http://www.reuters.com/article/rbssIndustryMaterialsUtilitiesNews/idUSBNG49= 051220090525 UPDATE 2-Southwest delays code-share tie-up with WestJet Mon May 25, 2009 12:46pm EDT By Nicole Mordant VANCOUVER, British Columbia, May 25 (Reuters) - A planned code-share partnership between low-cost carriers WestJet Airlines Ltd and Southwest Airlines Co will be delayed because of a sharp slowdown in air travel, WestJet, Canada's No. 2 airline, said in a surprise announcement on Monday. WestJet said U.S.-based Southwest has decided to put the funds earmarked for the code-share program to other, unnamed, uses in the current slow sales environment. The code-share program, which was announced in July last year and was expected to be operating by the end of 2009, would have seen the two airlines selling seats on each other's flights. This would have meant cheaper and easier access to new customers for each carrier. Shares in both airlines were slightly weaker at midday on Monday. WestJet's stock was down 30 Canadian cents at C$12.18 on the Toronto Stock Exchange. In New York, Southwest's stock was 6 cents lower at $6.70. "We are kind of disappointed but it's not a big deal," said Research Capital analyst Jacques Kavafian, who researches WestJet's stock. "The revenue potential from this was not great and so it is not a big loss," he told Reuters. He noted that the tie-up was delayed, not canceled. Bob Jordan, Southwest's executive vice-president of strategy and planning, said in the statement that Southwest remained "absolutely committed" to its partnership with WestJet and to code-sharing in general. The two airlines have already implemented a distribution agreement and are close to starting a cargo program. The codeshare agreement with Southwest was WestJet's first such deal. In February, it said it had agreed to study a code-sharing alliance with Air France-KLM. WestJet also said on Monday that implementation of its Sabre reservation system, which is key to code-sharing, is continuing on track. It will be ready for launch in the fourth quarter, the company said. Earlier this month, WestJet posted a smaller than expected drop in first quarter earnings and said it expects to emerge stronger from the global slowdown in air travel. It is one of only a few profitable airlines in North America. ($1=3D$1.12 Canadian) (Additional reporting by Isheeta Sanghi in Bangalore; editing by Peter Galloway) =A9 Thomson Reuters 2009 All rights reserved <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> If you wish to unsubscribe from the AIRLINE List, please send an E-mail to: "listserv@xxxxxxxxxxxxxxxxx". Within the body of the text, only write the following:"SIGNOFF AIRLINE".