WASHINGTON: Delta Air Lines and Canada’s WestJet said late on Friday they had scrapped a proposed US-Canada joint venture after the US government demanded changes the airlines insisted were “unreasonable and unacceptable”.
Last month, the US Transportation Department as part of its tentative antitrust immunity approval said it would require the carriers to remove Swoop, an ultra low-cost carrier affiliate of WestJet, from the alliance, and divest 16 takeoff and landing slots at New York’s LaGuardia Airport.
Arbitrary and capricious
The airlines said in a filing that the US demands were “arbitrary and capricious” especially the slot divestitures. They had argued the alliance would “optimise aircraft utilisation, enhance schedules and lower costs”.
The airlines said in a joint statement they remain committed to developing a joint venture “but in the meantime will explore deepening the alliance”.
The Delta-WestJet joint venture would have had a combined 27 per cent share of scheduled air carrier trans-border capacity, while the dominant carrier, Air Canada, has 45 per cent.