Category Archives: Delta Airlines
“A big part of our mission here is making the world a smaller and smaller and smaller place.” —Delta Air Lines CEO Ed Bastian, Oct. 18, 2017
This quote from Bastian, uttered as he fielded questions from reporters in Atlanta to witness the public debut of Delta’s first Airbus A350-900 in mid-October, reverberated after Delta and WestJet announced their preliminary agreement to form a US-Canada transborder joint venture. Coming just seven months after Delta and Aeromexico kicked off a transborder JV on the US’s southern border, a Delta-WestJet tie-up could lead to the creation of a de facto trans-North American airline with an extensive network spanning the continent.
WestJet CEO Gregg Saretsky has already signaled an interest in using the prospective Delta-WestJet JV as a door to cooperation with Aeromexico (and other Delta global partners, for that matter). Aeromexico is 36%-owned by Delta, which effectively added Mexico City, Monterrey and Guadalajara to its North American hub network of Atlanta, Detroit, Los Angeles, Minneapolis-St. Paul, New York JFK, Salt Lake City and Seattle when it launched the US-Mexico transborder JV. WestJet, with its roots as a point-to-point LCC, is just starting to develop a hub-and-spoke network fueled in part by feeder traffic from its WestJet Encore regional subsidiary.
If the WestJet-Delta JV launches in 2019 as planned, Delta will at least add WestJet-base Calgary to its hub network. But Canada’s second-biggest airline, which will start taking delivery of Boeing 787-9s in 2019 and has its eyes on transpacific flights to China, surely will continue to build its presence across Canada, including in Vancouver and Toronto.
From an air transport perspective, the Mexico-US and US-Canada borders are largely artificial. Were it not for ownership and control restrictions, an “Air North America” would already exist and treat Canada, the US and Mexico as a single market. Delta is pushing in this direction.
The combination of antitrust-immunized JVs across both US borders—with airport facilities co-located and costs and revenue pooled—creates a potentially powerful network that touches not just North America’s major cities, but gives Delta and its partners access to passengers in small markets in all three countries. Those passengers, in turn, get access to an immense global network. You won’t have to live in Atlanta or Mexico City or Toronto to, with perhaps just one connection, get to a Delta A350 headed for Seoul or an Aeromexico 777 headed for Madrid or a WestJet 787 headed for Shanghai.
Expect talks to quickly heat up again to revive the Air Canada-United Airlines transborder JV idea the carriers scrapped in 2012 after regulators, particularly in Ottawa, required too many concessions. The Canadian government has signaled it will start looking at airline antitrust-immunity cases with a broader “public interest” perspective and not nit-pick route-for-route, as it did with Air Canada-United earlier this decade.
Bastian said the Delta-Aeromexico JV has super-charged growth for both carriers on transborder flying. “We’re growing our traffic into Mexico at a double-digit clip and Aeromexico is growing their traffic into the US at a double-digit clip,” he said, adding that the JV is expected to continue to grow “in a significant way.” Imagine the potential of adding another JV traversing the US-Canada border to the equation.
U.S./Canada joint venture to offer more choices for transborder flying
ATLANTA and CALGARY, Dec. 6, 2017 /CNW/ – Delta Air Lines (NYSE: DAL) and WestJet (TSX: WJA) have agreed to deepen their existing partnership by entering into a comprehensive transborder joint venture that will increase travel choices between the U.S. and Canada.
The airlines have entered into a preliminary memorandum of understanding regarding their intention to deepen their existing partnership to form an commercial joint venture arrangement, which will offer customers access to an extensive transborder route network, world-class airline products, enhanced frequent flyer benefits, shared airport facilities and amenities, and a more seamless travel experience.
Highlights of the planned joint venture arrangement, subject to board approvals, execution of definitive agreements and applicable regulatory approvals, in the United States and Canada, include:
- Coordinated flight schedules for new nonstop flights to new destinations, expanded codesharing and seamless and convenient connections on the airlines’ extensive networks in the U.S. and Canada.
- Enhanced frequent flyer benefits including reciprocal benefits for top tier members of both airlines.
“With its strong brand and employee- and customer- centric culture, WestJet is the perfect partner for us in the U.S./Canada transborder segment and together we will produce great results for our respective employees, customers and investors” said Steve Sear, Delta’s President – International and Executive Vice President – Global Sales. “We look forward to applying Delta’s experience building successful joint venture partnerships to this important segment of transborder travel, the second largest international segment for U.S. travel.”
“This agreement will bring heightened competition and an enriched product offering to the transborder segment, both of which will benefit our guests,” said Ed Sims, WestJet Executive Vice-President, Commercial. “This is an important step in WestJet’s mission to become a global airline. We are delighted to be working with the premier U.S. carrier, Delta Air Lines, in this joint venture.”
Delta has a 25-year track record of partnering closely with airlines around the globe, beginning with the first successful transatlantic partnership, when Northwest and KLM launched their joint venture in 1993. With this agreement, Delta will have eight partnerships with leading carriers in the world’s biggest aviation segments spanning Europe, Latin America, Asia, Australia and Canada. Through deep relationships and immunized joint ventures, Delta has successfully achieved many benefits of cross-border co-operation for its customers.
WestJet, Canada’s second-largest airline currently has 45 airline partners providing access to more than 175 destinations in over 20 countries. WestJet has also entered into a definitive purchase agreement for 10 Boeing 787-9 Dreamliners with the first aircraft expected to be delivered in January 2019. With one of the youngest fleets in the airline industry, WestJet continues its global growth while controlling operating costs and providing an award-winning guest experience.