Delta and WestJet up the stakes in the transborder market; competitors have decisions to make

Delta Air Lines has arguably put the final pieces of its global network strategy in place, having plans to forge a joint venture with Canada's second largest airline WestJet. If regulators endorse the proposed tie-up, Delta will have major joint ventures in Latin America, the trans-Atlantic, Asia and Canada. An obvious question is whether Delta will follow a now-familiar pattern and take an equity stake in WestJet.

The proposed JV propels WestJet to a truly global, network player, giving the airline another tool to compete with rival Air Canada. However, it is another big ticket item WestJet is adding to its list for completion during the next couple of years. The airline is also in the process of launching its ULCC Swoop, and readying for new long haul operations with Boeing 787 widebodies.

Delta's large US competitors are chasing their rival by aiming to establish joint ventures in Latin America. Now they need to decide whether the proposed Delta-WestJet JV raises the competitive stakes high enough to pursue their own tie-ups north of the border.

Given that both Air Canada and United are Star Alliance partners, American could find itself scrambling to remain competitive in the Canada-US transborder market.