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US transborder: markets still await response on Delta-WestJet JV

Nearly a year after announcing their plans to establish a joint venture,  Delta Air Lines and WestJet have formally applied to gain antitrust approval for their proposed tie-up from US authorities. It would be surprising if the Department of Transportation (DoT) issued an outright rejection of the JV given Air Canada’s heft if the US-Canada transbroder market.

Delta and WestJet do have ambitions to grow 20% in the transborder market, and add six new markets. Unsurprisingly, the two airlines are not disclosing those markets; but WestJet has already announced new service from its Calgary hub to Delta’s largest hub Atlanta in 2019, and more new service to Delta’s US hubs seems logical, following a service pattern adopted by Aeromexico after it established a JV with Delta.

The remaining unanswered question is how Delta and WestJet’s competitors will respond. Air Canada and United do no seem to be rushing to create their own JV even as they have held antitrust immunity since 1997. But the long standing Star Alliance partners are no doubt examining their options as transborder competitive dynamics change. An interesting development in Canadian aviation during the last year is changes in how JVs in the country are approved, which could make it easier for Air Canada and United if they choose to revive plans to establish a JV.

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