Delta and Korean Air Acquire 25% Stake of WestJet — What To Know

Delta Air Lines and Korean Air are buying 25% of the second biggest airline in Canada, deepening cooperation between the SkyTeam alliance and WestJet. For U.S. flyers, this will bring a closer partnership between Delta and WestJet.

Let’s have a look at what this development might mean for travelers.

Delta and Korean Air Invest in WestJet

Delta shared that it’s buying 15% of its Canadian partner WestJet for $330 million, while Korean Air is buying another 10% for $220 million, according to a statement.

Delta then plans to sell 2.3 per cent of the Calgary-based carrier to its European partner, Air France–KLM, for $50 million.

The seller is Toronto-based asset manager Onex, which had bought WestJet in 2019 for $3.5 billion, the Toronto Globe and Mail reported. The fund manager will continue to own the majority of WestJet shares, but Delta and Korean will get 2 seats on the 13-member WestJet board.

Delta frequent flyers may already know that Delta and WestJet have been codeshare partners for years, since 2011. So have Korean and WestJet, since 2012. Delta flyers can earn SkyMiles and dollars that qualify for elite status on WestJet flights, too.

Will WestJet Join the SkyTeam Alliance?

This is the latest in a string of equity investments Delta has made in airlines, including Air France-KLM, LATAM, Aeromexico, Virgin Atlantic, China Eastern, and Korean Air’s parent company, Hanjin KAL.

Many of those airlines are part of the global SkyTeam alliance, and this latest deal may position WestJet for future entrance into the group. WestJet’s main competitor, Air Canada, is a member of the rival Star Alliance, which includes United.

WestJet chief executive officer Alexis von Hoensbroech told The Globe and Mail that the 25% investment “will help take our passenger experience to a new level” and is “an endorsement of WestJet’s strategy and unique culture.”

WestJet Fleet and Route Strategy

With a network stretching from Japan to Europe and centered on North America, WestJet is expanding, with dozens of Boeing 737 Max jets on order and a small but capable long-haul fleet of Boeing 787-9s. On the latter, WestJet has a business class with lie-flat beds that can rival the products of much larger and more storied airlines.

Von Hoensbroech also said that while traffic to U.S. destinations has dropped because of the trade war launched by the U.S. administration, demand remains strong for flights to vacation destinations in Asia and Europe. He said closer ties to the 3 international airlines will help WestJet “better align our capacity with demand.”

Final Thoughts

This is good news for frequent Delta flyers. Closer cooperation with WestJet can only be positive for passenger experience and ease of travel.

A logical consequence of the 25% investment by major SkyTeam carriers in WestJet may also be the Canadian airline’s entrance into the alliance, but that isn’t on the table just yet. We can surmise that Delta, Korean, and WestJet have discussed the possibility — and we’ll bring you news if and when that major step is close to materializing.