Wed, April 24, 2024 at 9:35 AM EDT
Business
Experts say the sun may set on Sunwing as the airline struggles to keep its operations afloat
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Lindsay May always wanted a destination wedding.
She and her fiancé originally had it planned for February 2022, but postponed to January of this year due to the pandemic.
“I got my pedicure and had my hair and dress ready to go, but four days before we were supposed to depart on Jan. 2 of 2023, I found out through social media that Sunwing cancelled absolutely everything from Regina,” she said.
“I went through the seven stages of grief in one day and had a couple of panic attacks, but we rebooked our flight for March 13.”
On Tuesday, the Regina couple learned Sunwing had once again canceled their flight out of Regina.
“Why did you even allow us to rebook and give us hope?” she asked.
Now, she and her guests are trying to rebook for a fourth time, this time through WestJet, as the $16,000 she paid for a wedding at a resort in Mexico is non-refundable.
“What I really want from Sunwing is for them to compensate for the time and effort of everyone having to go through this,” she said.
“Sunwing has completely lost my faith in them. I never had a problem with them before but I will never fly with them again. Certainly I don’t see anyone in Saskatchewan having faith and trust in them anymore.”
Regina’s Lindsay May had her destination wedding cancelled by Sunwing Travel and it turned into an emotional rollercoaster.
May was offered an alternative of flying out of Saskatoon when her March 13 flight was cancelled, but she opted against it. That was a wise decision, as on Wednesday Saskatoon’s airport confirmed that Sunwing would be cancelling half of its flights out of Saskatoon for the rest of the winter season.
Lisa Adams-Krahenbil was ready to go to Cuba with her kids after the pandemic delayed earlier plans, but a day before their departure the Sunwing flight out of Regina was cancelled.
“I don’t understand why they have to cancel now. Sunwing is the only flight [from Regina] that flies directly to Cuba,” she said, noting they are now flying out of Winnipeg.
“It was upsetting and frustrating. It’s unfair that Saskatchewan gets cancelled. It was supposed to be the first plane ride and hot weather vacation for our kids.”
The family had saved up for the trip, but now a lot of the money will go to travelling to Winnipeg and accommodations there before and after the trip, she said.
“I still have my doubts if I will reach Cuba on Jan. 27. I know travelling is not the best right now, but we have paid for our hot holiday and we will go.”
CBC reached out multiple times to Sunwing for an interview on Wednesday. It did not grant one, but confirmed the cancellations.
A recent survey from Angus Reid Institute found that almost as many Canadian respondents blamed the airlines and rail companies (68 per cent) for the holiday travel chaos as blamed the weather (70 per cent).
One-in-three also pointed the finger at the federal government.
The survey also found a strong desire from respondents for more government regulation to protect consumers from cancellations.
The poll surveyed 1,611 Canadians and had a margin of error of plus or minus 2.5 per cent, 19 times out of 20.
Travel agent Suzanne Pelzer says Regina travellers rescheduled to other cities will have to deal with another set of problems.
“Due to all the disruptions in six months, the U.S. is considering re-regulating the business, but I don’t hear similar noise coming from Canada,” said John Gradek, an aviation expert and a lecturer in the aviation management program at McGill University.
“It’s a failure on the part of Sunwing to understand that their schedule was a little too aggressive or optimistic.”
Gradek said the Canadian government is being silent.
In a written statement Wednesday, the Office of the Minister of Transport said airlines are private entities that decidetheir own flight frequency and destinations, and “not at the direction of the government.”
“Regarding WestJet’s proposed acquisition of Sunwing Vacations and Sunwing Airlines, the Minister determined that the transaction raised public interest considerations related to national transportation,” the statement read.
“The Minister takes this issue very seriously and is ensuring to consider and study all the public interest considerations that have been raised before providing a recommendation to the Governor in Council on the proposed purchase.”
Sunwing’s future uncertain: experts
Gradek said Sunwing is now “thinning out its schedule” and pulling out of Saskatchewan to have a “half-decent chance” at keep other destination flights running.
He said the airline assumed it would be able to bring in 64 foreign pilots like in previous years, but “the Canadian government did not allow those permits to be issued.”
“[Sunwing] promised a lot more than they could. It seems Saskatchewan wasn’t profitable for Sunwing,” he said.
The airline said a week ago that it got 7,000 complaints tied to the 2022 holiday travel season. Since then, talks of a class action lawsuit against the airline have been brewing. Gradek said Sunwing’s reputation has been tarnished and loyal customers are dwindling.
“Its overambitious holiday schedule creating a lot of animosity, and the loss of brand value in the Canadian marketplace due to its actions, will end up having them pay a price,” he said.
“There’s no way Sunwing can escape some loss of market share and value.”
Gradek said the airline has 15 more days to address compensation concerns from its passengers before they can proceed to the Canadian Transportation Agency (CTA).
“But then those passengers will join the other 33,000 Canadians who are already in front of the CTA with complaints of not being compensated by the industry. It’s a mess created by the industry.”
Sunwing official Andrew Dawson confirms the airline got 7,000 complaints tied to 2022 holiday travel season.
Calgary-based independent aviation industry analyst Rick Erickson said Sunwing’s decision-making has him at a loss for words.
“Sunwing has been profitable in the Saskatchewan market for a number of years and just to abruptly cancel services there out of the blue is out of rationale,” he said.
Unlike in the U.S. where airlines got $25 billion in “outright grants,” Erickson said “there were no grants” in Canada, but carriers like Sunwing and Air Canada took short term loans.
He said the future of Sunwing is “uncertain,” as WestJet wants to buy the airline — hoping to tap into that Eastern Canadian market and Sunwing’s owned resorts — but that decision may not be concrete until summer.
Erickson said other carriers like Flair Airlines are also looking to fill in the routes abandoned by Air Canada and Sunwing in Saskatchewan.
“Sunwing has a long uphill road to be the airline it was. It would be a shame to lose Sunwing,” Gradek said.
“Unless something happens dramatically changing Sunwing’s behaviour and its way of doing business, the sun may set on Sunwing.”
Blue Sky48:42The Future of Flight in Saskatchewan
Saskatchewan might be known as the land of the living skies but it’s also known as a fly over province by outsiders. Lately airlines are doing just that by cancelling flights to and from our province. Today on the show we talked about what affect this has on business and leisure here in the province. We heard from the Jason Aebig CEO of the Saskatoon Chamber of Commerce, Rick Erickson an airline analyst who is just as baffled as everyone else and Justin Reeves from the Regina Airport Authority. We also heard from listeners whose lives have been affected by these changes.
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Oil companies planning to ship crude on the expanded Trans Mountain pipeline in Canada are concerned that the project may not begin full service on May 1 but they would be nevertheless obligated to pay tolls from that date.
In a letter to the Canada Energy Regulator (CER), Suncor Energy and other shippers including BP and Marathon Petroleum have expressed doubts that Trans Mountain will start full service on May 1, as previously communicated, Reuters reports.
Trans Mountain Corporation, the government-owned entity that completed the pipeline construction, told Reuters in an email that line fill on the expanded pipeline would be completed in early May.
After a series of delays, cost overruns, and legal challenges, the expanded Trans Mountain oil pipeline will open for business on May 1, the company said early this month.
“The Commencement Date for commercial operation of the expanded system will be May 1, 2024. Trans Mountain anticipates providing service for all contracted volumes in the month of May,” Trans Mountain Corporation said in early April.
The expanded pipeline will triple the capacity of the original pipeline to 890,000 barrels per day (bpd) from 300,000 bpd to carry crude from Alberta’s oil sands to British Columbia on the Pacific Coast.
The Federal Government of Canada bought the Trans Mountain Pipeline Expansion (TMX) from Kinder Morgan back in 2018, together with related pipeline and terminal assets. That cost the federal government $3.3 billion (C$4.5 billion) at the time. Since then, the costs for the expansion of the pipeline have quadrupled to nearly $23 billion (C$30.9 billion).
The expansion project has faced continuous delays over the years. In one of the latest roadblocks in December, the Canadian regulator denied a variance request from the project developer to move a small section of the pipeline due to challenging drilling conditions.
The company asked the regulator to reconsider its decision, and received on January 12 a conditional approval, avoiding what could have been another two-year delay to start-up.
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Tesla profits slump by more than a half
Tesla has announced its profits fell sharply in the first three months of the year to $1.13bn (£910m), compared with $2.51bn in 2023.
It caps a difficult period for the electric vehicle (EV) maker, which – faced with falling sales – has announced thousands of job cuts.
Boss Elon Musk remains bullish about its prospects, telling investors the launch of new models would be brought forward.
Its share price has risen but analysts say it continues to face significant challenges, including from lower-cost rivals.
The company has suffered from falling demand and competition from cheaper Chinese imports which has led its stock price to collapse by 43% over 2024.
Figures for the first quarter of 2024 revealed revenues of $21.3bn, down on analysts’ predictions of just over $22bn.
But the decision by Tesla to bring forward the launch of new models from the second half of 2025 boosted its shares by nearly 12.5% in after-hours trading.
It did not reveal pricing details for the new vehicles.
However Mr Musk made clear he also grander ambitions, touting Tesla’s AI credentials and plans for self-driving vehicles – even going as far as to say considering it to be just a car company was the “wrong framework.”
“If somebody doesn’t believe Tesla is going to solve autonomy I think they should not be an investor,” he said.
Such sentiments have been questioned by analysts though, with Deutsche Bank saying driverless cars face “technological, regulatory and operational challenges.”
Some investors have called for the company to instead focus on releasing a lower price, mass-market EV.
However, Tesla has already been on a charm offensive, trying to win over new customers by dropping its prices in a series of markets in the face of falling sales.
It also said its situation was not unique.
“Global EV sales continue to be under pressure as many carmakers prioritize hybrids over EVs,” it said.
Despite plans to bring forward new models originally planned for next year the firm is cutting its workforce.
Tesla said it would lose 3,332 jobs in California and 2,688 positions in Texas, starting mid-June.
The cuts in Texas represent 12% of Tesla’s total workforce of almost 23,000 in the area where its gigafactory and headquarters are located.
However, Mr Musk sought to downplay the move.
“Tesla has now created over 30,000 manufacturing jobs in California!” he said in a post on his social media platform X, formerly Twitter, on Tuesday.
Another 285 jobs will be lost in New York.
Tesla’s total workforce stood at more than 140,000 late last year, up from around 100,000 at the end of 2021, according to the company’s filings with US regulators.
Musk’s salary
The car firm is also facing other issues, with a struggle over Mr Musk’s compensation still raging on.
On Wednesday, Tesla asked shareholders to vote for a proposal to accept Mr Musk’s compensation package – once valued at $56bn – which had been rejected by a Delaware judge.
The judge found Tesla’s directors had breached their fiduciary duty to the firm by awarding Mr Musk the pay-out.
Due to the fall in Tesla’s stock value, the compensation package is now estimated to be around $10bn less – but still greater than the GDP of many countries.
In addition, Tesla wants its shareholders to agree to the firm being moved from Delaware to Texas – which Mr Musk called for after the judge rejected his payday.
Business
Stock market today: Nasdaq futures pop, Tesla surges after earnings with more heavyweights on deck
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Tech stocks rose on Wednesday, outstripping the broader market as investors welcomed Tesla’s (TSLA) cheaper car pledge and waited for the next rush of corporate earnings.
The Nasdaq Composite (^IXIC) rose roughly 0.6%, coming off a sharp closing gain. The S&P 500 (^GSPC) was up 0.2%, continuing a rebound from its longest losing streak of 2024, while the Dow Jones Industrial Average (^DJI) fell 0.1%.
Tesla shares jumped nearly 12% after the EV maker’s vow to speed up the launch of more affordable models eclipsed its quarterly earnings and revenue miss. That cheered up investors worried about growth amid a strategy shift to robotaxis and the planned cancellation of a cheaper model.
The results from the first “Magnificent Seven” to report have intensified the already high hopes for Big Tech earnings, that the megacaps can revive the rally in stocks they powered. The spotlight is now on Meta’s (META) report due after the market close, as the Facebook owner’s shares rose after the Senate voted for a potential ban on rival TikTok. Microsoft (MSFT) and Alphabet (GOOG) next up on Thursday.
Meanwhile, Boeing (BA) reported better than expected first quarter results before the opening bell with a loss per share of $1.13, narrower than the $1.72 estimated by Wall Street. Shares rose about 2% in morning trade.
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