Stephen Hunter was brutally honest when we caught up with him last week. Asked how things were at Sunwing, he said, “We’re essentially in hibernation.” However, there is a positive side — what this situation has done, said Hunter, is allowed the company to retool certain aspects of the business far more quickly that it would have been able to under normal conditions, particularly in the area of technology as it relates to the customer journey with Sunwing.

These are aspects, he said, that, “really make a difference” to the customer and the pandemic has allowed Sunwing to upgrade and improve much more quickly than it might have done under normal conditions, “it would’ve taken five years to get to where we will now be by July.”

Still the lack of flying is obviously frustrating. “We were all hoping we could continue with a couple of flights here and there. We had eight flying at Christmas, we now have three flying and I think that’s going to dwindle. So, we’ve essentially gone back into hibernation.”

With the government standing by a “September-ish” date for all Canadians to be vaccinated, there is no great rush by the public for holiday travel. Some bookings are coming in for November onwards says Hunter, but most of those are re-bookers – people who have had earlier flights cancelled.

“I think by January of next year, we’ll be back, but to what extent, I’m not sure,” mused the Sunwing CEO. “Is it going to be half the amount of people? Is the pent-up demand so much that it will be double the amount of people? You just don’t know. So, I have to plan for next winter. Do I bring in aircraft from Europe. And do I bring in 30? Do I bring in 40? Do I bring in 20? Do I bring in none? I don’t know. Those are things that nobody can answer, so there’s no point in worrying about them.

“When we get to the point, we’re going to take our best guess with what can sell and move on. However, our plan now is to fly our full program but demand will determine in the end.”

Like other carriers Sunwing is working with the government in the hope of finding some relief. In the US, the UK, Holland, Germany and Belgium, airlines are receiving not just low interest loans but government grants. So far in Canada there is no sign of that but he believes it will come.

Meanwhile in this year of hibernation, Sunwing will have flights out the major gateways, to the extent that they’re selling. But if they’re not selling, they will call other Canadian carriers – Air Canada, Transat and WestJet and buy the required number of seats from them – and those carriers will do the same in similar circumstances.

“We’ve all been doing that for the last, almost year.” Said Hunter, and I am reminded that this practice harks back to decades ago when airlines and tour operators buying seats off each other was standard business procedure.

Unlike WestJet who wants government regulators to reject the deal, Sunwing has come out in support of Air Canada’s purchase of Transat.

“People don’t understand what is going on in our industry. It’s one thing, pre-Covid to have an argument against a consolidation in the industry. Now that nobody essentially has been flying, we’re going to be coming up in a month and a half on a whole year of 90 percent reduction in revenue. It’s not like the government came out and gave us all money,” said Hunter.

“I don’t care what industry it is, there must be consolidation.”

He looks to Europe as an example.

“Do you think there’s not going to be more consolidation in Europe? I mean, you saw Air Europa and British Airways. British Airways is completing their purchase of Air Europa, albeit half the price. But they know there needs to be consolidation.

“All of those big European airlines are going to be targeting places like Canada, in order to fly their planes after next summer and for years to come. And when you’re talking about international travel, yeah there were only two real big players. Transat and Air Canada. But the big difference between the two is that Air Transat operated to a lot of places that Air Canada didn’t.

“Look at the UK as an example? Manchester, Bristol, Cardiff, Glasgow, all of those places Canadians couldn’t get to with Air Canada without a stop by Heathrow.

“Barcelona, Portugal, the old Alba (Italy) program. Air Transat that was the only one operating to all of those places. Now it’s Air Transat/ Air Canada. So what? There’s still only one person operating. But what that does is, is it keeps those European guys out of the market and protects Canadian jobs and the Canadian airline industry in total.”

There are times when everyone gets to take their spot and aim at each other and there are other times where you have to stick together and aim at everybody else, says Hunter.

Wouldn’t that be strengthening a rival or even rivals we asked.

“Yeah. So what?” says Hunter.

“Will it make Air Canada Vacations stronger? Air Canada Vacations will be stronger if they have the right recipe anyway.

“We got to 40 percent of the market share because we had the right recipe. We still have the right recipe. So, together they’ll be a little bit bigger than me. I look at that as a challenge and say, ‘Now I’ve got to go chip away at it. I’m going to get back to the number one.’

“And everybody knows, I don’t care what company it is and what industry you go to, one plus one never equals two. So, if Air Canada was operating a 767 Montreal Cancun on a Saturday and Transat was operating a 330 on the same day, on the same route, do you think both of those two planes are going to fly going forward? No.”

“I mean, forget about Covid. Pretend Covid never happened. Just in normal times. They’re not going to do that. Air Canada is going to say, ‘Okay, you know what, we’ll take the 767 off, we’ll put a Dreamliner on.’ And they’ll put a hundred more seats and that’s it. And that leaves room for WestJet, Sunwing and anybody else that wants to come in.

Regardless, says Hunter, Sunwing is very different from all three of the others. “Over 90 percent of the people on Sunwing planes are buying the package. Even Transat’s only 65%, 70% packages. And Air Canada and WestJet are a lot less than that, obviously.”

Everything is based on demand, says Hunter.

“We know there’s over-supply everywhere. So, in the end that will actually work out well. Not for us — it will work out well for customers, because there will be more supply than there is demand. Which of course will translate into lower prices for the customer.”

He does not agree with the Competition Bureau and Transport Canada “and all the rest of them” that are concerned about the consolidation because it could control the market and raise prices.

“Well, does anybody with half a brain think that any airline is going to be raising the price anywhere? No. You’re going to see the best prices anywhere you want to go for years to come.”

Pivoting to Sunwing’s hotel brands, Hunter says they actually “made money in all the hotels in December, but that was mainly because of the US market and a little bit from the UK. Now the US market is tightening up, because now that they need antigen testing to come in.

“Now in Jan, it’s a two- to 14-day quarantine, which was already in place in some States. It’s going to dry up for a bit, but we’re getting ready for that. All of our hotels are still open.

“If a hotel’s not open, people won’t have confidence to book it. We’re going to have to ride it through. Our best-case scenario is that we have a not bad summer.”

However, he notes, that is a hundred percent dependent on each government vaccinating their people properly. Currently the U.K. is vaccinating 250,000 people a day. By next week, they will be up to 500,000 vaccinations a day. Somebody has things under control over there.

Over here, we’re a mess, he says, but then more optimistically, “We will catch up.”

Meanwhile, says Hunter, stay tuned. Sunwing expects to have good news coming down the pipeline in the next week or two.