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Delta Announces WestJet Partnership, Quietly Goes Global

Delta Air Lines is continuing to expand with a new merger with WestJet, the companies announced Wednesday.

On Wednesday, Delta Air Lines and WestJet announced a joint venture that would expand Delta’s footprint further into Canada. The company has recently been expanding on four different continents through joint ventures and buying minority stakes, so the Canadian expansion was just a matter of time. Once the deal is approved by regulators, the two companies will be able to share their revenue and profits.

Delta and WestJet have worked on a code-sharing agreement in the past. If this new deal is approved, it will be Delta’s eighth international airline partnership. So far the airline works together with Air France-KLMVirgin Atlantic, Aeromexico, China Eastern Airlines, and Korean Air, among others.

Partnership consolidation is big business in the airline industry. Currently, around 88 percent of flights to Europe from North America are operated by airlines in a joint venture or in an alliance with another industry airline. It has a lot to do with foreign ownership restrictions, meaning most airlines are unlikely to be able to outright purchase an airline abroad. Partnering with the international airlines instead allows both companies to benefit from a mutual network enhancement as air traveler numbers continue to grow. United Airlines, for example, codeshares with Air Canada, and American Airlines just announced its intention to buy a stake in China Southern Airlines.

“Most markets around the world have room for one or two major carriers,” Samuel Engel, aviation practice head at consulting firm ICF, told CNBC. “[Delta is] making sure that they’re not the loser in the game of musical chairs.”

[Photo: Shutterstock]

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robsaw December 11, 2017

It isn't a "merger" - use of that term is completely wrong. It is a JV on new transborder routes. Perhaps Delta will take a minority stake in WestJet at some point but there are no plans to do anything at an ownership level requiring disclosure at this time.

Sabai December 8, 2017

Delta, the global behemoth that whines for US Governemnt protection from the ME3