LATAM Leaving Oneworld On May 1, 2020, Earlier Than Expected

Filed Under: LATAM, oneworld

In late September 2019, one of the biggest “deals” we’ve seen in the airline industry in a long time happened, as Delta purchased a 20% stake in LATAM.

Basics Of The Delta & LATAM Deal

LATAM has been in oneworld for years, and had a close partnership with American. The two airlines had been pursuing a joint venture between the US and South America, but were facing issues with getting regulatory approval, particularly in Chile.

Meanwhile, Delta has been focused on a strategy of global dominance by investing in airlines and forming joint ventures with them. One area where Delta has long been weak is in South America, so they swooped in out of nowhere and bought a 20% stake in LATAM.

This is a huge blow to American, and a huge win for Delta, as in many ways this completes their global investment strategy (perhaps with the exception of Africa).

This LATAM deal is huge news for American & Delta

LATAM Now Leaving Oneworld As Of May 1, 2020

Last November it was announced that LATAM would be leaving oneworld as of October 1, 2020. That’s because contractually airlines have to give one year notice of leaving oneworld. However, we’ve known all along that they would try to leave the alliance earlier, and it looks like that is in fact happening.

LATAM will be exiting the oneworld alliance as of May 1, 2020, which is five months earlier than expected. On the plus side, they will continue to honor mileage accumulation for tickets flown within 12 months of May 1, 2020, assuming they were purchased by that date.

LATAM will be maintaining bilateral agreements with a majority of oneworld member airlines, including British Airways, Cathay Pacific, Finnair, Iberia, Japan Airlines, Malaysia Airlines, Qantas, Qatar Airways, Royal Jordanian, S7 Airlines, and SriLankan Airlines.

For customers on those airlines, they’ll continue to offer the following bilateral perks:

  • Earn and redeem frequent flyer miles via respective loyalty programs
  • Reciprocal lounge access, subject to final agreement with individual carriers
  • Top tier recognition in respective frequent flyer programs, subject to final agreement with individual carriers

Obviously the key here is that LATAM is no longer partnering with American, as they instead partner with Delta. As of today LATAM is ending their codeshare agreement with American and starting their codeshare agreement with Delta.


LATAM will be leaving oneworld on May 1, 2020

Will LATAM Join SkyTeam?

As of now it looks like there are no plans for LATAM to join SkyTeam. While Delta belongs to SkyTeam, they’ve long been deemphasizing the importance of the global alliances, rather focusing on reciprocal agreements with airlines.

There are currently no plans for LATAM to join SkyTeam, just as there are no plans for Virgin Atlantic, Virgin Australia, and WestJet to join SkyTeam, despite their close partnerships with Delta.

Delta owns a stake in Virgin Atlantic, but isn’t in SkyTeam

Bottom Line

LATAM will be leaving the oneworld alliance on May 1, 2020, which sure is a bummer for many oneworld flyers. Up until that point oneworld flyers can earn and redeem miles for travel on LATAM, and also take advantage of reciprocal benefits, like lounge access, priority boarding, etc.

As of May, LATAM will likely be without an alliance, as they instead focus on select bilateral agreements, including a new partnership with Delta.

I do wonder how much LATAM had to pay to get out of this agreement early.

Comments
  1. they are the worst at releasing any award space anyway (even economy) to AA, BA, and other oneworld partners, so i likely won’t notice the difference…

  2. I think LATAM will join Skyteam or some other form of partnership. The difference between the airlines you mention and Latam is that they have a well established partner network. Since Latam is leaving Oneworld, Latam loses this network. So I do think that there will be some kind of partnership with Skyeam, and I think Skyteam needs it desperately since they lost Air Europa.

    I also think that it will be possible to have Skyteam Elite benefits at Latam and even earn miles, but that’s my take on it.

  3. Lucky do you know if i redeem latam miles in one world partners before oct 1 can book flight for dates after oct 1???

    Or just can redeem the miles in one world partners with dates of flights untill oct 1, 2020?

  4. I would actually like to see an article talking about why majors airlines are moving away from global alliances. I get that forming one’s own partner network will let the leading airline have more say, but is that all? Any analysis on why being part of an alliance could be too much of a burden?

  5. That photo caption is wrong: Delta owns a stake in Virgin Atlantic, but isn’t in SkyTeam.

    It implies that Delta is not in SkyTeam!

    Expecting a similar announcement for Air Europa leaving SkyTeam within a few months.

  6. It’s incredible how a global airline like LATAM will be left without an alliance, Delta must understand that not everyone is a member of Skymiles and that many people use other frequent traveler programs that depend on the global alliances for benefits and redemption.

  7. @ Grant – Going by past history, Alaska recently lost Aeromexico, KLM and Air France as MP partners. Although nothing official has been released, I would guess that Latam would be next to exit MP. That said, MP still has Korean Airlines on board.

  8. There’s a few things unique about the KE partnership in line with the fact that DL did not have the kind of leverage on KE that they had on other airlines to form a JV….in fact initially DL asked KE to form a JV and KE said no.

  9. “Meanwhile Delta has been focused on a strategy of global dominance by investing in airlines and forming joint ventures with them.”

    The ME3 should be taking notes…

  10. Any folks know why/how airlines like Sri Lanka and Jordanian manage to remain in oneworld given the massive coverage/presence of other oneworld carriers (Qatar, BA) in their respective geographies?

  11. And Air France KLM own 31% of virgin and yet they are still not in skyteam I suspect LATAM may also forge a partnership with Air France KLM

  12. Given Delta’s CEO’s statements about disappointment with Skyteam, Delta is more focused on building an alliance of carriers that achieve Delta’s goals rather than a group of carriers that serve and are connected to each other. All alliances have huge variances in service quality and investment or lack thereof in alliance platforms and policies and Delta and Latam are both comfortable working outside of an alliance structure. Delta’s investment in Latam will create the product unity that Delta wants.
    Given that Delta has the cash to pick off carriers that are currently alliance-affiliated, and also can lose some like China Southern, there are more extensive commercial relationships than just with Delta and there are likely contracts that make undoing all of that to follow new alliances unlikely.
    Even some of Delta’s closest partners, including Air France/KLM and Virgin Atlantic will be retaining their relationship with Gol and some of those relationships were recently signed or expanded, indicating how secretive the Delta-Latam talks were. Delta-Latam simply steps Delta up to a much larger role in Latin America while Gol still will help Delta’s Euro partners achieve what they need in Brazil.

    The value of a joint venture with Delta is more meaningful to Latam than an alliance membership – and each carrier has to value all of those pieces independently.

    @Laurel,
    Korean never left Skyteam and they didn’t form or try to form stronger relationships with any other carrier which lends credibility to the suggestions that Delta and Korean simply couldn’t come to terms about what “joint” meant until enough in the world around them changed to make it worth their while to accommodate each other – and that very likely went both ways.

  13. Latan is the worst airline to be keeping one mileage program. I think they already moved 5 times.

  14. I wonder how Aerolinas Argentina’s would be feeling now that their long time rival is forging a partnership with its main US partner. Could AA or IAG entice them to join oneworld perhaps? Or could the LCC Sky Airlines in Chile be an alternative partner for oneworld carriers? Or with the Air Europa acquisition from IAG could they use that as a springboard to launch intra Latin American flights?

  15. @Lucky: On what grounds do you expect that a relationship with BA will continue? There is already the absolute minimum relationship, based on Oneworld membership. I’m not aware of any relevant code share with BA, and even IB codehares are usually only bookable at top level fare clases (J, Y). So the only relationship are OW-Benefits, such as lounge accesss.

    Given the strong position of IB (and less so of BA, but still some presence exists) in the Latin American market, I would expect absolutely no relationship to continue. I would rather expect that IB/AA (which have some strength in Latin America) will seek to improve their ties with non alliance carriers (most obviously GOL, Interjet, perhaps Sky, Tame) or even selected alliance carriers (in particular Avianca). For us travellers, this is good news in respect of GOL, Interjet and Avianca – which are all solid in terms of service – perhaps less so the others ….

  16. It’s gonna be interesting to watch if LA is gonna keep playing with BA (because of QR’s stake in IAG) or with VS (as a member of “Delta Alliance”).

  17. Alliances do not go nearly as far as JVs. Delta is a founding member of SkyTeam and I would be interested to understand the comparative difference in the economics of being part of an alliance for a major network carrier and a regional/national airline as opposed to revenue sharing, coordination, etc of a JV. Bastian’s disappointment with SkyTeam suggest that there is more value in JV. To extent readers of this blog or Lucky have some data, I would appreciate the insight that supports this rationale?

  18. The most stupid decision in aviation this decade – clearly, a precursor to the downfall of LATAM. They just gave up the two most important partners that any Latin American carrier would aspire – IB and AA.

    LATAM joining SkyTeam would be a joke. Three quarters of SkyTeam members will be of no use to them (well, not that they are of any use to the existing members either :-P). Most likely, all the peripheral carriers in SkyTeam will leave once their contracts expire and then perhaps the founding members can welcome LATAM!

  19. LATAM has lost my respect and friends’. After adding Multiplus as their mileage administrator they have devaluated their value and when you call their 1-800 number nobody seems to be properly informed. Maybe with Delta their employees will be properly trained

  20. @Kannan LATAM was running out of money. They numbers were going bad. They were desperate for money and Delta saw the opportunity and they took it.
    In a few years LATAM will dissaper or will be under Delta’s full (100%) control.
    I’m getting rid of my LATAM miles as soon as I can

  21. LATAM is a terrible, 1-star airline for FQTVs. Their program and award redemption costs are the worst in the market. Delta is the same. They deserve each other.

    Hopefully AA/IB buys Avianca (who is desperate for cash), get them into Oneworld and erase LATAM from the map.

  22. We booked cash tickets in November 2019 to fly LATAM J Class to Guayaquil, Ecuador in August 2020 and was going to credit to BA Avios. The way I’m reading this update sounds like we should still earn BA miles for our August flight, no?

  23. I booked cash tickets to fly LATAM to LAX in July 2020 and was going to credit to AA advantage. Anyone know if I’ll be able to?

  24. Just wondering, what is the exact reason LATAM would want to leave Oneworld earlier than normal? Is it not possible for them to maintain an agreement with Delta while cutting ties with AA without leaving? Or is it just pressure to leave?

  25. This means Oneworld will be a six-continent alliance for exactly a month! RAM joins on 31 March and LATAM leaves on 1 May.

  26. It appears wise that I scheduled my last Latam flight on April 8, i.e. before they leave Oneworld. Being a European, often traveling to South America but rarely to the US, Delta is no option at all.

    So that leaves me with Avianca (which is decent), Aerolineas (which at least is SkyTeam) and Gol (which at least partners with AF/KL).

  27. One of the bigger shames, IMO, is that AA will lose access to the VIP lounge at SCL. They shut down the admirals club there last year and have been using the LATAM lounge instead. After May 1st they won’t have anything for their premium travelers in Santiago.

  28. My spouse is from Chile and the alliance between American/Oneworld and LATAM has been a big plus for us as it allowed us a greater range of flights from our home base in LA down to Chile and throughout South American, extension of my elite status benefits within those South American airports, easy access and transition to LATAM flights and LATAM surpasses within Chile and South America and use of the LATAM lounges. All of these benefits will be missed.

    I understand that to offset some of these losses, American is increasing its own flights down to South America, which is good, especially since during the last few years, the new American planes being flown had business class (and sometimes first class) seating that were better than LATAM’s aging seats, but LATAM’s coach was superior to Americans.

    What is left to be seen is to what extent American will develop Admiral’s clubs or enter into arrangements with other lounges throughout South America once access to LATAM’s lounges is lost.

  29. Can you please contact AA for any possible exceptions for tickets booked prior to Sept 28 2019? It is highly unusual circumstances that I booked and ticketed a one world ticket back in July 2019 and can’t earn at all on AA. The travel date is May and June. Delta and AA are fighting, yes but we are the victims.

  30. @marilynchu yes you will be able to still credit to AA. Any tickets purchased before May 1st 2020 you can credit to AA

  31. Latam is one terrible airline company.
    Have a problem with them, don’t bother to contact customer service.
    Even contacting top management up to the CEO, waste of your time.

    Needs an uprooting and entire new management.

  32. So, yesterday I flew what I imagine will be one of my final flights on LATAM. Even though I fly back and forth to GRU all year. The only reason I have bothered with their business class is because of One World. As @Anthony says the company is, otherwise, pretty bad.

    Yes, the new business is solid as a hard product. (FYI, for those flying it soon Row 8 Bulkhead seats in the rear mini cabin are the bomb…it has a much bigger footprint than the others.) But everything else is amateur at best.

    I have a routine on LATAM to always ask for a champagne to be brought prior to lunch. This because LATAM does not serve pre-dining drinks but rather simply lays down your entire lunch on a tray an hour after take off and then asks for your drink order…much like economy. The only airline I fly in the world that does this in business that I know of. But, those who know request a drink before and it’s normally fine.

    Yesterday, the F/A never brought my champagne. She started delivering the meals and I politely reminded her that I had asked for a glass of Champagne prior to eating. She looked at me and huffed away yelling for others to hear that, “We are not a bar and you should get over yourself.”

    I was pretty blown away – but this is becoming more and more the attitude of both airport staff and flight crews. Honestly, it makes American look good in comparison.

    I am fine with LATAM leaving. Though I hate trudging to Campinas I might start mixing in Azul to FLL and also using AA premium economy from GRU in hopes of using SWU’s to upgrade to business. AA business is unfortunately astronomical to purchase vs. LATAM but at least it has a solid Premium Economy as a fallback when upgrades don’t clear.

    Good luck with LATAM, Delta. You will need it.

  33. @stuart have seen good AA Business fares originating from GRU to BOS. Obviously if your not based in GRU can be a challenge but if you can make it work and your consistently going back and forth it’s a good option

  34. @Brandinho1. Interesting. Never knew that hack and will check it out for sure. I do some originating tickets from GRU so it might work.

  35. Wouldn’t it be COOL for JAL to drop out of Oneworld and link up with DL now that they will be the largest US carrier at HND and AA has very little service. AA is a severely declining brand while Delta has gotten better and more profitable.

  36. We’ve booked SCL-CJC-SCL-ASU-SCL-MDZ-SCL for September this year.

    We’re both Emerald through BA. Any thoughts on lounge access and the like?

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