Canada’s federal Competition Bureau in Ottawa has given its approval to a proposed joint venture between WestJet Airlines Ltd. (TSX: WJA) and Delta Air Lines (NYSE:DAL)
The Competition Bureau gave its approval in a letter to both airlines, stating that it does not intend to challenge the proposed deal that would expand the two carriers' code sharing agreement — where passengers can purchase seats from one airline on a flight operated by another.
For WestJet, the joint venture would open more of the southern U.S. and western European markets via Delta flights through airports in Atlanta and Barcelona. Despite the Delta tie-up, luring passengers away from Air Canada could be difficult because WestJet isn't part of a major airline alliance such as Air Canada's Star Alliance, SkyTeam or Oneworld.
Air Canada (TSX:AC), the country's biggest carrier, commands nearly a quarter of total capacity on flights between Canada and the United States, while WestJet and Delta will have about one-fifth combined. The proposed joint venture is still subject to regulatory approval from the U.S. Department of Transportation.
