Korean Air and Delta Airlines will purchase a combined 25% stake in Canadian airline WestJet from Onex Partners in a deal worth around USD $550 million.
Korean Air and Delta Airlines will purchase a combined 25% stake in Canadian airline WestJet from Onex Partners - part of the Onex Group - in a deal worth around USD $550 million.
As part of the agreement announced by the three airlines, Korean Air will invest USD $220 million in exchange for a 10% in WestJet. Delta will invest USD $330 million for a 15% stake in the airline. Upon closing, Delta also has the right and intent to sell and transfer a 2.3% stake in WestJet to its Joint Venture partner Air France-KLM – subject to certain Air France-KLM approvals.
According to Korean Air and Delta, the deal will build upon their existing relationships with WestJet – which will continue to be under control by majority shareholder Onex Group. Delta's partnership with WestJet started in 2011 covering travel between the US and Canada, while Korean Air started its partnership with the Calgary, Canada-based airline the following year (2012).
The Korean Air-WestJet partnership covers trans-Pacific travel between Seoul Incheon and Vancouver, Toronto, and Calgary with onward connections onto domestic Canada and US routes. In addition, WestJet customers have access to connections in Asia operated by Korean Air.
“We are pleased to invest in WestJet as part of our continued commitment to enhancing transpacific connectivity,” said Walter Cho, Chairman and CEO, Korean Air and Hanjin Group. “This strategic partnership will enhance our global network and create long-term value for customers through greater choice and convenience.”
“Investing in a world-class partner like WestJet aligns our interests and ensures that we remain focused on providing a world-class global network and customer experience for travelers in the United States and Canada,” said Ed Bastian, CEO, Delta. “Together, Delta and our airline partners are connecting the world and transforming the future of travel.”
“Delta, Korean and Air France-KLM are among the world’s most prominent and best-managed airlines. Onex is delighted to welcome them as shareholders in WestJet,” said Tawfiq Popatia, Co-Head of Onex Partners.
“These investments, and the enhanced partnerships they bring, are an endorsement of our people and WestJet’s differentiated performance through an extraordinary period for aviation in recent years,” said Alexis von Hoensbroech, CEO, WestJet.
The deal will add to Delta's equity investments in several airlines including Air France-KLM, LATAM, Aeromexico, Virgin Atlantic, China Eastern and Korean Air’s parent company, Hanjin KAL.
WestJet currently operates four weekly flights between Calgary and Seoul Incheon Airport.
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