Delta Airlines and Korean Air have joined to take a 25 percent stake in WestJet, Canada's second largest airline and a long-time code share partner of both new investors. Delta is paying $330 million for 15 percent of WestJet and Korean is getting 10 percent for $220 million. After the deal closes, Delta will sell 2.3 percent of its stake to Air France/KLM for $50 million. WestJet is owned by Onex Corp., a Canadian investment firm, which at one time owned Spirit AeroSystems in Wichita. It offers scheduled service to all major Canadian cities and serves Europe and Asia from hubs in Calgary and Toronto. Canadian regulations require that airlines registered in Canada be majority owned by Canadian companies or individuals.
Good overview, but it missed a few things I found while digging through OpenAI. Skipped the cargo angle with Korean Air, glossed over the regulatory headaches around Canadian ownership, and probably gave the financial upside more credit than it deserves, given the messy work of integrating systems and fleets. But maybe there’s more to it.
Should be a good move as Westjet is well supported in western Canada and has a good network with a dedicated workforce. We have a new government but time will tell if there is any commitment to western concerns and enterprises west of the lakehead. I think it’s a smart move by Delta and Korean as it expands the routeing close to globally with a modest investment.
Tom, I agree that Canada’s approval is likely a given, with Onex maintaining majority control. But the U.S. side is a different story. Given the current political climate, I wouldn’t be surprised if American, United, and other U.S. carriers push back. They won’t want Delta and Korean grabbing a bigger share of the transborder market without a fight. The DOT has already made this clear back in 2020, Delta and WestJet had to scrap their joint venture after being told to give up LaGuardia slots and drop Swoop. They walked away, calling the demands unreasonable.
Westjet has been troubled in serving passengers, in recent years. So does need leadership.
(Onex purchased Boeing Wichita’s commercial operations. Gerald Schwartz is the entrepreneur, married to Heather Reisman who started Indigo Books and Music.
She had to take back management of Indigo after a new CEO shifted the company towards clothing (‘how to ruin a brand name’ in one lesson. Ruining Westjet took longer. It began as an upstart with very good customer service.)
Ruining Westjet took longer. It began as an upstart with very good customer service.)