LATAM Will Leave OneWorld After Delta Buys 20% Stake In The Airline

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Brian Bukowski [CC BY-SA 2.0], via Wikimedia Commons
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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?

HT: Something Fishy, via DDF

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13 Comments On "LATAM Will Leave OneWorld After Delta Buys 20% Stake In The Airline"

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Dan

Dan- can u comment on what happened with the Chilean Supreme Court

Usernamechuck

What happens to existing reservations? Can we still book?

Pepe

I guess I’ll need to burn my 100k Latam miles dinner rather than later

Eli

Why?

Pepa Mujica

Right now 43500 miles gives you a South America to US roundtrip.
I’m guessing that will cost at least 80K skypesos very soon

shmully

was us airways was part of star alliance when you bought out the tam first class?

1991

Any suggestions,
Best way to travel to sao paulo on high season?
What would be the best milage program?

rob

You might be surprised to find out i’m not the foremost authority on Chilean law that I present myself to be

So I’ll go ahead and ask a glaring question….

How did the AA JV not pass muster with the Chilean legal system, but Delta outright buying a large stake in the airline does?

E

Pure conjecture, but as Dan mentions Delta doesn’t have much of a footprint there while AA has major presence through Miami and even DFW.

Bob

I had the same question about how this will pass muster with the Chilean courts, but the AA deal probably failed because it also included BA and Iberia — two additional airlines that already have substantial presence there. Chile, with 18 million people, is not a market to be overlooked, but Delta and LatAm can tell them to go eat empanadas and just fly their planes to Brazil, population 210 million, and Argentina, 45 million, if they give them any grief.

David-in-Florida

The head of LATAM stated in an interview in Spanish that LATAM would be leaving OneWorld and will not be joining the SkyTeam alliance. Perhaps this is why a week or so ago that alliances are not important anymore.

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