LATAM Leaving Oneworld On October 1, 2020

Filed Under: LATAM

In late September 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 has 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 Leaving Oneworld As Of October 1, 2020

While LATAM directly hasn’t made an announcement (as far as I know), it looks like we now know when LATAM is leaving oneworld. Per the Qantas website, LATAM will be exiting the oneworld alliance as of October 1, 2020.

That’s roughly the timeline I was expecting, since it’s my understanding that airlines need to give notice of leaving an alliance, and October 1 is just over a year after the initial announcement was made.

Note that LATAM is likely to maintain relationships with some oneworld airlines, though presumably with scaled back mileage earning rates and benefits. For example, it’s expected that a partnership between British Airways and LATAM will continue in some form.


LATAM will be leaving oneworld on October 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.

So 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

It looks like we can expect that LATAM will continue to be in oneworld through October 1, 2020, allowing oneworld flyers to earn and redeem miles for travel on them, and also take advantage of reciprocal benefits, like lounge access, priority boarding, etc.

At that point LATAM will likely be without an alliance, and I suspect the focus will be on reciprocal benefits between them and Delta.

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

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