WestJet Airlines Sells 25% Stake To Foreign Carriers

U.S.-based Delta Air Lines (DAL) and Korean Air Lines are buying a combined 25% stake in Canada’s WestJet Airlines for $550 million U.S.The deal will see Delta invest $330 million U.S. for a 15% stake in WestJet and Korean Air invest $220 million U.S. for a 10% interest. The stakes in privately held WestJet are being sold by the carrier’s parent company, Toronto-based private equity firm Onex Corp. (ONEX). The equity stakes in WestJet come as airlines around the world look to merge and consolidate so that they can expand and dominate high-volume routes and strengthen their market position. Some analysts say this approach has led to higher fares and reduced competition in the global aviation industry, especially in Canada where the domestic market is dominated by WestJet and Air Canada (AC). Delta’s new stake in WestJet comes amid a challenging airline market. Delta, Air Canada, and other carriers, have revised down their outlooks for the remainder of this year amid economic uncertainty and signs that people are planning to travel less.WestJet has had various partnerships with both Delta and Korean Air Lines since 2011. Moving forward, WestJet will continue to be majority owned by Onex. The new equity stakes also come at a time when Canadian airlines are seeing a decline in U.S.-bound bookings following U.S. President Donald Trump’s tariffs imposed on Canadian products. Delta Air Lines stock has declined 18% this year to trade at $48.34 U.S.