The U.S. temporarily approves the alliance between Delta and WestJet

The U.S. temporarily approves the alliance between Delta and WestJet

   The U.S. Department of Transportation said on Friday, The alliance agreement between Delta Air Lines and WestJet Canada has been initially approved.

  The Ministry of Transportation stated that as part of the preliminary antitrust exemption approval, it will require airlines to remove WestJet’s ultra-low-cost airline subsidiary Swoop from the alliance and cancel New York’s LaGuardi 16 take-off and landing slots at the Asian airport.

  The Ministry of Transport also proposed to require WestJet to provide inter-route channels for airlines flying to Canada and to review the proposed alliance within five years. The inter-route agreement allows consumers to use two airlines to fly to their destinations.

   The Delta-WestJet joint venture will account for 27% of scheduled airlines’ cross-border capacity, while the dominant Air Canada will have a 45% share.

  WestJet welcomed this preliminary approval, saying that the two airlines are reviewing orders and “will respond.”

  The two airlines stated that the alliance “will optimize aircraft utilization, increase flight frequency, and reduce costs.”

   Canada has a population of 38 million, which is the United States second only to Mexico. The second largest international passenger aviation market, Toronto flights account for more than 50% of the US cross-border air travel demand.

   In the past five years, the capacity of cross-border flights from the United States to Canada has increased by 15%, reaching 39 million seats per year.

   The U.S. Department of Transportation said that the competition between U.S.-Canada flights and cross-border flights from the U.S. to Mexico is not healthy, and pointed out that U.S.-Canadian flights are 12% higher.

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