Tags: US | Southwest | WestJet

Southwest-WestJet Deal Could Be in Jeopardy

Friday, 02 Apr 2010 12:47 PM

Southwest Airlines Co. may be looking soon for a new partner to provide service to Canada.

Southwest has planned for more than a year to sell travel to Canada on board flights operated by Canada's WestJet.

But Canadian media reports indicate that WestJet is talking about a similar deal with Delta, which would transfer a few takeoff and landing slots at New York's LaGuardia Airport to the Canadian carrier.

Southwest's executive vice president of planning, Bob Jordan, said Thursday that a WestJet-Delta deal could conflict with the Southwest-WestJet partnership. Jordan also said WestJet has made unacceptable demands of Southwest, which he didn't describe.

If the two can't work out their differences, Jordan said, Southwest will look for other ways to offer customers flights to Canada.

WestJet spokesman Robert Palmer said the Calgary-based airline "continues to have a strong relationship with Southwest and an agreement in place." He declined to elaborate. Delta Air Lines Inc. declined to comment.

Dallas-based Southwest carries more U.S. passengers than any other airline, but it doesn't fly to other countries. In July 2008, CEO Gary Kelly announced that in "a big step," the carrier would add service to Canada through a deal with WestJet.

Since then, Southwest announced plans to cooperate with Volaris on service to Mexico. It also would like someday to sell travel to the Caribbean and Europe.

Under a so-called code-sharing agreement, Southwest would sell seats on WestJet planes flying from a few locations in the United States to Canada. The two airlines would share the revenue. Code-sharing is cheaper for Southwest than expanding its own fleet for international flights.

The airlines initially planned to announce schedules and other details by the end of 2009. Gregg Saretsky, who became WestJet's CEO on Thursday, has said Southwest wasn't ready.

In a statement Thursday, Southwest's Jordan disputed Saretsky's claim. He said the venture was going according to schedule.

"We are, and always have been, prepared to move forward to implement our agreement with WestJet," Jordan said. If WestJet walks away to make a deal with Delta, he added, Southwest is still very interested in selling travel to Canada.

According to aviation consultant Robert Mann, Southwest ran into delays upgrading its technology to mesh with another airline in code-sharing.

"Time equals money, and WestJet's new CEO, Greg Saretsky, seems unwilling to wait," Mann wrote in an e-mail. He added that Southwest could always fly its own planes to Canada or Mexico.

Mike Boyd, who studied the deal for one of Southwest's unions, said tapping the Canadian travel market, especially Toronto, with a partner would help Southwest but "is not an imperative."

When Delta made LaGuardia slots available as part of a larger deal with US Airways, WestJet jumped at the opening, Boyd said.

WestJet started as a regional carrier in western Canada and has grown into a low-fare rival to Air Canada. Like Southwest, it uses Boeing 737 jets.

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Southwest Airlines Co. may be looking soon for a new partner to provide service to Canada.Southwest has planned for more than a year to sell travel to Canada on board flights operated by Canada's WestJet.But Canadian media reports indicate that WestJet is talking about a...
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2010-47-02
 

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