Airlines Strategy
WestJet Sells 25 Percent Stake to Global Airline Partners
Onex sells 25% of WestJet to Delta, Korean Air and Air France-KLM, enhancing international partnerships and growth prospects.
Global Airline Giants Take a Stake in WestJet as Onex Sells 25% Equity
In a significant recalibration of the Canadian aviation landscape, private equity firm Onex Corporation has finalized the sale of a 25% minority equity stake in WestJet. The deal, which closed on October 22, 2025, brings a consortium of global Airlines heavyweights, Delta Air Lines, Korean Air, and Air France-KLM, into WestJet’s ownership structure. This strategic transaction underscores a deepening of existing alliances and signals strong international confidence in Canada’s second-largest airline. For Onex, it marks a pivotal moment, allowing it to realize a substantial return on its 2019 investment while retaining a controlling 75% interest in the Calgary-based carrier.
The move is more than just a financial transaction; it represents a strategic alignment of interests among some of the world’s most prominent airlines. By bringing these partners on board as shareholders, WestJet is poised to enhance its global network, streamline customer travel experiences, and leverage greater operational synergies. The Investments builds upon years of established codeshare and interline partnerships, transforming them into a more integrated and collaborative framework. This evolution is expected to bolster WestJet’s competitive position, particularly as it continues to navigate the complexities of the post-pandemic travel era and challenge the market dominance of its primary competitor, Air Canada.
Breaking Down the Deal: A New Ownership Structure
The transaction, valued at US$550 million, meticulously distributes the 25% stake among the three airline partners. Initially, Delta Air Lines acquired a 15% stake for US$330 million, and Korean Air secured a 10% stake for US$220 million. In a subsequent move that highlights the interconnected nature of global airline alliances, Delta sold a 2.3% stake to its transatlantic joint venture partner, Air France-KLM, for US$50 million. This adjustment finalized the new minority ownership structure, leaving Delta with a 12.7% share, Korean Air with 10%, and Air France-KLM with 2.3%. The Onex Group, which includes its affiliated funds, remains firmly in control with a 75% majority stake.
This arrangement is the culmination of a process that began with Onex’s landmark acquisition of WestJet in 2019 for C$3.5 billion, a deal that took the airline private. Since then, Onex has guided WestJet through a significant restructuring, including navigating the severe turbulence of the COVID-19 pandemic. The sale of this minority stake allows Onex to recoup its initial equity investment while continuing to steer the airline’s long-term strategy. The infusion of capital and expertise from its new partners is expected to create substantial value as WestJet moves forward.
The leadership structure at WestJet will also reflect this new collaboration. As part of the agreement, Walter Cho, the Chairman and CEO of Korean Air, has been appointed to WestJet’s Board of Directors. He joins Benjamin Smith, the CEO of Air France-KLM, who has served on the board since 2021. This direct involvement from the leadership of its new shareholders ensures that the strategic interests of all parties are aligned at the highest level, fostering a more cohesive and powerful alliance.
“This closing marks a milestone in our airline Partnerships, building on existing relationships and reflecting confidence in WestJet’s strategy, performance, and people. We are proud to welcome our new airline shareholders and look forward to further strengthening our partnerships with their airlines to create long-term value for guests.”, Alexis von Hoensbroech, Chief Executive Officer of the WestJet Group.
Strategic Implications and Future Outlook
For each airline involved, this investment is a calculated move to strengthen their global footprint. Delta Air Lines continues its Strategy of acquiring minority stakes in key international partners to create a seamless travel experience for its customers. The enhanced partnership with WestJet solidifies its presence in the crucial U.S.-Canada travel market. Ed Bastian, CEO of Delta, emphasized that the investment “aligns our interests and ensures that we remain focused on providing a world-class global network and customer experience.”
For Korean Air, the deal provides a strategic entry point into the Canadian aviation market, which was valued at an estimated US$33 billion in 2024. It allows the Asian carrier to expand its network reach into North America significantly. Similarly, for Air France-KLM, the investment deepens its ties within the North American market and reinforces its powerful transatlantic joint venture with Delta. These strengthened partnerships are expected to yield tangible benefits, including enhanced codesharing, optimized flight schedules, and potential cost savings in areas like aircraft maintenance, especially given WestJet’s large order of Boeing aircraft.
Looking ahead, the transaction may be a precursor to further strategic moves. Onex has indicated the possibility of an Initial Public Offering (IPO) for WestJet within the next two years, which would return the airline to the public market. This investment from established global carriers is seen by many industry experts as a strong vote of confidence in WestJet’s operational strategy and future growth potential. The move is poised to intensify competition within Canada, offering travelers more integrated and diverse international travel options.
“Our new partners are widely regarded as among the best-performing and most innovative airlines in the world. This investment has created a terrific amount of value for Onex Partners and its investors to date, including through the unprecedented headwinds posed by the pandemic.”, Tawfiq Popatia, Head of Onex Partners and Board Director at WestJet.
A New Chapter for Canadian Aviation
The finalization of this deal marks the beginning of a new chapter for WestJet and the broader Canadian aviation industry. By welcoming Delta, Korean Air, and Air France-KLM as minority shareholders, WestJet has solidified its position on the global stage, transforming long-standing partnerships into a more robust, integrated alliance. This strategic alignment is designed to create long-term value not only for the airlines involved but also for travelers, who can expect more seamless connections and a more competitive market.
As Onex retains majority control, it continues to guide WestJet’s overarching strategy, now bolstered by the expertise and network strength of its new partners. With the potential for a future IPO on the horizon, the airline is well-positioned for growth. This transaction is a clear indicator that despite recent global challenges, there is strong confidence in the future of air travel and in WestJet’s ability to play a leading role in it.
FAQ
Question: Who owns WestJet now?
Answer: The Onex Group, a Canadian private equity firm, remains the majority owner with a 75% stake. A consortium of airlines holds the remaining 25%, with Delta Air Lines owning 12.7%, Korean Air 10%, and Air France-KLM 2.3%.
Question: Why did these major airlines invest in WestJet?
Answer: The investment deepens existing strategic partnerships. For Delta, it strengthens its North American network. For Korean Air, it provides a strategic entry into the Canadian market. For Air France-KLM, it enhances its transatlantic joint venture. Overall, it reflects confidence in WestJet’s strategy and performance.
Question: Will this change the travel experience for WestJet customers?
Answer: The deepened partnerships are expected to enhance the customer experience by providing more seamless travel options, better-integrated flight schedules, and expanded access to a global network of destinations through the partner airlines.
Sources
Photo Credit: WestJet
Airlines Strategy
Southwest Airlines to Launch First Airport Lounges in 2027
Southwest Airlines plans to open its first airport lounges in late 2027 at four locations, in partnership with Chase.
Southwest Airlines Co. (LUV) and JPMorgan Chase & Co. announced plans on September 2, 2026, to launch the carrier’s first-ever airport lounge network, with initial locations slated to open in late 2027. The infrastructure investment represents a historic departure for the 55-year-old airline as it aggressively overhauls its business model to capture premium revenue and compete directly with legacy carriers.
In a press release issued on September 2, 2026, Southwest Airlines confirmed that construction is already underway at four initial lounge locations. The announcement follows a July 23, 2026, earnings call where CEO Bob Jordan first indicated that airport lounge development was in progress.
Initial locations and Chase partnership
The first phase of the lounge network will debut at four major Southwest operating bases. The confirmed locations are Austin-Bergstrom International Airport (AUS), Baltimore/Washington International Thurgood Marshall Airport (BWI), Daniel K. Inouye International Airport (HNL) in Honolulu, and Nashville International Airport (BNA).
The airline stated that at least seven additional lounges are planned for high-demand business and leisure markets over the next several years. While the specific airports for the subsequent expansion phase have not been officially disclosed, the initial four represent some of the carrier’s most critical nodes for connecting and point-to-point traffic.
The lounge network is being developed in partnership with Chase, expanding a 30-year relationship between the two companies. Access to the facilities will be tied to a new, premium Southwest Rapid Rewards credit card issued by Chase, which is scheduled to launch concurrently with the first lounges in 2027. The physical spaces will draw on the design and operational framework of the existing Chase Sapphire Reserve Lounge Network.
“Southwest Airlines has built one of the most trusted brands in travel by delivering authentic Hospitality that Customers value. Our lounges will be a natural extension of that experience, offering Customers a place to relax and experience the Southwest brand in a new way.”
Tony Roach, Executive Vice President and Chief Customer & Brand Officer at Southwest Airlines, noted in the release that the lounge network represents a strategic investment in the Rapid Rewards program and deepens the financial partnership with Chase.
A radical shift in the Southwest model
The introduction of airport lounges is the latest in a series of fundamental changes to the Southwest Airlines passenger experience. The carrier has been undergoing a radical transformation of its business model to improve profit margins and attract higher-spending premium travelers.
This strategic pivot follows sustained pressure from activist investor Elliott Investment Management, which has pushed the airline’s leadership to adopt industry-standard revenue practices. Prior to the lounge announcement, Southwest abandoned its historic open seating model in favor of assigned seating and introduced extra-legroom premium seats.
The airline also ended its famous “Bags Fly Free” policy on May 28, 2025, introducing checked bag fees to align with competitors and generate ancillary revenue.
AirPro News analysis
We view the introduction of a proprietary lounge network as the final confirmation that Southwest Airlines has entirely abandoned its original low-cost carrier (LCC) identity. By adding assigned seating, premium legroom, bag fees, and now airport lounges, Southwest is transitioning into a hybrid carrier model designed to compete directly with Delta Air Lines, United Airlines, and American Airlines for lucrative corporate and premium leisure traffic.
The partnership with Chase is the financial engine making this infrastructure investment possible. To successfully launch a high-annual-fee premium credit card in 2027, Southwest requires a tangible premium product on the ground. The initial locations in Austin, Baltimore, Honolulu, and Nashville target markets with high volumes of originating traffic where Southwest holds a dominant market share, ensuring immediate utilization of the new facilities upon opening.
Sources: Southwest Airlines Co.
Photo Credit: Southwest Airlines Co.
Airlines Strategy
Riyadh Air and Saudia Launch First Codeshare Phase
Riyadh Air places its RX code on six Saudia domestic routes, launching the first phase of their codeshare agreement.
Riyadh Air and Saudia have officially launched the first phase of a strategic codeshare agreement, allowing the start-up carrier to place its “RX” designator code on six domestic routes operated by the Saudi flag carrier. Announced on August 27, 2026, via the Saudi Press Agency, the partnerships enables passengers to book connecting flights on a single ticket with baggage checked through to the final destination.
The integration aligns with Saudi Arabia’s National Aviation Strategy by linking the networks of its two major national carriers at King Khalid International Airport (RUH). The codeshare launch follows a Strategic Cooperation Memorandum of Understanding (MoU) signed by the two airlines on November 14, 2023.
Domestic network integration
The initial phase of the codeshare agreement covers Saudia-operated flights to Abha, Qassim, Dammam, Jeddah, Madinah, and Tabuk. Both airlines operate from Terminals 1 through 4 at RUH, a setup designed to facilitate seamless passenger connections between the two carriers.
Vincent Coste, Chief Commercial Officer of Riyadh Air, highlighted the technological focus of the partnership in the official announcement.
“Integrating different technology environments has been a fundamental principle of Riyadh Air’s digital model since its inception. This first major step in our cooperation with Saudia represents a significant milestone for the aviation sector. By bringing our strengths together, we are redefining the travel experience within the Kingdom,” Coste stated.
Broader expansion and global strategy
As a Public Investment Fund (PIF) company, Riyadh Air is building its operational framework ahead of its planned commercial launch. While the Saudia partnership secures domestic feed, the airline is simultaneously establishing its international footprint.
International regulatory approvals
Beyond domestic integration, Riyadh Air is rapidly securing international access. According to reporting by Aviation Week, the carrier recently obtained regulatory approval for flights to Beijing, Shanghai, and the United States. To build its global network, the airline has also signed strategic agreements and MoUs with multiple international operators over the past two years, including Delta Air Lines, Virgin Atlantic, Air China, and Turkish Airlines.
AirPro News analysis
We view this codeshare implementation as a critical operational test for Riyadh Air’s IT infrastructure before it begins operating its own aircraft. By utilizing Saudia’s established domestic network, Riyadh Air can market a comprehensive Saudi destination portfolio from day one of its commercial operations without needing to immediately deploy its own aircraft on short-haul domestic routes. This dual-carrier strategy effectively splits the market focus, allowing Saudia to maintain its domestic and religious traffic dominance while Riyadh Air concentrates on building RUH into a global transit hub to compete with neighboring Gulf carriers.
Sources: Riyadh Air
Photo Credit: Riyadh Air
Airlines Strategy
IATA Issues Aviation Policy Briefing for Italy in 2026
IATA released a policy briefing for Italy on Aug 27, 2026, addressing competitiveness, EU EES concerns, and aviation priorities.
The International Air Transport Association (IATA) issued a comprehensive policy briefing on August 27, 2026, outlining strategic priorities for the Italian government to bolster the competitiveness and resilience of the country’s Airlines sector.
Italy currently ranks as the world’s fifth-largest air transport market by passenger departures. In a statement accompanying the release, IATA emphasized that the briefing serves as a guide for Italian policymakers navigating growing Regulations hurdles, environmental commitments, and geopolitical tensions. The organization noted that Italy “derives huge benefits from aviation” and possesses multiple opportunities to strengthen its sector performance.
Navigating regulatory and operational challenges
The publication of the policy document follows months of coordinated advocacy by IATA and domestic aviation stakeholders. On May 21, 2026, IATA partnered with major Italian airport and airline associations, including Assaeroporti, Aeroporti 2030, the Italian Board Airline Representatives (IBAR), and Associazione Italiana Compagnie Aeree Low Fares (AICALF).
The coalition submitted a joint letter to the Italian Ministry of the Interior addressing operational concerns surrounding the European Union (EU) Entry Exit System (EES). The groups requested increased flexibility at the European level to manage passenger flows and mitigate e-gate congestion during the peak summer travel season.
Strategic priorities for the Italian market
The new briefing builds upon themes highlighted earlier in the summer regarding the short and medium-term prospects for Italian aviation. On July 13, 2026, Nicoletta Masi, IATA Manager Campaigns and Policy Southern Europe, noted the necessity of guiding the market through a global landscape marked by uncertainty and concerns over European competitiveness.
The policy briefing consolidates these concerns into actionable priorities for the Italian government, aiming to align national aviation strategies with broader European and global industry Standards.
AirPro News analysis
We view IATA’s targeted briefing for Italy as a proactive measure to secure stability in one of Europe’s most critical aviation markets. As the fifth-largest market globally for passenger departures, Italy’s infrastructure and regulatory framework disproportionately impact the broader European network. The ongoing friction regarding the EU Entry Exit System highlights a persistent disconnect between European regulatory ambitions and ground-level operational realities at major hubs. By aligning with domestic organizations like Assaeroporti and IBAR, IATA is attempting to leverage local political channels to influence broader EU policy implementation.
Photo Credit: Roma Fiumicino
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