Delta plans to sell portion in turn to Air France-KLM

Delta Air Lines and Korean Air will both purchase minority equity stakes in WestJet, the Canadian airline, from Onex Partners, the private equity platform of Onex Group, a Canadian investor and alternative asset manager. Under the agreements, according to an announcement, Delta and Korean will acquire independent equity stakes totaling 25% in WestJet. Delta will be investing $330 million and acquiring a 15% stake, and Korean will invest $220 million in exchange for a 10% stake.

Upon closing, Delta has the right and intent to sell and transfer a 2.3% stake in WestJet to its joint venture partner Air France-KLM, also an existing WestJet partner, in exchange for $50 million, according to an announcement. This separate transaction would remain subject to certain Air France-KLM approvals. The Onex Group will continue to own and control the Calgary, Alberta-based airline.

Delta and Korean have each been codeshare partners with WestJet for years. The broader partnerships, said the announcement, will support future benefits for travelers, including an elevated, more seamless travel experience for customers.

Ed Bastian, CEO of Delta, said investing in a 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.”

These investments and the enhanced partnerships they bring, said WestJet CEO Alexis von Hoensbroech, “are an endorsement of our people and WestJet’s differentiated performance through an extraordinary period for aviation in recent years.”

Korean Air and WestJet have been partnering since June 2012, steadily expanding their transpacific connectivity. Through their codeshare agreement, travelers on both sides of the Pacific can access flights between Seoul and Vancouver, Toronto and Calgary, with onward connections to WestJet’s domestic Canadian and US routes, as well as Korean Air’s extensive Asian network.