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No more Avios or tier points from LATAM as it resigns from oneworld

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The oneworld airline alliance, of which British Airways is a key member, took a major blow last night.  LATAM, the airline which dominates flights in Latin America, announced its resignation.

The reason is that Delta Air Lines is spending $1.9 billion to acquire a 20% stake in LATAM.  It has also agreed to take 14 A350 aircraft, ten of which are yet to be delivered, off LATAM, and to pay $350m towards covering the exit costs from oneworld.

The roots of the resignation lie in the refusal by the Chilean Government to allow American Airlines, currently the US airline with the biggest operation in Latin America, and LATAM to form a revenue sharing joint venture.

LAN resigns from oneworld following Delta investment

As well acquiring 20% of the airline, Delta will form a revenue-sharing joint venture with LATAM to operate flights between North America and Latin America.  This will require full regulatory approval, which is expected to take 1-2 years, although the airlines are expected to agree a codeshare deal in the short term.  Delta will sell its minority stake in Brazil’s GOL as part of the deal.

Delta / LATAM will become the largest airline on five of the six largest routes between North and Latin America.

Interestingly, there is no word on LATAM joining the SkyTeam alliance.  Delta Air Lines has publicly stated that it sees little benefit in SkyTeam these days, although this does not fit with the strong rumours that Virgin Atlantic (49% shareholder Delta Air Lines) will soon announce that it is joining.

(Another interesting question is whether Virgin’s new Heathrow to Sao Paulo route will last long, given that LATAM flies the same route.  The two airlines could also codeshare, effectively making it a ‘two daily’ service.  The new Virgin Atlantic codeshare with GOL for connections inside Brazil, which we covered here, could be at risk, replaced with a LATAM deal.)

The official Delta press release is here.  Note that it does not explicitly mention leaving oneworld, but it is happening according to US media reports.

oneworld has not made an announcement yet (EDIT – it has now, see here, it seems they didn’t get any advance notice!) but this will clearly be a substantial blow.  We may now see Iberia extending its already impressive coverage in Latin America.

LATAM cannot leave oneworld overnight, however, so you can continue to spend Avios, and earn Avios and British Airways tier points, for some time yet.

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Comments

  1. youngtraveller says:

    O/T
    I have this offer from IHG “Stay at 2 brands and get 8,400 bonus points.” Does it have to be a paid stay or can it be a redemption?
    Thanks

  2. It’s a big change for AA and Iberia. Might be some interesting changes which is probably why no mention of joining SkyTeam…

    I suspect Iberia will continue to partner with LATAM. They already partner with both Copa and Avianca. Iberia need LATAM for South America but LATAM also need Iberia. Spain is very important for LATAM and not sure Air France/KLM will suffice.

    Qantas has said they will still partner with LATAM.

    Who will want that GOL stake? Maybe AA? Maybe Avianca after its own Brazilian disaster. If it has the funds? Maybe Avianca will switch to oneworld. It’s never sat comfortably in Star with Copa and United which acquired a stake in Azul before Avianca Brazil went bust. But it’s costly to switch.

    I wonder what Aerolineas Argentinas thinks about this? LATAM is a major competitor, although it’s domestic airline is relatively weak in Argentina

    Qatar still own 10% of LATAM?

  3. For anyone who has flown or had dealings with LATAM Airlines, they will glad to see the back of them. Awful service, awful punctuality and almost impossible to obtain refunds, changes or credits.
    Good riddance

  4. happeemonkee says:

    O/T Virgin finally confirm clubhouse at Manchester terminal 2 opening in spring 2020. Thank goodness

    https://www.businesstraveller.com/business-travel/2019/09/27/virgin-atlantic-to-open-clubhouse-at-manchester-airport/

    • Mr(s) Entitled says:

      Should really become the carrier of choice for those in the NW heading west. Hopefully they can make a few more destinations work.

  5. OT for current VA Reward+ card holders.

    How long does it take for your Reward+ card to arrive from the day of approval?

  6. I just hope QR doesn’t follow suit and leave.

  7. Does anyone know what happens when you have already booked a LATAM flight on a dat that LATAM has already officially left Oneworld? Does Oneworld protect their passengers with terms and conditions that miles and tier points are still be given if the ticket has been bought before the official day that LATAM made it clear to the bigger public that it leaves Oneworld? If not, can you cancel for free because the product has changed?

    • No and no. FFP benefits are not part of your contract (which is for travel), so you have no way of enforcing this. You’ll be aware if you read this site even occasionally that companies can and frequently do change the T&C of loyalty programmes at will. LATAM (and BA) will simply say that you can collect points in whatever new programme they implement.

      Also of course, it’s unlikely that anyone who has a booking now will be affected, as the process of extricating themselves from oneworld will take quite a long time. So you don’t even have the ‘it was there when I booked’ excuse.

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