Delta Air Lines and South Korea Airlines Plan Korea Airlines Plan to win 25% of Canada's discount carrier Westjet explains it aims to strengthen existing partnerships.
As part of the transaction disclosed by the three airlines on May 9, Delta plans to sell a portion of WestJet's shares to Air France KLM.
This plan requires regulatory approval.
All members of the SkyTeam Alliance, Delta, Korean Airlines, Air France and KLM are already in codeshare transactions with Westjet, which is not SkyTeam's partner.
The acquisition plan calls for Atlanta-based Delta and Seoul-based Koreans to buy a 25% stake in Westjet from OneX Partners, a Canadian private equity firm.
Delta plans to acquire 15% of Westjet from OneX for $330 million, while South Korea is expected to pay $220 million for its 10% stake.
After the deal closes, Delta says it is “right and intent” to sell a 2.3% stake in WestJet to Air France KLM for $50 million. The move continues to be subject to approval by Air France-KLM.
“OneX Group will continue to own and control Alberta-based Calgary,” says Career.
“The contracts will further match the profits of the airlines, expand customer profits and enhance connectivity in Canada and North America, Europe and Asia, and more,” the airline says. “The broader partnership supports future benefits for travelers, including high-quality, seamless travel experiences for customers around the world.”
The plan tightens relationship with the latest developments in long-term efforts by Air France-KLM, Delta, South Korea and WestJet.
For years, airlines were trying to form a joint venture. Under such transactions, airlines usually adjust schedules, sell seats on their opponent's flights, and share revenue. Westjet was talking about forming a Trans-Pacific and North American venture with Delta, a trans-Atlantic venture with Air France KLM.
Delta and WestJet had even applied to US regulators to establish such a deal. The U.S. Department of Transport approved such an alliance in 2020 on terms that include requiring airlines to sell their operating slots at New York Ra Guardia Airport.
Due to these conditions, Delta and WestJet withdrew their applications in November 2020.
Delta and Air France-KLM already have a joint venture to cover transatlantic flights, along with Virgin Atlantic Airways, while Delta and South Korea operate TransSpaific ventures.
