Southwest Fail: Technical Delays Frustrate WestJet's New Boss

(MoneyWatch)  Now that Gregg Saretsky has taken the helm of Canada's WestJet, he's making his frustrations known. In an interview with Canada's Financial Post, he said that the airline is very focused on partnerships, but it is now looking at another US carrier after Southwest failed to perform on their original plans. Delta seems to be at the top of the list, and that creates problems in New York. Strange? Read on.

WestJet made an incredibly painful and problem-filled transition to a new Sabre reservation system primarily because it wanted to create codeshares and partnerships. Way back in July 2008, it announced that it would start codesharing with Southwest Airlines. This was a huge deal, because it was Southwest's first modern acknowledgment that it wanted to get into the codesharing game. Service was scheduled for 2009, but here we are in 2010 and nothing has happened.

Last year, the codeshare was put on hold, primarily because Southwest's IT systems still weren't to the point where they could handle things. At that point, they said they hoped to have something in place by the second half of 2010. Well that's only a couple months away and we still haven't heard anything. I'm skeptical.

WestJet, meanwhile, has made its transition and is ready to get going. New CEO Gregg Saretsky told the Financial Post "[Delta] has an interest. They have a capability. We like the Southwest partnership, but they've signalled to us that they're not going to be ready. We're going to move on and tee things up with another partner."

So Southwest has shot itself in the foot here. It had the right partner and it seems to have squandered the opportunity by failing to get things together in a timely manner. Does this mean that Southwest will never implement a codeshare with WestJet? No, but if there's a deal with another US carrier, that might make it less compelling and far less likely for all parties involved.

So who else might be in the running? United and Continental are clearly out of the picture since they are closely tied with Air Canada under the Star Alliance. American could be an option, but I think Delta makes the most sense. Delta can feed passengers into its many northern hubs and then send them up into Canada. It's a nice network that fits together well. And then there's the LaGuardia connection.

Remember that Delta/US Airways slot swap in Washington and New York? Well, to appease the DOT, Delta offered to sell off 15 slots in New York. Five of those will go to WestJet. I can see the room now:

Delta Dude: Hey WestJet dude, we need to divest some slots at LaGuardia and we thought you would be a perfectly non-threatening entity for us to work with. WestJet Dude: That sounds great to us. Ya know, this has been fun. We should partner on more things. Delta Dude: Hmm, how' bout a codeshare?

Airline Weekly is reporting that, in documents filed with the DOT, Delta says that the sale to WestJet is contingent upon pursuance of commercial cooperation with WestJet. That's very interesting, if true, but I can't seem to find the relevant document myself. Still, it makes some sense, even though it may cause problems for Delta.

When the DOT gave conditional approval for the slot swap, it required the airlines to divest slots to carriers with small or no presence at the airport. The carriers also had to have no codesharing relationship with Delta or US Airways. If WestJet has a relationship with Delta, the DOT may not look so kindly on the deal. They are already offering fewer slots than the DOT wanted, and 5 of those will go to a partner. That could be a complicating factor.

It's interesting to see WestJet looking toward a legacy carrier, but that's clearly the best option. JetBlue might be nice, but they really only have a strong presence on the coasts. That doesn't help with traffic flow very much. Delta makes a lot of sense, and hey, even if it doesn't work, it at least puts Southwest on the spot to get them moving.

[Photo via Flickr user gTarded]