Delta and Korean Air invest in WestJet: What’s in it for travelers?

Delta Air Lines and Korean Air will acquire a combined 25% stake in WestJet, for a total of US$550 million. Under the terms of the transaction, Delta will acquire 15% of WestJet for US$330 million, while Korean Air will invest US$220 million for a 10% stake.

In addition, once this transaction is completed, Delta will have the right to transfer 2.3% of WestJet’s capital to Air France-KLM, its joint venture partner and also a WestJet partner. However, this remains conditional on Air France-KLM approvals.

For several years, WestJet has been working with Delta and Korean Air as part of commercial alliances, allowing code-sharing on their respective flights. This made things easier for passengers, as they could combine different flight segments on a single ticket, and check in their baggage only once.

Now Delta and Korean Air will be more than partners… they’ll be shareholders!

This is a major transaction for Canadian airline WestJet. Does it pave the way for an alliance with SkyTeam, whose members include Delta Air Lines, Korean Air and Air France-KLM?

For Canadian travellers, this means even more travel options and better integration between the networks of the different airlines. Eventually, there could also be recognition of the WestJet Rewards program between SkyTeam airlines. Perhaps WestJet points could be used to go even further, as well as to travel on other airlines. This will be followed.

In the short term, this transaction will change nothing. But in the medium and long term, we’ll be keeping a close eye on this transaction and its developments.

This will particularly affect the evolution of the WestJet Rewards loyalty program and the new benefits that could emerge for Canadian travellers. This alliance could also accelerate the harmonization of flights, schedules and connections between these carriers, to simplify international travel for WestJet passengers.

In fact, yesterday we talked about a partnership with WestJet and Canadian Tire (Triangle Rewards). It will be very interesting to see all the possibilities to come between all these players!

This strategic alliance marks a turning point in WestJet’s international strategy, and will strengthen its position vis-à-vis Air Canada, which is with Star Alliance.