Delta Forms Joint Venture with WestJet

December 7, 2017 ,   Industry

Delta Air Lines and Canadian carrier WestJet have reached a deal to form a joint venture. If approved by regulators, the agreement would allow the airlines to share revenue and profits.

The deal underscores the ambitions of Delta to grow globally following years of post-bankruptcy consolidation, that has left the company and 3 other large United States carriers in control of over 2/3 of the domestic market.

Delta Air Lines

Consolidation via partnerships is evident on some of the most lucrative routes in the world. As of December, 88% of seats flown from Canada or the United States to Europe were operated by a carrier that is in joint venture or other alliance.

Delta's deal would bolster its international presence as low-cost upstarts go after travelers with sub-US$100 fares.

Due to foreign ownership restrictions, airlines' outright purchases abroad are ordinarily out of reach and a partnership with an international airline would give Delta, and other carriers that adopt the strategy, a foothold in fast-growing foreign markets.

Toronto-listed WestJet is the second-largest airline in Canada, after Air Canada, which has code-sharing agreement with United. If approved, the deal would be the 8th partnership of Delta with an international airline. Previously, WestJet and Delta had a code-sharing agreement.