Delta Air Lines and Canada’s WestJet have signed a preliminary MOU to form a joint venture (JV) that will include coordinated schedules and pricing on US-Canada transborder flights.

Atlanta-based Delta and Calgary-based WestJet already codeshare, but the JV will lead to expanded codesharing and “seamless … connections on the airlines’ extensive networks in the US and Canada,” the carriers said in a joint statement.

Speaking at WestJet’s investor day Dec. 6, WestJet president and CEO Gregg Saretsky said the two carriers will have “fully reciprocal” frequent flyer program benefits under the JV.

Delta and WestJet plan to finalize the terms of the JV agreement in the first half of 2018 and aim to launch the JV in the first half of 2019. The JV requires the approval of both airlines’ boards and regulatory clearance from the US and Canada. Given that pricing will be coordinated, the carriers will need to gain antitrust immunity from both countries’ governments.

“We anticipate that the agreement will be reviewed by US and Canadian regulatory authorities,” a Delta spokesperson said. “On the US side, this includes the Department of Transportation.” 

Delta president-international and EVP-global sales Steve Sear said the carriers’ combined transborder network “captures 95% of demand between the two countries.”

The announcement of the proposed JV across the northern US border comes seven months after Delta launched a US-Mexico transborder JV with Aeromexico. Sear noted that a Delta-WestJet JV would be Delta’s eighth cross-border agreement with another airline that features a JV or an equity stake or both.

Citing Aeromexico and Air France-KLM, both of which are partly owned by Delta and have antitrust-immunized JVs with Delta, Saretsky said a Delta-WestJet JV will “open doors for [WestJet] to play with those partners.”

Delta and WestJet began interlining in 2011 and codesharing in 2012. Their cooperation caused a planned extensive codesharing accord between WestJet and Dallas-based Southwest Airlines to be terminated before it was implemented. Southwest, which had wanted to partner with WestJet to extend its reach to Canada, said WestJet’s plans with Delta were “inconsistent” with the WestJet-Southwest deal.

The Delta-WestJet JV is slated launch around the same time the first of WestJet’s 10 Boeing 787-9s is scheduled to be delivered in 2019. Both the addition of 787s and the JV with Delta mark key milestones for WestJet as “we morph into a longer-haul international carrier,” Saretsky said.

Aaron Karp aaron.karp@informa.com