Delta, WestJet to Form Cross-Border Joint Venture

December 8, 2017

File photo of a WestJet Boeing 737-800 (C-GAWS). Image courtesy of David (Aeroprints)


Yesterday, WestJet and Delta Air Lines announced plans to form a "cross-border" joint venture, continuing a strong five-year relationship between the two carriers. This new joint venture will allow both airlines to coordinate their schedules to allow for connections onto partner flights, expanding their combined route networks across Canada and the United States, as well as allowing for more benefits to members of WestJet Rewards and Delta SkyMiles.


The new joint venture challenges Air Canada's dominance in the U.S. market, according to the Financial Post. Air Canada is currently involved in a joint venture with United Airlines, one of Delta's largest competitors in the domestic market. 


WestJet Chief Executive Officer Gregg Saretsky hailed the pending joint venture as one of the major accomplishments for WestJet in the past several years, stating that "it goes a long way to neutralizing the disadvantage that we have suffered, I will say, over the last decade since we launched service in the trans-border (market)... This morning, we are equals, joining with the partner that has a reputation (of having) among the best service levels in the U.S. and around the world." Delta currently has joint ventures with Air France-KLM, Virgin Atlantic, and Aeromexico. It also has a a planned joint venture with Korean Air that is currently pending Government approval from South Korea. 


Originally beginning operations as a low-cost carrier, WestJet has, in recent years, begun expanding into more premium markets, with the "introduction of wide-body long-haul service in 2019 and new Boeing 737 jets that feature lie-flat business class seats." Its current fleet 737-Next Generation and 767-300ER aircraft will be complemented with new Boeing 737 MAX and 787-9 aircraft, beginning in 2019. Earlier this year, WestJet announced the introduction of Swoop, an ultra-low-cost carrier that "will offer fares that are 30 to 40 per cent cheaper than existing prices, but charge for ancillary services including checked baggage," allowing it to expand into the premium market and the price-sensitive market at the same time. According to Saretsky, WestJet will no longer remain an exclusive low-cost carrier, as the WestJet model is "no longer one-size-fits-all," because "We’ve [WestJet] just got to the point where the single brand can no longer fulfill all of the missions that we’re [WestJet] seeking to fulfill." 


"It’s a model of multiple airlines that are going to be purpose-built to fight in all of the market segments, to be able to do a better job, and win," Saretsky said. 


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