Southwest Plans Flights to Canada

Airline Teams With Low-Fare Carrier

Southwest Airlines said yesterday that it planned to offer international service -- a first for the low-fare carrier -- through a deal with Canada's WestJet Airlines.

Southwest said that it had taken the first step toward striking a code-sharing agreement and that it planned to announce schedules and other details by late next year.

Under most code-sharing deals, airlines sell tickets for each other and share the revenue. Southwest passengers could connect to a WestJet flight to Canada. Frequent-flier programs are typically reciprocal.

The agreement is subject to review by U.S. and Canadian regulators.

Southwest chief executive Gary Kelly had often talked about offering service to nearby international destinations using a partner airline.

"We are confident that we've found a perfect fit with WestJet, and we are excited to work toward opening our expansive U.S. network to include Canadian destinations," he said in a statement.

Dallas-based Southwest has never offered international flights, and a code-sharing service to Hawaii ended when partner ATA Airlines ceased operations in April.

WestJet was created as a regional carrier serving five cities in western Canada and has expanded to 49 locations in Canada, the United States, Mexico and the Caribbean. Like Southwest, it uses Boeing 737s.

WestJet chief executive Sean Durfy called the potential deal "a defining moment for WestJet." He said an agreement would significantly improve the reach of both airlines.

Airline industry experts said the partnership would generate new revenue for each airline, and in Southwest's case, eclipse the $50 million the airline got at the peak of the ATA deal.

Stuart Klaskin, an aviation consultant, said the deal would show how Southwest can enter new markets without actually flying there and generate new revenue while taking little risk.

"This is the perfect match," he said. "The airlines look very similar, and they have similar management philosophies."

Klaskin said the deal would be a warmup for a similar expansion by Southwest into Mexico and Central America using a Mexican low-fare carrier, possibly Avolar.