Southwest Airlines to offer flights to Canada

The Canadian airline would actually do the cross-border flying, but Southwest would be able to sell the tickets and share the revenue.

Southwest and WestJet Airlines Ltd. said they agreed to strike a so-called code-sharing agreement and planned to announce schedules and other features of the deal by late next year.

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

"This is a big step. It's very exciting to add additional destinations to the Southwest route map," Chairman and Chief Executive Gary Kelly said in an interview.

Kelly said Southwest is talking to "close to a dozen" other carriers about similar deals to connect its customers to Hawaii, Mexico and the Caribbean by late 2009, and Europe and beyond in later years. He said such code-sharing agreements could bring in several hundred million dollars per year, a big chunk of the airline's goal of increasing annual revenue by $1.5 billion.

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

The partnership announced Tuesday would let WestJet compete with bigger Air Canada for Canadians traveling to the United States. WestJet flies to 12 U.S. cities, including Los Angeles, Phoenix and Las Vegas--all served by Southwest. Southwest would also like WestJet to add service to other cities such as Denver, Baltimore and Chicago.

The number of Americans booking a Southwest-WestJet itinerary to Canada probably would be smaller but could help fill empty seats on Southwest connecting flights, Kelly said.

Southwest has no plans to fly into Canada. And although WestJet flies to Mexico, Jamaica and other sunny vacation spots, Kelly said Southwest was negotiating with other carriers for code-sharing to those locations.