Southwest Airlines Co., the largest U.S. discounter, and Canada's WestJet Airlines Ltd. have agreed to form an alliance by late 2009, giving the carriers access to routes outside their home markets.

Southwest, which only flies in the lower 48 states, would be able to book customers on WestJet flights to Hawai'i, Mexico and the Caribbean and for ski trips in Canada through Calgary or Vancouver.

The deal also helps WestJet expand in the U.S.

WestJet rose the most in more than three years in Toronto trading.

"This gives WestJet exactly what they need in terms of growing their trans-border flights," said Chris Murray, an analyst at CIBC World Markets in Toronto, who rates WestJet "market outperform."

"The deal would make sense for Southwest to build its service into Canada, too."

The airlines aren't yet ready to announce routes, schedules or fares, Dallas-based Southwest said.

Certain details of the agreement must be approved by the U.S. and Canadian governments, the airlines said.

Travelers will be able to purchase seats on WestJet flights through Southwest's Web site before the codeshare agreement takes effect.

Southwest has said it should finish updating its computer systems next year to allow for international travel. The company has been searching for an alliance partner to replace defunct ATA Airlines Inc., which had given Southwest passengers access to Hawai'i.

"We are quickly moving forward with our plans to enter the international markets with WestJet," Southwest chief executive Gary Kelly said in a statement.

WestJet flies to holiday destinations in the Bahamas, Barbados, Dominican Republic, Hawai'i, Jamaica, Mexico and St. Lucia. Its continental U.S. routes include Newark, N.J., and vacation cities such as Las Vegas, Phoenix and Orlando, Fla.

"This is a defining moment for WestJet," CEO Sean Durfy said in the company's statement. "We are delivering on our strategic plan with this announcement today."

WestJet, which began flying in 1996 and was founded on Southwest's no-frills model, offers a single economy-class cabin on all its flights.