Will Flair/Sunwing survive

[3down&loct]

The Covid has hit AC and WJ hard, however there seems to be little discussion about Sunwing and Flair.
How much longer can they continue without income? What is in store when things pick up? Merger?

[FL-280]

I dont see a merger between flair and sunwing. I dont see Sunwing going under
Flair on the other hand wont make it through the year IMO

[tbaylx]

Not sure where you got the impression that Flair has no income.

Load factors back up over 50% on the operating routes and a new cargo program in place have kept the lights on and as far as I know Flair has been the only airline to keep all employees on full pay up until this point.

Your guess is as good as mine on how long this downturn will last but I wouldn't be betting against Flair.

[3down&loct]

Well that is good news. I was not aware that Flair was operating. Good to know. I am trying to stay optimistic that things will return faster then the general airline executive sentiment.

[flying4dollars]

I dont see a merger between flair and sunwing. I dont see Sunwing going under
Flair on the other hand wont make it through the year IMO

What did you base your opinion on, out of curiosity?

[flying4dollars]

Well that is good news. I was not aware that Flair was operating. Good to know. I am trying to stay optimistic that things will return faster then the general airline executive sentiment.

I hope so! But better to prepare for the worst, and hope for the best, which is what Flair and I'm sure every airline is doing. Cliche but very fitting.

[ant_321]

I would bet a lot of money there won’t be a merger. Sunwing airlines is simply a shuttle bus to service their hotels. I don’t see a scenario in a downturn where a merger does anything to help the hunters.

I’m still reasonably confident Swg will survive as long as the borders open up this winter, but probably will be significantly smaller. If not someone will be getting a real good deal on my house. I have no idea of flair’s situation.

[thenoflyzone]

Flair has been running a decent amount of charters from YUL to MEX and GUA in order to pick up foreign workers. They had 2 B738s based at YUL pretty consistently in May.

That kind of stuff should definitely help their bottom line.

[boeingboy]

Sunwing is currently flying 4 airplanes. Mostly for the temporary foreign workers. They are making plans to go south end of the month - but I bet it depends on how many seats they can sell. As long as this 14 day quarantine is in effect - I don't think anyone will have any luck. I've heard they may also have a few other pokers in the fire, we will see what comes of those. Don't forget - they cut everything down to basic life support very early, and have negotiated many deals to save (and make) some money.

Sunwing is going nowhere - the Sunwing group is very large and the airline is only a small part of it.

[Loon-A-Tic]

I'm guessing any flight(s) conducted for the purpose of bring TFW's to Canada or at least Ontario are about to end.

https://www.ctvnews.ca/health/coronavir ... -1.4964690

[Yycjetdriver]

Sunwing is going nowhere - the Sunwing group is very large and the airline is only a small part of it.

Yes it’s true the airline is only a fraction of Sunwing’s business, however every other “business” they have has likely been severely affected. Their size could be a negative in this situation not a positive like you alluded to. It would be safe to assume most of their resorts are sitting nearly empty.

[Gilles Hudicourt]

This is valid for every airline in Canada. None, and I mean none, is guaranteed to survive the crisis.

[boeingboy]

Yes it’s true the airline is only a fraction of Sunwing’s business, however every other “business” they have has likely been severely affected. Their size could be a negative in this situation not a positive like you alluded to. It would be safe to assume most of their resorts are sitting nearly empty.

This is valid for every airline in Canada. None, and I mean none, is guaranteed to survive the crisis.

Absolutely - I agree with you both. It's definitely a dark time for everyone. I didn't mean to imply they are not affected. I read too much into the question in that a lot of people believe that Sunwing, Flair or the smaller companies are doomed to fail. Sunwing is in a unique position and I believe they have a better chance to come out the other end than some or most others.

[daedalusx]

Well on the upside, the protests/riots/race war over the last week apparently have shown that CV19 is cured and/or irrelevant. If no-one is going to abide by social distancing rules anyways then might as well open up those resorts and kill the 14 days quarantine rule.

[speedah]

I dont see a merger between flair and sunwing. I dont see Sunwing going under
Flair on the other hand wont make it through the year IMO

What did you base your opinion on, out of curiosity?

Out of thin air clearly since he didn’t even know they were operating...

[co-joe]

It's a weird question OP. He probably knew Sunwing signed a deal with a ULCC and assumed it was Flair when in fact it was Swoop that they partnered with. Sunwing is owned by the largest travel and tourism company in the world. I think they own 8 or 9 other airlines, mostly in Europe. As soon as the cruise ships, and hotels they own start being allowed to accept international travellers, Sunwing will have work.

[Zaibatsu]

I’d be more worried about Sunwing than Flair.

Yes, Sunwing is a small part of a larger business, but that business is all based on leisure travel. The thing hit hardest by COVID and the last thing people will spend money on as they stare down debt or wiped out savings. Staycations will be the word this summer, going to the rockeys instead of the alps. Houseboating in BC instead of cruising the Med. The biggest target on the chopping block would be an expensive airline in a market that now has too much capacity. Where you could likely get a better deal buying from WJ or AC for package deals than you can from your own airline.

Flair started as a charter airline and charters have skyrocketed since COVID hit. No airlines for FIFO workers so charters have picked it up. Lean operation that’s far more adaptable. How that will be for pilots in the long term, I don’t know. But the airline will survive.

Look at how many tour airlines have come and gone. Sunwing itself is only 15 years old. Only Air Transat has been around a long time and it was about to get absorbed into Air Canada.

[boeingboy]

While you make a good point or two.....you clearly have no idea about Sunwing.

[rudder]

The fate of SWG (and TRZ) will depend almost entirely on the travel demand AND yield for the upcoming winter packaged vacation season.

Not unlike a restaurant, vertically integrated tour companies cannot wait indefinitely to return to business, and to do so at a volume of customers that covers costs.

Best case they both come back but with reduced capacity. Worst case is a trip through CCAA and hopefully restructuring as smaller companies with less debt.

[flying4dollars]

While you make a good point or two.....you clearly have no idea about Sunwing.

I didn't think he was wrong, but if you're going to say he has no idea, then maybe explain?

Otherwise we can all sit here and just say "nah, you're wrong" without any merit in the statement.

[co-joe]

TUI's whole business model (WRT airlines) hinges on being able to move capacity back and forth between Canada and the EU. Sunwing is what allows them to do that. If TUI doesn't make it through the wuhan depression, then neither will any of their companies, but if anything they have a better position to move forward with than anyone due to being less expensive than AC or WS vacations, and now that TS and Swoosh for that matter won't be competing they may even come out of this on a better footing than they went in.

[boeingboy]

While you make a good point or two.....you clearly have no idea about Sunwing.

I didn't think he was wrong, but if you're going to say he has no idea, then maybe explain?

Otherwise we can all sit here and just say "nah, you're wrong" without any merit in the statement.

Sunwing only owns 14 aircraft themselves. They operate something like 45 aircraft in the winter to less then 10 in the summer. When travel does come back, there is no denying that all sectors are going to be a lot smaller than they are (were). The numbers vary greatly from day to day but for simplicity...Air Canada and WestJet are (or have been) talking about parking 50% of the fleet for a year or two. That's a massive financial hit for anyone. If Sunwing has to do the same - all of there owned aircraft would be flying. That gives them huge flexibility and their financial hit will be a whole lot smaller then the big 2. Sunwing finished their high season just as all this hit - so their balance sheet should be fairly good - much better than if this all came about in the fall.

While the Sunwing group is all leisure - some of the groups companies have vary low operating costs compared to the airline or the hotels. Take the travel agencies - very low overhead comparatively. Travel express is a US based company and serves the American traveler with all major US airlines and some Mexican and South American ones. We can already see the US has no interest in shutting down and some parts of Mexico are already opening up. One can assume that business will see good yields within a short period of time. When you buy a vacation form AC or WJ vacations - where do you think their vacation packages come from? A large part of those are actually bought from Selloff vacations - of course owned by Sunwing. The hotel rooms are also offered to and bought by other US and European operators.

Is Sunwing a leisure travel company - Yes, but they are not dependent on strictly Canadian travelers either. Parts of their operations have an international component to them - which makes them somewhat more diversified as different areas will experience different reopenings. Having a relatively small fleet will make groundings and reopening's a lot easier for them to adjust to. Their other operations are more diversified...one can go to Selloff vacations right now and buy a ticket from YYZ to YVR on AC or WestJet, or YYZ to MIA on Delta or AA... it all makes money for the group.

Nothing is guaranteed in these uncertain times. It's true that a number of the groups companies could go under - but the odds are the group itself will survive, and if the group survives - the airline will be around in one form or another. I think Sunwing is positioned well and has a better chance than a lot of others to come out the other side.

[boeingboy]

TUI's whole business model (WRT airlines) hinges on being able to move capacity back and forth between Canada and the EU. Sunwing is what allows them to do that. If TUI doesn't make it through the wuhan depression, then neither will any of their companies, but if anything they have a better position to move forward with than anyone due to being less expensive than AC or WS vacations, and now that TS and Swoosh for that matter won't be competing they may even come out of this on a better footing than they went in.

Sunwing is 49% owned by TUI - not completely, and they don't fly passengers between Europe and Canada. There are obviously both pitfalls and rewards in this arrangement.

[Gilles Hudicourt]

TUI's whole business model (WRT airlines) hinges on being able to move capacity back and forth between Canada and the EU. Sunwing is what allows them to do that. If TUI doesn't make it through the wuhan depression, then neither will any of their companies, but if anything they have a better position to move forward with than anyone due to being less expensive than AC or WS vacations, and now that TS and Swoosh for that matter won't be competing they may even come out of this on a better footing than they went in.

Last I checked, TUI operated about 150 aircraft in Europe through wholly owned companies. They also owned 19% of Air Berlin, Germany's second largest airline at the time.
TUI owned airlines never sent more than 20 to 25 aircraft to Sunwing in the winter. Sunwing brings perhaps a little over 30 aircraft from Europe, but some come from Czech TravelService, which has nothing to do with TUI.

So its a little exaggerated to claim that their "whole business model" was based on swapping aircraft (and pilots) with Sunwing. It certainly helped though. The greatest financial advantage Sunwing gained from the TUI partnership is access to TUI's purchasing and negotiating power with hotels down south

[whipline]

Gilles and Boeing are correct. Add to that aircraft purchasing/leases, fuel, insurance even down to the price of ACARS. Joint ventures into hotels which in turn led Sunwing to starting their own hotel chain in 2011.

https://www.bluediamondresorts.com/about-us/about-us

Oh and don’t forget about Sunwing’s USA company

https://www.vacationexpress.com/