WestJet's CEO has revealed the airline isn't planning to renew a proposal for a joint venture with Delta Air Lines.
The airlines had announced plans to operate as a cross-border joint venture, but dropped their application in NOV 2020 after the U.S. Department of Transportation demanded harsh terms to provide antitrust immunity and approve the JV, including that WestJet get rid of all of its eight slots at LGA.
WestJet CEO Alexis von Hoensbroech, who took over the position in 2022, told Airline Weekly in an APR, 2023 interview that the carrier is not rushing to reapply.
Von Hoensbroech says WestJet will take a wait-and-see approach. "We are happy with what we are doing, and we haven’t decided to take any decision on potentially refiling a joint venture," von Hoensbroech said. "We are happy with what we have, and [will] take it from there."
That's a change from previous WestJet management's position, which had always spoken of renewing the JV application as soon as possible. The analysis says that, without a JV, WestJet is at a competitive disadvantage to Air Canada, which did enact a JV with United Airlines in 2022 that Air Canada's Chief Financial Officer Amos Kazzaz described in MAR as already “surpassing expectations.”
WestJet and Delta retain a codeshare agreement, but without a JV, the airlines can only codeshare on U.S.-Canada flights, according to the report. Operating as a joint venture would allow the two airlines to codeshare on all flights, and allow them to collaborate on issues like price, inventory and routes.
According to SimpleFlying, in pursuing a JV, Delta and WestJet also "wanted to create a more extensive network that also includes WestJet's ultra-low-cost-carrier brand Swoop. Hoping to compete against the Air Canada and United Airlines partnership, the airlines sought to create a more comprehensive and extensive transborder network."
Even without a JV, in addition to its codeshare agreement, WestJet recently started four new routes to Delta hubs: YVR-ATL, YEG-MSP, YYC-DTW, and YEG-SEA, as Open Jaw reported. It has also made its YWG-LAX service year-round, increasing access to another Delta hub. Von Hoensbroech said the airline sees a lot of traffic on its routes to Delta hubs.
WestJet and Delta also introduced reciprocal frequent flyer benefits in 2021.
Meanwhile, as SimpleFlying notes, with cross-border codeshares and loyalty program partnerships already in place, "The two carriers are getting a little close to the edge of their limits on partnerships."
