WestJet, Delta taking off together with new transborder joint venture

WestJet, Delta taking off together with new transborder joint venture

ATLANTA — After months of negotiations WestJet and Delta Air Lines say they’re moving ahead with their plans for a joint venture, signing a definitive agreement to create a comprehensive transborder JV arrangement that will offer customers an extensive route network within the U.S. and Canada.

“WestJet continues its drive toward becoming a global airline, and the signing of this agreement marks a major milestone in that journey,” said Ed Sims, WestJet President and CEO.

“Working together with Delta, the premier U.S. carrier, we are looking forward to providing enhanced offerings and more choice for guests. The joint venture will allow us to maximize our existing partnership with Delta to benefit customers by bringing greater competition to the trans-border market.”

Added Ed Bastian, Delta’s CEO: “Delta’s future is global and together with WestJet, we can augment the two airlines’ capabilities and bring together our strengths in this important trans-border market. Combined, we will be able to offer more destinations to customers with an integrated network, superior airline products, improved airport connections and significantly enhanced frequent flyer benefits. The JV will provide an unmatched passenger experience for customers travelling between the U.S. and Canada.”

The agreement deepens the existing codeshare partnership between the carriers and follows the signing of a memorandum of understanding in December 2017 announcing the intention to form a joint venture.

The joint venture will provide substantial reach into Canada and the U.S. with transborder service to more than 30 cities covering over 95 per cent of U.S.-Canada demand, providing customers of both airlines with more travel choices than ever before.

The new JV will also enable Delta and WestJet to compete more effectively against other carriers, say the airlines.

Upon receipt of regulatory approvals in Canada and the U.S., Delta and WestJet will work together to implement all aspects of the enhanced cooperation including expanded codesharing, more closely aligned frequent flyer program and reciprocal elite benefits, joint growth across their U.S./Canada transborder network, and co-location at key hubs with more seamless passenger and baggage transit.

In December 2017 WestJet gave notice that it was ending its nearly eight-year relationship with American Airlines. The news came just a few weeks after it announced it was looking to expand its existing relationship with a joint venture with Delta.

WestJet and Delta already codeshare, but an airline JV deal takes the partnership to a whole other level.

The anti-trust immunity that goes along with airline JVs means that the airlines cooperate on everything, from scheduling to pricing to marketing and, critically, sharing the revenue from transborder flights.

The deal still needs approval from both Canadian and U.S. regulators. Air Canada and United were blocked from implementing a similar arrangement back in 2012.

There have been reports, as recent as June 2017, that Air Canada and United are seeking to again pursue a joint venture, now that Canadian federal regulations for JVs could potentially loosen up.