Southwest, WestJet Pact Appears To Be At Risk

Titlu: Southwest, WestJet Pact Appears To Be At Risk
Sursa: http://news.airwise.com/story/view/1270160906.html
Autor: Reuters
Data: 01/04/2010

Citat :

A planned code-share deal between Southwest Airlines and WestJet Airlines appears to be at risk after Southwest learned WestJet was in talks with other airlines about similar partnerships.

In a statement, Southwest said a possible code-share partnership between WestJet and Delta Air Lines "could be inconsistent" with an earlier agreement between Southwest and WestJet, Canada's No. 2 carrier.

In 2008, the two airlines signed a code-share plan that would give Dallas-based Southwest a foothold in Canada and boost WestJet's expansion plans.

This agreement was put on hold in May 2009 amid a sharp slide in air travel. A Southwest spokesman said the airline has been "trying to move forward with it (the agreement)."

But in recent weeks, WestJet has "requested material and significant changes to our agreement that we could not accept," Southwest's Bob Jordan, executive vice president of strategy and planning, said in a statement.

Southwest spokesman Chris Mainz declined to describe those changes or clarify Jordan's remarks.

WestJet said this week that it started talking to other airlines, including Delta, about other partnerships to expand its network.

The news apparently caught Southwest off-guard; the airline said it learned of WestJet's actions through news reports.

Southwest also said it learned of a deal in which Delta would transfer slots in New York's LaGuardia Airport to WestJet.

In a statement, Southwest said it had not yet been notified of WestJet's intent to end the agreement, but reiterated its intent to expanding its service to Canada.

"Southwest remains very interested in offering our loyal customers service to Canada via the most efficient means possible," Jordan said in a statement.

Titlu: Southwest Considers Entering Canada Alone
Sursa: http://news.airwise.com/story/view/1270554555.html
Autor: Reuters
Data: 06/04/2010

Citat :

Southwest Airlines is willing to tackle the Canadian market alone if its current pact with WestJet Airlines comes undone, a senior executive with the Dallas-based airline said on Monday.

"If a partnership with WestJet were to unravel, then we would take a step back and reevaluate whether a partnership is more appropriate or serving Canada directly ourselves would be more appropriate," Bob Jordan, executive vice president of strategy and planning, said.

WestJet said last month that it was in talks with other airlines, including Delta Air Lines, about partnerships to widen its travel network.

A possible deal between WestJet and Delta would violate an existing code-share agreement with Southwest, Jordan said.

Southwest and WestJet signed a code-share agreement in 2008, which would have given Southwest a foothold in the Canadian market and helped WestJet expand. But the deal was put on hold in May 2009 as air travel declined in the recession.

Southwest is in the process of hammering out a code-share agreement with Mexican airline Volaris. It wants to launch the code-share with WestJet in late 2010.

Jordan emphasised that Southwest's pact with WestJet was still in place, but said if the deal fell through, Southwest would prepare to go into the market alone or with another partner.

"The code-share is a lower risk way to enter those markets, Jordan said. But, he added, "We never said the partnerships with Volaris or WestJet took serving those countries ourselves off the map."

Jordan said finding a partner to enter Canada would be "difficult" given the market is dominated by Air Canada and WestJet.

"So it narrows considerably the field for potential candidates, which again is why a logical alternative is to just serve it (Canada) yourself," Jordan added.

Jordan said Southwest had not approached Air Canada recently about a code-share agreement.

But going into Canada alone would present its own set of challenges, which Southwest would have to tackle once WestJet says whether or not it will proceed with a Delta deal.

"We have not done a lot of work specifically on the network implications to cost and benefit around serving Canada ourselves," Jordan said. "So we would need to back up and do that."

WestJet declined to comment.

"Step one is we've got to hear from WestJet about their intent," Jordan said. "There's no step 2 until we know that answer."

Titlu: Southwest Plans To End WestJet Pact
Sursa: http://news.airwise.com/story/view/1271458012.html
Autor: Reuters
Data: 16/04/2010

Citat :

Southwest Airlines said on Friday it has told WestJet Airlines that it will end a partnership agreement that would have given the low-cost US carrier a foothold in the Canadian market.

The move comes after WestJet proposed "significant changes" to the code-share agreement that the airlines had since 2008.

"Southwest cannot agree with the modifications to the confidential agreement," the Dallas-based carrier said.

Code-shares allow airlines to sell tickets on flights operated by another airline, limiting costs but broadening a single carrier's reach.

The carriers put the pact on hold last May as air travel fell because of the recession.

WestJet said last month that it was in talks with other airlines, including industry leader Delta Air Lines, about partnerships to widen its travel network.

Southwest appeared to be caught by surprise. It said in early April that it learned from media reports that WestJet was in talks with Delta. Southwest added at that time that a code-share between WestJet and Delta "could be inconsistent" with the Southwest-WestJet accord.

The carrier said on Friday it was interested in offering service to Canada, and would not rule out relationships with Canadian carriers or going into Canada alone.

"We think Southwest could eventually enter into an alliance with Air Canada or start service to select Canadian markets on its own," Standard & Poor's Equity research analyst Jim Corridore said in a note to clients.

WestJet issued a statement late on Friday responding to Southwest's move. The airline, Canada second largest carrier, said it agreed to suspend the code share plan.

"Together, we believe that ending the agreement is best for both companies at this point in time," said Hugh Dunleavy, WestJet's executive vice-president of planning and strategy.

Shares of Southwest fell 16 cents to USD$13.38 on the New York Stock Exchange on Friday. WestJet fell 23 Canadian cents to CAD$13.50 on the Toronto Stock Exchange.