WestJet Airlines Ltd and American Airlines cemented closer ties on Monday, signing a code-share agreement that is designed to boost passengers on the Canadian and U.S. carriers.

The deal allows WestJet, Canada's second biggest airline, and American, a unit of AMR Corp , to put their airline codes on each others' flights so passengers can more easily book connecting flights through one carrier.

Code-share agreements are especially important for attracting business travelers who demand easy connections to many destinations.

WestJet, which has strayed somewhat from its low-budget airline roots as it looks for avenues to boost revenue, is increasingly targeting the business travel segment, until now dominated by its bigger domestic rival Air Canada .

American customers will now be able to connect more easily on WestJet's network to 20 Canadian cities that are not currently served by American or its regional partner American Eagle.

WestJet passengers will be able to connect more easily with American flights from Canada, although this will only apply on flights to Chicago and Boston initially. The agreement is expected to be expanded to the rest of American's network in the near future, the airlines said.

The code-share pact comes after WestJet and American signed an interline agreement last October that allowed easier transfers between flights.

WestJet's stock was up 21 Canadian cents, or 1.4 percent, at C$15.02 on the Toronto Stock Exchange on Monday morning. AMR was up 6 cents, or 0.9 percent, at $6.70 in New York.

(Reporting by Nicole Mordant; editing by Rob Wilson)