Delta’s LATAM Investment: The 7 Losers

Filed Under: Delta, LATAM

Yesterday I wrote about the truly shocking development that Delta would buy a stake in LATAM, and as a result LATAM would cut ties with American and oneworld. This was all happening while American and LATAM were pursuing a joint venture, though they were having problems getting regulatory approval in Chile.

The extent to which this came out of left field, and the extent to which this largely reshapes the global airline industry in so many ways, can’t be understated.

In this post I wanted to take a closer look at who the “losers” are in this situation:


It sure seems like American was blindsided by this. The airline is trying to downplay the severity of what happened. American says that they understand LATAM’s decision, and that their current relationship provided less than $20 million of incremental revenue to American. That’s probably technically true, though doesn’t fully underscore the extent to which this decision is going to be negative for them.

It’s true that American and LATAM were struggling to get their joint venture approved, and they would have had so many restrictions that it would have only been marginally worthwhile.

The real loss here doesn’t come in the form of incremental revenue loss, but rather from American and oneworld going from the dominant airline and alliance in the region, to now being a distant third:

  • American has generally been scaling back operations in South America, especially to secondary markets
  • American is left without a partner airline in South America, so they have few connection opportunities beyond their major hubs there
  • It’s true that Miami is the key gateway to South America, and American is still strong there, though keep in mind that LATAM also has flights to 10 destinations from Miami, so in many ways they can compete there
  • Even Star Alliance will overtake oneworld, as Star Alliance has Avianca and Copa based in the region

It’s going to be very interesting to see how American acts going forward. I’m curious if they just sort of largely concede Latin America, or if they ramp up operations and try to compete with the Delta & LATAM partnership.

The thing is, American actually could be very competitive, given they have Miami as a key gateway. But the question is whether or not Latin America is a lucrative enough market for them as of now, or whether American management can be forced to wake up and take action on anything.


LATAM is leaving oneworld, and that’s a huge loss for the alliance. While oneworld has some awesome airlines, and while they have great recognition for elite members, oneworld will have a huge hole in their network.

In Latin America Star Alliance has Avianca and Copa, while SkyTeam at least has Aerolineas Argentinas. Oneworld will have nothing.


This might come as a surprise, but I actually think SkyTeam loses with this as well. While LATAM is leaving oneworld, there are no indications that they’re joining SkyTeam, and that’s bad news for SkyTeam.

Delta management has increasingly been talking about how they don’t see value in SkyTeam.

As Delta continues building their own global network of airlines without them joining SkyTeam, it increasingly deemphasizes the value of the alliance.


A few years ago Delta bought a stake in and formed a partnership with Brazilian airline Gol. This was an attempt for Delta to get some sort of a presence in Brazil, though obviously they’re not the ideal partner if you’re trying to build a global alliance.

It has been announced that Delta will be dropping their stake in Gol, so we can expect that that partnership will end soon as well. It seems fairly likely that American may once again pursue a partnership with them.


Alaska has a global network of partner airlines, and for years they’ve partnered with LATAM. It has been great to be able to earn and redeem Alaska Mileage Plan miles for travel on LATAM.

While nothing has been formally announced, I’d be willing to bet that Delta will force LATAM to cut ties with Alaska.

Delta and Alaska are sort of enemies at this point (they used to be frenemies), given how fiercely they’ve been competing in Seattle. So the precedent has been that as Delta gets closer to airlines, they magically cut ties with Alaska.

Savvy Consumers

I don’t want to say that consumers on the whole lose out because of this new partnership, though I do think it’s fair to say that savvy consumers will lose out.

In many ways, American and LATAM were exactly where I wanted them. I was happy their joint venture wasn’t approved, since it meant there was more competition in the marketplace.

But for savvy consumers, I ultimately do think LATAM was better where they are now than where they will be:

  • LATAM is currently in a global alliance, meaning that people from around the world can easily earn and redeem miles on them
  • The global alliances do offer a lot of consumer benefits, like lounge access, priority check-in, and more

While Delta will no doubt offer reciprocal benefits:

  • They likely won’t have nearly as many global partners
  • Delta often restricts benefits to specific circumstances/types of tickets (in other words, despite Delta’s big investment in both airlines, I doubt Virgin Atlantic elite members will get access to LATAM lounges when flying the airline domestically)

Qatar Airways

There aren’t really practical implications here, but it is still noteworthy. Qatar Airways owns a 10% stake in LATAM. Delta and Qatar Airways hate one another. Qatar Airways CEO Akbar Al Baker constantly talks about Delta, and their “granny” flight attendants, and their “sh!t aeroplanes.”

Purely in terms of ego, I can’t imagine Al Baker is all too happy that his friends in Atlanta just purchased a bigger share of the airline than Qatar owns. I’d be shocked if Al Baker wasn’t emptying out his piggy bank today to see if he can buy more, because he doesn’t want to be second place to anything compared to Mr. Bastian.

Bottom Line

Delta’s investment in LATAM is possibly the biggest airline acquisition news in the US since the merger spree we saw among US airlines (which started with Delta & Northwest and ended with Alaska & Virgin America).

This is big in so many ways — in terms of the amount spent, in terms of the implications this has for the global alliances, and in the sense that Delta literally stole LATAM from American and oneworld, and is in the process throwing Gol by the wayside.

What’s your take as to who the losers are with Delta’s investment in LATAM?

  1. As a DFW-based hub captive who has switched to Delta, this is great news. Aeromexico and LATAM will be a strong combination. (Btw, I think you mean blindsided not blind-sighted.)

  2. So many questions with this one!

    1st- Will this have to go through regulatory approval?

    2nd- Will American try and lure Gol or Aerolineas Argentinas?

    3rd- Would this mean qantas speeds up its ambitions to launch direct flights to Brazil? It currently flies to Santiago due to its connections with LATAM.

    4th- Would Aerolineas Argentinas swap over to oneworld (at least as a connect member) due to the fact that it’s partner Delta has forged a partnership with its main rival?

  3. Short point to point avios redemptions on LATAM go bye bye, too. So long aep-Igr/mdz/scl and lim-cuz for 4500-7500 avios.

    Sad day. Parker just got had. Again.

  4. The biggest loser should be Gol. They were in rally bad shape when Delta invested. Their shares were selling at less than $.50 when Delta invested and went up to $16.5 but already lost $2.00 after-hours. I don’t expect Gol to be lasting much longer without a solid partner, nor do I wish them success given their many corrupt practices.

  5. Ron and Ryan: QR and JAL are the only two airlines in Oneworld renowned for their exemplary service, despite (or rather because of) the former not having a first class (except the A380).

    What a massive blow for Oneworld. It gains Africa (specifically CMN) but loses its massive advantage in South America. The only airline it can pick up there at this point is Azul—provided it cuts ties with Star Alliance member TAP first.

  6. CX has definitely lost its shine, MH is struggling and the others (except perhaps AY) were never known for their service to begin with. However, JAL first class is among the finest in the world, and the QR Qsuite is THE best in the world, bar none.

  7. As Sean notes, you seemed to miss the largest loser of all: BAEC members. Booking shorthaul LATAM flights for 4,500-7,500 avios was a steal on many routes.

  8. @Ryan

    You are right, I forgot about JAL. Of course that’s a great airline.
    Cathay has lost it in my view, they are not even a shadow of what they were a few years back.

  9. One world will be dissolved soon. Given they aren’t that many members anyways. The flagship carriers, Cathy, AA and BA are all experiencing issues. I can see JetBlue taking over AA. Lufthansa buying out Iberia. BA will go bankrupt after brexit leaving easyJet as UK’s flagship carriers. Cathy will be taking over by Air China.

  10. Looking at flying one way between BA and Rio or São Paulo just a couple of days ago, the paid prices were shockingly astronomical. Maybe I was missing something. But there was plenty of space using Avios. I can’t see paying 500 to 800 (x2) for a one way ticket. Also, guessing this affects award tickets to Easter island? The business analysis is fine, but I’m just interested in what this means for traveling in South America on award tickets. Further articles on strategies there would be appreciated. For example, prices between Argentina and Brazil looked so high, I’m not sure I’d want to do those on same trip, which for East coast US resident makes a certain amount of sense.

  11. Qantas is major partner with LATAM and all QF feed to South America goes Via Latam.. This is in fact HUGE deal to QANTAS and Australians going East or South Americans travelling West…
    This almost deserves its own whole article

  12. “The only airline it can pick up there at this point is Azul—provided it cuts ties with Star Alliance member TAP first.”

    Given that Azul and TAP share a major shareholder (David Neeleman) and that it is the official goal at least on the Azul side to enter a JV witht the other, it’s very doubtful that will happen

  13. @Kyall totally agree with you however Qantas has been considering direct flights to Brazil from Australia as part of their Project Sunrise. Qantas might want to speed up the progress and start those flights in the next couple of years. A feeder with Gol would compliment it perfectly too.

  14. One note, Lucky. Latam does not have lounges for domestic Brazil flights so it’s not the huge loss you mention when connecting with an alliance. Lounges are Intl. only but there are also plenty of options at GRU T-3 with American Express, Priority Pass etc.

    In some ways Gol provides a more unique partnership in Brazil. They have quietly ramped up flights from Miami and Orlando to cities like Fortaleza that have long been neglected and were difficult to get to – though closer to the U.S. than GRU. This area is booming and becoming the most touristed in Brazil. And quite beautiful! Europeans have long dominated travel there (KLM, Air France, Condor, TAP) and all fly there almost daily. This could be a big benefit for One World if they join as it opens these flights up to U.S. travelers who can avoid GRU. Fortaleza also has one of the most modern airports in Brazil and is a fantastic connection spot to other cities in the North. The only downside though is the lack of a Business Class on Gol for U.S. flights. But the Premium economy is usually reasonably priced.

  15. One big question that I think @lucky has not really grappled with: how risky is Delta’s strategy long run? Delta now has big ownership stakes in a bunch of airlines scattered all over the world, as well as their own operation (one of the world’s largest). The accounting rules depend to some extent on the size of Delta’s position, etc., but if they have to mark any of these investments to market, Delta earnings could be incredibly volatile as a result of changes in the market value of these underlying airline investments.

    Basically, Delta has become a kind of airline hedge fund in addition to running its own operation. Historically foreign carriers really have not been profitable at all (even U.S. carriers have tons of historical losses; it wasn’t that long ago that all of the U.S. major airlines declared bankruptcy, wiping out equity investors completely). So Delta now as a company has a lot of exposure to the performance of foreign carriers, which is really not a segment many investors are clamoring to get more exposure to. Yes, this does give Delta a lot of control over alliance partners. But the question is, at what cost? Delta is now subject to losses whenever their alliance partners are not doing well.

    I think it’s at least an open question whether this model will be effective in the long run. If there’s a global contraction and suddenly LATAM, Korean, and Delta’s various other investments go south, Delta investors might well be pissed about these acquisitions. Delta is doing this at a time when capital is incredibly cheap (just look at how easy it was for WeWork to raise billions in private capital at a frothy $47 billion valuation, which now looks like a big mistake). Delta’s strategy hasn’t yet been tested in a downturn, and I’m not sure we should all be sitting here in wide-eyed amazement at how brilliant Delta is because this is a very risky strategy. Things could change for Delta very quickly if losses start piling up on these investments, and suddenly their famous “profit sharing” for Delta employees is reduced to zero because they have massive mark-to-market losses despite decent performance in the U.S. operation.

    Time will tell . . . .

  16. The second paragraph in this story emphasizes to the reader that the author believes this entire article to be worthless. Why would he do that?

  17. “American and oneworld going from the dominant airline and alliance in the region, to now being a distant second:”

    A OneWorld without LATAM is ahead of Star Alliance? Say what?

  18. @Kate, from my experience, paid one-way flights in South America are quite expensive (reminds me of Africa). Most times a roundtrip flight is cheaper than a one-way flight. I’ve redeemed BA Avios on LATAM in the past or Delta Skymiles on GOL if I need to fly one-ways in South America.

  19. @Lucky
    How will this affect Iberia and British, both of whom fly nonstops from Madrid or London into Santiago? Aren’t they currently in a partnership with LATAM?

  20. ironically, even though Star Alliance isn’t directly impacted by this change, I think it’s a tiny positive for them, since oneworld is significantly weakened but without the corresponding strengthening of SkyTeam

    Probably neutral for UA, as long as Avianca doesn’t deteriorate any further.

    Kudos on DL for this major scoop!! (And I’m the last person to say positive things about DL)

  21. What about Iberia? I don’t think their partnership is that close with Latam, but having an alliance / codeshare partner that dominated many of their key markets had to be a plus – and could have been one of their main advantages relative to AFKL in the Europe-Latin America market.

  22. @Lucky can you do an article on best LATAM awards to redeem via various award programmes b4 they leave One World? Thanks!

  23. Qantas may wind up a big loser here too, though they may hope to retain their codeshares outside of the alliance. That’ll be an interesting issue to watch, and could potentially lead to further declining relevance of alliances.

  24. I think passengers of other OneWorld carriers are also big losers.
    I am a frequent flyer of IB and i’m going to lose connections to all South America, biggest loss for me is Brazil.
    We can say the same about Qantas, British Airways, even the few Qatar Airways’ passengers coming from Asia to GRU and connecting on LATAM.
    Let’s see how LATAM is going to play, especially with Iberia. Madrid is a big destination for LATAM

  25. This actually helps there MIA-Latin America presence. Delta and LATAM are only a short walk from one another at MIA terminal H and J, while American and LATAM are the furthest from each other (terminal D and J) this could provide connecting traffic at MIA for both airlines

  26. Interesting interview with LATAM’s CEO (is in Spanish but use Google Translate):

    They are keeping the JV with IAG (British – Iberia) as well as the relationship with Qantas. They are leaving Oneworld at least one year from now and don’t have plans to join Skyteam.

    Other interesting tidbits about the operation and how it will work as well.

  27. It is amazing to me Parker still has a job at this point. Delta effectively out maneuvered AA to the tune of neutering both AA and OW in south america. You cant help but laugh at how thoroughly inept AA has become in its C suite. Delta has effectively shown it has no worries or cares and will kick you directly in the balls because well…..they can and it brings them joy.

    While AA is a loser for sure, even though they downplay it as you say, OW seems to be a huge loser notably Iberia/BA.

    I seem to agree with what others have stated, I wonder if OW could invest in Avianca and get it out of the gutter to save itself in the region.

  28. I would think MBA schools should start discussing AA as a great example of a wonderful domestic airline that has been run raged from poor leadership and incompetence being left without a soul or identity.

    Its amazing two people can do so much damage so quickly while still retaining their jobs. I am becoming convinced they have dirt on the board members.

  29. What’s the usual policy on already bought tickets when an airline decides to change/leave an alliance? I bought tickets on Latam for a trip in april and have my AAdvantage number on them (and really need those status miles)

  30. If Delta’s pull causes KLM/AF and Korean to leave SkyTeam and form a new alliance with Delta and Latam then why wouldn’t that mean that OneWorld could poach Aerolineas Argentinas?

  31. Yeah, I think this places OneWorld as third in South America behind Star Alliance, not ‘a distant second’. Star Alliance still has Avianca and COPA with plentiful coverage to those areas, whereas OW has nothing.

  32. AA could also face more competition from JetBlue in the near future as well, as the A321-LR and -XLR deliveries begin and B6 can open up destinations they can’t reach with their current fleet.

    (I know most people are presuming the -LRs and -XLRs will concentrate on B6’s European ambitions, but I think B6 will be looking at southern Latin American destinations that these planes will make possible as well.)

    With DL in position to compete more strongly in the network-carrier space (and UA isn’t a slouch in this area either), and JetBlue (and Spirit) likely expanding further in the point-to-point LCC/ULCC market, AA is really going to get hurt here.

  33. “OW seems to be a huge loser notably Iberia/BA”

    I’m not so sure. Firstly, alliances are becoming less and less important to airlines as JVs become the preferred way of generating profits.

    Secondly, the new game, at least in Europe, seems to be for airlines to open their own direct flights rather than rely on a hub-and-spoke model; hence we see BA with new-ish direct flights to Lima and to Santiago, and further back making Buenos Aires a direct flight rather than just a tag-on from Sao Paulo.

    Thirdly, if a flight has to have a transfer, BA wants you to use their fellow-IAG airline, Iberia, with any necessary changes in Madrid, rather than trying to channel you onto an alliance partner with a transfer in Latin America.

    Fourthly, while this blog is all about miles and points, the reality for most airlines is that the bulk of their business is from cash sales; that’s what they’re primarily interested in increasing, not maximising the opportunities for creative avgeeks to redeem miles. So the alliance is less important to them there, too. Though, having written that, I have never, ever, ever, ever been able to redeem avios for a single LATAM flight. Never. And I travel in South America quite a lot. So wearing my “I’m trying to spend avios” hat, this news will in practical terms have zero effect for me.

    Conversely, it’s good to see American’s previously over-dominant position between North and South America being challenged. They have been complacent for too long, and anything which develops another US gateway to South America — as an alternative to the hellhole that is Miami — gets my vote.

  34. My only dilemma is that my best performing stock investments of the past 3 years have been Delta and GOL. I hope that GOL doesn’t suffer financially because of this. It went down about 10% yesterday!

  35. Given the current circimumstances and the JV, this is good for DL.. But I honestly don’t think this is the best for Latam. Makes me think that LATAM must have badly needed this money and to get rid of the A350s.. Especially if they are still going to retain partnerships with IAG and QF (at least according to the CEO right now). With both MIA and MAD, OW was the best fit for Latam… Do people really think ATL and CDG/AMS are going to do magic for them? Talks of DL hub in MIA are completey insane.. Yes, DL will fly to a lot of their focus cities, mainly because many of those cities are larger and more important/relevant markets than many of their hubs!

    AF/KL/UX are already larger than IAG+Latam combined.. Will a combined AF/KL/UX/Latam JV be approved? I hope not! But at this rate, AF/KLM will throw UX in the trash in the blink of an eye, especially if they have been taking lessons from DL papa

    Poor G3 and AR… they never stood a chance.. Definitely throws a pretty bad light on SkyTeam..

  36. @ Robert skytean is Air France klm delta Aeromexico and Korean It makes no sense to form a separate alliance ? Then skyteam would cease to exist.

  37. I wonder to what extent this will impact JetBlue, and its fairly large network of flights from Boston/New York to Central and South America. As Delta has made an effort to challenge JetBlue for the Boston market, I could see them adding service to Central and South America, either through new LATAM code-shares or with new Delta flights taking advantage of the ability to connect with LATAM’s network.

  38. BA is a great looser: will have problems with connection, and pressure drom Virgin that now has a non stop to Brazil and Latams network.

  39. If I remeber correctly, once LATAM (if ever) joins SkyTeam it would be the first airline to be part of all major 3 alliance.


    While I do not think Delta will leave SkyTeam or SkyTeam will lose out on this, I do agree that in the future SkyTeam might be all about Delta and its investments. DL could possibly have a favorite child and alienate their non invested airlines, eventually the rest would just leave SkyTeam like CZ.

  40. If it was 2012 things would have been completely different. Back then there were many airlines in Latin America but over time the industry has become more consolidated especially with the merger of LAN and TAM to create LATAM.

    If al baker can’t get his grip back on LATAM then I would guess that he’ll start looking for someone else to try and get a hold of. I wouldn’t be surprised if he sets his sights on the troubled Avianca in a way to at least get some presence back on the continent (particularly in Colombia)

  41. @JAA

    Ok, I’ll bite. What percentage of BA’s current passengers are travelling to one of their LA hubs and then transferring to a LATAM flight?

    I’d guess it’s a teeny-tiny number — especially given that LA is not, and has never been, a heavy focus for the company (Iberia yes; BA, not so much).

    BA has happily competed with VS for years. I don’t see VS taking anywhere close to a majority of the traffic on *any* of the routes on which they compete. Not one. VS doesn’t strike me as a very scary competitor.

    So, please tell us: how will BA be the great loser?

  42. Two things come to my mind,

    Qantas will have now freedom to operate more flights out of chile and Brazil and much south america,

    American airlines will now have full monopoly on south american premium routes
    Avianca and united will ramp up their operations in south america,
    GOL if joined one world then qantas and AA can eat away LATAM dominance on market since LATAM being in one world keeping other one world members away from some markets/destinations,
    And Qatar relations will be better due to delta stakes in LATAM,
    Probably Etihad join one world giving delta run on south asian market,
    Delta’s LATAM investment created big strategic thinking sessions within each alliance to push and beat harder delta at any cost
    Delta will be fighting with many airlines,

  43. when will LATAM officially leave OW? If i have AA codeshares with LATAM for later this year, will AA honor the EQMs/EQDs/RDMs?

  44. Is AA ever going to be a leading airline again, or is management just going to continue being too busy remaining passive and copycatting everything that Delta does while missing opportunities to be “great” in the process? This is an absolutely ridiculous development … going from the absolute market leader in the Americas to becoming a distant follower, if that. Don’t tell us that AA could not have found some ways to make the JV with LATAM work, despite the ruling by the Chilean court. Management was so complacent … and here we go. That is so sad. AA needs a leader with a vision to pull itself out of the hole that it has dug itself!

  45. One World is also the only alliance with no member in the extremely important market of Mainland China.

  46. Since they aren’t joining Sky Team I really don’t see how this is a big game changer for all other parties except that LATAM has done a skillful job of cutting the best deal for itself.

  47. Premium awards on LATAM are so rare to begin with this probably is meaningless for anyone with Alaska miles seeking J or F.

  48. The verdict from Wall Street today: Both AAL and DAL down, but both by less than 1% and the market was down also.

  49. “ AA needs a leader with a vision to pull itself out of the hole that it has dug itself!”

    @David do you mean the hole that it has “Doug” itself? Lol

  50. You should analyze whether the Delta Investment/Partnerships have been a good deal for Virgin Atlantic, Virgin Australia, Aero Mexico, AF/KLM, Korean Air etc.

  51. “…while SkyTeam at least has Aerolineas Argentinas.” The rock on which it is built.

  52. The Chile (SCL) experiment for Qantas hasn’t worked out all that well for Qantas. It was originally intended to replace the EZE route, when Argentina went bananas with hyper-inflation making cost containment next to impossible.
    Flying aged 744’s on that route with B-class crew does not give the impression of enthusiasm. Australian passport holders into SCL are hit with a $US117 ‘recipriocity fee’ (crisp US bills only, thank you), something other South American countries abolished long ago. This unwelcoming attitude of a seemingly petulant government has not gone unnoticed or unremarked upon, and has contributed to tepid and declining interest in Chile.
    It remains to be seen whether Qantas continues with the notion of flying to Brazil (GRU?), probably dumping Chile in the process. Would be a popular option IMO.
    In the meanwhile LATAM could continue to operate it’s part-time SYD-SCL and SYD-AKL-SCL routes in partnership with Qantas. Win-win?

  53. @Glenn T
    Qantas has been considering direct flights to Brazil from Australia as part of their Ultra Long Haul ambitions. A direct Sydney-Sao Paulo flight will be around the same if not a little bit longer than their Perth to London flights so I hope Qantas is wise enough to use one of their new 787’s that are being delivered to fly direct from Sydney to Sao Paulo (perhaps from Melbourne too if possible) then perhaps forge a code share agreement with Gol for feed into other parts of Brazil. I’d like to see Gol become a oneworld connect member sometime in the future too if possible.

    It would be the wisest choice for Qantas because no other carrier flies direct to Brazil from Australia (or New Zealand for that matter). If Qantas decided to do Buenos Aires again it would be competing with Air New Zealand which already does Auckland to Buenos Aires and many non Sydney passengers prefer transiting in Auckland than Sydney.

  54. The Korean/Delta ATI approval had a stipulation that Delta could not influence/end the Alaska relationship.

    Make no mistake, this will too.

  55. @Phil
    Re your comment about Air NZ to Buenos Aires. You are spot on about not transiting through SYD (to go anywhere). It is a nightmare.
    I am currently booked ANZ in March ADL-AKL-EZE return with great connection times all round. I think a new Qantas route SYD/MEL/BNE-GRU would be popular, as already mentioned. GRU has many connections in Sth America, North America and Europe also.

  56. I’ve done both SYD-SCL and AKL-EZE. Both worked well, though I wouldn’t normally choose EZE as a transfer airport, not least because most local-ish flights (including to Montevideo) have now been shifted out of EZE to Jorge Newbery. The 1-1.5 hour taxi transfer between airports is at the mercy of Buenos Aires traffic. Which is not a stress-less experience. And Argentine immigration & customs can be good, but it often isn’t. Long queues are not unusual. And I mean *long*.

    The overwhelming advantage of SCL as the first calling point for South American traffic from Australasia is geographically obvious. Chile itself is a relatively efficient and friendly country, and the airport in Santiago (with the exception of Easter Island flights, which are a messy business managed from a hidden basement) is, in my experience, pretty decent. For long layovers the airport hotel (a new-ish Holiday Inn) is one of the world’s better airport hotels, literally opposite the terminal.

    Using GRU as the main arrival/ transfer point from Australasia makes little sense; you would have to fly over a big chunk of the continent before, in most cases, then having to fly back again over some of it. Brazil is delightful, though even if I’m being kind I wouldn’t say GRU was in the same league of efficiency as SCL…

    I don’t understand the bitching about Chile’s “reciprocity fee”: the clue is in the name, and your country imposed it first.

  57. @Glenn T let’s hope Qantas does the GRU option. And good choice with the Air New Zealand option too. Hope you have an amazing trip.

  58. ‘The real loss here doesn’t come in the form of incremental revenue loss, but rather from American and oneworld going from the dominant airline and alliance in the region, to now being a distant second’

    Others also pointed out this quote and I personally was rather flummoxed when I read it. Could you please explain why you believe OneWorld would be the second in the region even as you concede that
    ‘In Latin America Star Alliance has Avianca and Copa, while SkyTeam at least has Aerolineas Argentinas. Oneworld will have nothing.’
    Also, I don’t know why you would exclude Mexico from Latin America. So I don’t know why you left out SkyTeam founding member Aeromexico.
    And then with both *A and ST having 2 airlines in the region, I am quite curious which alliance you believe is first and which is third in the region following this decision…

  59. I think this could be a bit of an own goal.

    Avianca is disintegrating and in real trouble – Avianca Brasil has withdrawn from Star Alliance whilst United effectively control Avinanca (but can’t continue to do so because of their agreement with domestic unions in the US).

    Qatar is going to be on the warpath. Qatar also owns a 20% stake in IAG.

    IAG has traditionally been as hands-off as possible in South America – they’ll fly you there (but from London mostly you have to go via Madrid with Iberia or the USA with AA – which drives a LOT of customers to rivals) and then hand you off to LATAM. With LATAM and Delta hooking up, IAG are clearly not going to twiddle their thumbs and on top of that, with United’s effective control of Avianca it is highly likely that IAG are going to start unravelling Iberia’s current codeshares with Avianca too.

    BA is flush with cash and hunting for slots at Heathrow and Gatwick. Expect to see BA rolling out several new direct routes from London to previously terminated destinations in South America (to Bogota etc).

    I’d also expect to see Qatar and IAG teaming up in South America – quite possibly targetting both GOL and Avianca Brasil’s slots as a jumping board.

  60. “AA will just sort of largely concede Latin America.”

    Sorry, Lucky, but that comment takes the cake as the dumbest commentary on the LATAM surprise. AA will FEROCIOUSLY defend its Latin turf with LATAM gone. And while nobody can predict the future, the odds are strongly in their favor. Just like Alaska’s odds were strongly in their favor when Delta showed up in Seattle. There is no airline to Latin America that can effectively compete against AA’s Miami hub. LATAM can’t — they don’t really make any money. It is almost certain that AA will use LATAM’s departure as an excuse to expand service — at least if/when the struggling South American economies improve. Delta will certainly gain (a very expensive) foothold in the region and, if they play their cards right, perhaps they can eventually recoup some of their huge capital investment in LATAM. But the idea that AA will somehow be fading away in Latin America is just foolish.

  61. @JAA, LATAM Chairman has already said he wants to keep the JV with IAG (BA and Iberia). Given that the Chilean Supreme Court ruling on the proposed JV with AA revolves around concern that competition would be reduced on the routes to Miami and Madrid in particular (as reported by Matt at Live and Let’s Fly), it May well be they effectively have to keep their relationship with IAG in place in order to get the proposed Delta JV approved by the court in future.

    What this does is make the alliances look quite irrelevant all of a sudden. From the perspective of a BA frequent flyer (which I am), the network of JVs and cross-ownerships that IAG maintains with AA, QR, LATAM and Cathay would probably leave the passenger/booking experience largely unchanged even if Oneworld itself were to dissolve tomorrow.

    The big loser here is AA, which has once again been painted into a corner by Delta, just as when they stupidly cut their codeshares with QR and EY.

  62. Is it me, or are we still pretending JetBlue Azul aren’t actually United’s, but are actually BA AA’s ace in the hole.

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