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.
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.
How to earn Avios from UK credit cards (February 2023)
As a reminder, there are various ways of earning Avios points from UK credit cards. Many cards also have generous sign-up bonuses!
In February 2022, Barclaycard launched two exciting new Barclaycard Avios Mastercard cards with a bonus of up to 25,000 Avios. You can apply here.
You qualify for the bonus on these cards even if you have a British Airways American Express card:
There are two official British Airways American Express cards with attractive sign-up bonuses:
SPECIAL OFFER: Until 21st February 2023, the sign-up bonus on the British Airways Premium Plus American Express card is increased to 35,000 Avios from 25,000 Avios. You can apply here.
You can also get generous sign-up bonuses by applying for American Express cards which earn Membership Rewards points.
Run your own business?
We recommend Capital On Tap for limited companies. You earn 1 Avios per £1 which is impressive for a Visa card, along with a sign-up bonus worth 10,500 Avios.
You should also consider the British Airways Accelerating Business credit card. This is open to sole traders as well as limited companies and has a 30,000 Avios sign-up bonus.
There are also generous bonuses on the two American Express Business cards, with the points converting at 1:1 into Avios. These cards are open to sole traders as well as limited companies.
Click here to read our detailed summary of all UK credit cards which earn Avios. This includes both personal and small business cards.