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Delta and WestJet plan six new routes under pact

Delta Air Lines and WestJet are touting the expansion prospects of their proposed joint venture, promising at least 20% growth and six new routes in the market if approved.

The carriers would offer "new or expanded service on at least 20 nonstop routes", including new service between Chicago and Toronto, and additional connections to each other's hubs if regulators grant them antitrust immunity, Delta and WestJet say in their application to US authorities on 10 October.

Consumer benefits, a factor that the US Department of Transportation weighs highly in its evaluation of such pacts, would amount to at least $241 million annually from the combination of additional service and easier access to both airlines' networks, they say.

The joint venture will "align Delta’s and WestJet’s incentives to offer more flights and lower fares in the large US-Canada transborder market", they claim.

Delta and WestJet would be able to coordinate schedules and fares, jointly sell and market flights, and align operations in other ways under a metal-neutral joint venture.

The carriers reached an agreement on their tie-up in July after announcing plans to form an immunised pact in December 2017.

Delta and WestJet were second and fourth in the Canada-USA market, operating a combined 27% of seats, during the year ending in September, FlightGlobal schedules data shows. Air Canada was first with a 45.5% share and United Airlines third with an 11% share.

Air Canada and United, while they have had antitrust immunity in the transborder market since 1997, do not have a joint venture but operate under an "integrated relationship" that is slightly more than a codeshare. The proposed Delta-WestJet pact has the carriers considering getting closer, including a possible joint venture.

"We'll have to go back and look at how we can strengthen our [integrated relationship] with United," said Michael Rousseau, chief financial officer of Air Canada, in September.

Delta and WestJet, while redacting specifics of where they plan to grow except for a mention of the Chicago-Toronto market, emphasise the potential for greater connectivity over their respective hubs. This could mean more Delta flights to Calgary, Vancouver and Toronto, and new WestJet service to Atlanta, Detroit, Minneapolis/St Paul, Salt Lake City and Seattle Tacoma.

Other key markets where the carriers say they plan to expand are include New York-Toronto, Los Angeles-Toronto and Los Angeles-Vancouver. All of these markets are either served by Delta or WestJet today, schedules show.

Swoop, WestJet's new ultra low-cost subsidiary that launched in June, would be included in the joint venture, the carriers say in their application. They consider the ULCC a "competitive tool" in the market.

Delta and WestJet do not provide a timeline for approval and implementation of their partnership. However, it is unlikely to occur before 2019 based on expectations of an at least six-month review period expressed by WestJet chief executive Ed Sims earlier this year.

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