(Reuters) -Delta Air Lines and Korean Air Lines will acquire an aggregate 25% stake in Canada’s WestJet Airlines for $550 million from private equity firm Onex Corp, the U.S. carrier said on Friday.
Delta will invest $330 million for a 15% stake and Korean Air will inject $220 million for a 10% interest. The U.S. airline also plans to sell and transfer a 2.3% stake in WestJet to its joint venture partner, Air France-KLM, for $50 million.
WestJet, which has had various partnerships with Delta and Korean Air since 2011, will continue to be owned and controlled by Onex, Delta said.
“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,” Onex Partners Co-Head Tawfiq Popatia said.
The agreement comes at a time when Canadian airlines are seeing a decline in U.S.-bound bookings following President Donald Trump’s tariffs on Canada and suggestions that the country should be annexed by the U.S.
Air Canada, the country’s largest airline and a WestJet rival, lowered its annual adjusted core profit forecast on Thursday due to the waning trans-border travel, weakening local currency and trade tensions with the U.S.
(Reporting by Sameer Manekar in Bengaluru; Editing by Shreya Biswas)
