This news story HERE from Reuters indicates that United Airlines and Continental Airlines have agreed on stock pricing and the share price would seem to indicate that Continental got what it wanted.  If true, that would seem to indicate that Continental is for most purposes running this show.   I still wonder what becomes of John Tague at United.

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One story coming out this week is about comments from WestJet executive John McCleod stating that WestJet would still like to get a deal done with Southwest on codesharing.  Southwest terminated their original agreement a few weeks ago after WestJet supposedly asked for modifications that were untenable to Southwest and after WestJet’s new CEO, Greg Saretsky, indicated his preference for doing a codeshare with Delta.   What muddied the waters even more was a comment last week from Richard Andersen of Delta during a financial analyst call about how they had executed a codeshare agreement with WestJet which was then “clarified” by Delta PR people.  Delta PR people said they did not, in fact, have an agreement in place.

This sounds like a romance drama my 15 year old daughter would get caught up in.

I never thought WestJet’s moves over the past month made sense.  It felt like WestJet considered itself bigger than it was and more of a player than it was.  Let’s remember that WestJet is a Canadian airline operating in the Southwest LCC model.  And even though it is Canada’s second largest airline, that ain’t saying much when you consider the population of Canada and the size of Air Canada as compared to airlines in the US.   Canada is a country of 34 million people or roughly 1/10th of the population of the United States. 

Southwest’s home state of Texas has a population of 24 million people. 

Southwest, on the other hand, would be considered a major player on any continent.  They carry a lot of people every day and they do it with high marks for service, reliability and value.  And they’ve done it for nearly 40 years.  They are also not complete strangers to codeshares and we have already seen what a life-giving experience it is for Southwest to participate in a codeshare with an airline.  As an airline, they are definitely not participating in their first rodeo.  They make their mistakes but they are definitely a world class competitor too.

I can only imagine that Delta (and the rest of SkyTeam) look at WestJet and wonder when it will grow up enough to have the training wheels removed from its bicycle.  They play Texas Hold ‘Em poker for high stakes in the airline world and it’s kind of hard to believe that WestJet really thought they would be taken seriously by the likes of Delta, the world’s largest airline by any metric.

Could Southwest do a deal with them still?  Yes, I think so.  Southwest is friendly, a great place to work and it treats its staff well.  It doesn’t like to be taken advantage of but the people running Southwest are businessmen and businesswomen at the end of the day.  A deal still provides both partners with something good.  But WestJet is going to have to decide who it wants to be a bride to and stick with it.  I’d say the signal was sent but it wasn’t exactly loud enough or specific enough.  I expect another overture by WestJet before Southwest turns its attention back to WestJet.

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