Delta has bought a 20% stake in South American powerhouse LATAM.
LATAM is the merger creation of OneWorld’s LAN and Star Alliance’s TAM. One of my favorite mileage redemptions of all time was using 500,000 USAirways miles to buy out the entire TAM first class cabin from Miami-Sao Paulo and back for my family some 5 years ago.
American had been seeking a joint venture with LATAM, but that is now off the table as Delta is scooping up a major new partner. American is playing down the loss, but it’s still a big hole that now exists in their network.
This follows Delta’s strategy of investing in foreign carriers that they want to partner closely with, such as Aeromexico, Virgin Atlantic, and Korean.
As part of the deal, Delta will take over LATAM’s commitment to buy 10 more A350s.
LATAM will leave the OneWorld Alliance and presumably look to join the SkyTeam Alliance. American and OneWorld have traditionally been the strongest in South America, but this is a market that Delta clearly sees as one worth investing in. United has a strong South American presence between Avianca, Azul, and Copa.
It’s a loss for mileage junkies as using BA Avios were a great value on LATAM’s flights in South America. A flight from Sao Paulo to Igassu Falls or Rio de Janeiro or from Lima to Cusco is just 6K Avios.
LATAM also operates the only nonstop service between South America and Tel Aviv.
Delta owns 9% of Brazilian airline, GOL, and will divest of that stake. Perhaps American will bring them into OneWorld?