concerned that things are about to get much worse as two Canadian airlines are slated to be shut down.

WestJet to shut down to airlines

Canada’s second-largest airline, WestJet, has confirmed plans to shut down two of its subsidiaries and merge their operations under the WestJet banner.

Earlier this month, WestJet announced it will shut down its “ultra low-cost” brand, Swoop, with operations ending in October. The change is part of the airline’s new collective bargaining agreement with its pilots, and is ostensibly intended to assuage concerns over pay, hours and job security for those who had been working for the Swoop brand.

Days later, news leaked that WestJet would also shut down its recent acquisition, Sunwing Airlines. Sunwing’s planes will gradually change over to WestJet over a longer transition period which is expected to take a couple of years.

When all is said and done, 34 aircraft will be repainted with the WestJet livery, 34 domestic routes will be integrated with WestJet’s schedule, and service to 26 international destinations will be affected.

How does this impact travel costs for consumers?

With less competition in the market, there is a likelihood that flight prices will increase – although perhaps not as much as they would have if WestJet had continued to operate Swoop and Sunwing as separate airlines.

Ordinarily, less competition means higher prices and worse service. But WestJet already owned both Swoop and Sunwing and was in full control of their schedules and service. Shutting down the Swoop and Sunwing brands is unlikely to push prices higher than they were already going to go, and the cost savings for WestJet might even put it in a better position to compete with other major carriers.

WestJet’s CEO has said that the mergers will also lead to a better experience for travellers. Whereas Swoop and Sunwing have relatively few planes, WestJet can draw on its larger fleet to alleviate delays and prevent cancellations, a problem for which Swoop is particularly notorious.

The benefit of Swoop, in particular, is that its business model involved ultra-low base fares paired with fees for things like carry-on baggage. Without the option of trading comfort and reliability for lower prices, the most budget-conscious travellers will find themselves paying more for flights.

Airline taxes and fees are on the rise

Another issue standing in the way of more affordable travel is the federal government’s plan to increase one of its flight taxes by 33%.

The Air Travellers Security Charge, or ATSC, is set to rise by 33% in May 2024. The increase will amount to $2.46 per flight within Canada, $4.18 per flight to and from the United States, and $8.51 per flight to and from international destinations. A family of four travelling internationally will pay an additional $34.04 for airfare when the increase takes effect. 

Airport fees are also going up across the country. Passengers departing from Toronto Pearson Airport started paying $5 more per flight on January 1st, and travellers leaving Regina will see an extra $10 added to their ticket. As airports continue to struggle with post-pandemic debt and rising costs, look for even more increases to come.

How can consumers make travel more affordable?

While the price of travel is unlikely to come down anytime soon, you can save money on your next trip by taking advantage of one of the many travel loyalty and rewards programs available to Canadians.

Use a travel credit card with perks to save on flights, hotels, checked baggage and insurance

Choosing a travel credit card with significant perks can greatly enhance your travel experience while making it more affordable. These cards offer a wide range of advantages that make them an ideal travel companion. 

For instance, certain cards, like the Marriott Bonvoy by American Express, provide free nights at hotels, allowing you to enjoy luxurious accommodations without the hefty price tag. Lounge access is another valuable perk, offering a peaceful oasis amidst the chaos of travel. Additionally, some credit cards offer companion passes or buddy passes, allowing you to bring a second passenger at a cost typically ranging from $0 and $99. However, it's important to note that these often come with high spending requirements from the previous year. 

In addition, travel credit cards can save you money on flights, checked baggage, and insurance. Take, for example, the National Bank World Elite Mastercard. This card can help you save big on travel with its generous rewards program that pays up to 5 points per dollar spent and includes up to $800 in welcome and anniversary bonuses. It includes great travel insurance coverage like emergency medical and trip interruption coverage. And to sweeten the deal just a little bit more, it also comes with unlimited access to the National Bank Lounge at Montréal-Trudeau Airport and a $150 annual stipend for travel expenses like checked bags and airport parking. 

Consider using alternative budget airlines

Swoop may be winding down, but a few other discount airlines remain in Canadian skies. Flair and Lynx are two such “ultra low-cost carriers” that sell cheap airfare but charge fees for optional privileges like carry-on baggage and seat selection.

The bottom line

The cost of travel is going up in Canada, and the merger of Swoop and Sunwing with WestJet are unlikely to help the situation. To get the best deals on travel, take advantage of loyalty and rewards programs that can save you money and make your next trip more comfortable.

Also read:

• The best travel credit cards in Canada for 2023
• BMO purchases Air Miles rewards program
• How to insure your summer fun
• The best Aeroplan credit cards