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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.

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 (85)

This article is closed to new comments. Feel free to ask your question in the HfP forums.

  • Neil Donoghue says:

    Goodbye cheap tier point runs from FRA – MAD. Goodbye receiving full tier points for Avios redemption’s on LATAM and finally goodbye to my annual trip to Bora Bora via Easter Island. This is a huge blow for me personally…..Absolutely gutted!

    • BJ says:

      Looking on the bright side, you at least got to take advantage of it while many others, like me, have let the opportunities slip through our fingers.

    • John G says:

      You can still fly them. They have not gone out of business! Why stop doing something you enjoy because you can no longer earn loyalty points?

      After many many years of playing the points/status game I stopped last year and started flying the airline that suited me most for each individual trip rather than thinking about what would earn the most Avios. The result was a lot of money saved and a much happier experience flying airlines I’d previously deemed off limits as a wasted earning opportunity.

      • BJ says:

        The opportunity I was thinking of was to travel there at relatively low cost on flexible tickets which is important to me. On the plus side we have seen some very attractive cash fares into Brazil this year s so that opens up new avenues, and there is also the possibility to go via USA as I have done in the past.

        • marcw says:

          You can still do it! Just not with Avios – LATAM (it’s not possible anyways, since there’s literally no availability with Avios to PPT in the next whole year). Rather than transferring your MR points to BAEC, there’s Flying Blue as well. Air France flies thrice a week from LAX to PPT.

      • Neil Donoghue says:

        As someone who takes over 50 flights a year, I completely understand your point of view! I am still partial to a Ryanair or Easyjet flight however as BJ mentions, there is a lot to be said about having the ability to book reward flights which offer incredible flexibility. I also value my BA gold status and find the perks beneficial – It’s just different strokes for different folks….Looks like return flights to AKL for future trips with Qatar and then hop up to Bora Bora using AA points.

        • Prins Polo says:

          There’s also the biweekly Tokyo to Tahiti flight on Air Tahiti Nui which is bookable with AA miles (and with 40k plus around $30 in taxes in J is an excellent value).

    • Marcw says:

      Now there’s literally ZERO availability in the Scl-Ppt sector. Some in the opposite direction.

      Remember you should be able to spend Flying Blue miles from LAX to PPT on Air France as well. Or you buy £600 from LAX/SFO to PPT, in economy though.

      • Neil Donoghue says:

        Common misconception! Availability has always been there, it just doesn’t show on the BA site. Try calling an agent and it’s like magic 🙂

  • Steve says:

    So what did Delta do that American Airlines didn’t to be allowed to form a revenue sharing JV with LATAM?

    • Shoestring says:

      [This will require full regulatory approval, which is expected to take 1-2 years]

    • Rob says:

      All about market share. AA was too big in LATAM already.

    • Stu N says:

      The article says Delta have a smaller share of the market in South America.

      Say LATAM have 25%, of the market AA have 30% and Delta only have 10% (made up numbers for illustration), the regulators are going to be more relaxed about Delta plus LATAM = 35% than AA plus LATAM = 55%.

  • Ian M says:

    Very disappointing, I’ve used Avios many times with Latam. I also have a cash booking Latam flight in November which I need the tier points from go renew status. Any idea when we’ll stop earning avios and tier points from them?

    • Alex Sm says:

      Apparently it’s one year notice period, so should be quite generous and smooth transition

  • Nick says:

    “We may now see IB expanding”

    Or we may not. You’ll be aware of course that IB and LA have a shared joint deal into Peru and Ecuador, so these routes are now at risk. And without LA for behind and beyond support it’s hard to see how more direct flights can be justified. They will be upset though, that’s for sure.

  • Spaghetti Town says:

    Will LATAM passengers switch to using the Virgin club house at LHR moving forward?

    • Rob says:

      If São Paulo becomes a codeshare then yes. Not sure about Santiago.

    • Catalan says:

      Oh no, please. Not more passengers with entitlement to use the Clubhouse Lounge. Delta Airlines’ folks are already making it overcrowded, and spoiling it!

      • Lady Lonodn says:

        TBH I think without support from Delta I can’t see Virgin maintaining their “young, hip” image much longer. Virgin seems to be increasingly rolled in with Delta calling the shots.

  • apbj says:

    Ouch! Oneworld is already the flimsiest alliance (Qatar, Qantas and Cathay all seem to have their minds elsewhere) and this surely seals the deal.

    • Lady London says:

      Not to mention BA going its own way on things like ceasing check-through of luggage when originally codeshares and marketing agreements and alliances were sold to public and regulators as contributing positively to customer experience.

  • BrightonChris says:

    So VS joing Skyteam is now only a ‘string rumours’ ?

    Last week you were 100% certain when you posted

    “Virgin will be in Skyteam very soon so no problem using the miles. World exclusive there!”

    https://headforpoints.com/2019/09/18/virgin-cards-new-offer/comment-page-1/#comment-386350

    • Spaghetti Town says:

      Would be the next logical step really.

      Good news so this will hopefully give BA/AA a run for their money and drive down fares to South America. IAG have had it too good for too long with it’s multiple tie ups.

    • Rob says:

      Not sure if you have realised yet, but HFP is basically two separate sites – what is above the line, to which I am held to account, and what is below the line where we can say different things to a more limited audience.

      • TripRep says:

        Rob really?

        So we should dismiss all your comments on articles as pure unreliable speculation.?

        • Rob says:

          No, you’re confused. I can say things in the comments which I cannot say in the articles, because the articles only cover official news and not nods and winks.

      • Obi says:

        LMAO you sound like a Tory party spokesperson (and BTW that’s not a good thing)

      • BrightonChris says:

        Really? As my dad would say ‘what a load of guff’.

        You really can get away with that position.

        You are responsible for whatever you write – whether in reply to a comment or in the main article.

        People rely – and make decisions – on what you say wherever on the site you say it.

        Your comment that I linked to was used to support on flyertalk VS board that VS was joining skyteam was 100% happening.

        So people take what you write with a good deal of reliability so you can’t pick and chose where you write it. If you write it anywhere on HfP then people take it as gospel.

        • Rob says:

          You missed my point.

          You can always assume anything I write below the line is true to the best of my knowledge. I cannot necessarily say these things above the line in the same firm terms however.

          Clearly no-one at VS has told me in writing, with a ‘for publication’ statement at the top, that they are joining. I need that level of proof to say it in an article.

          • BrightonChris says:

            The point is that based on that we can’t trust amything you write anymore

            Just because it’s ‘below the line’ DOES NOT abrogate you from providing ACCURATE information.

            If you can’t say it in an article then DO NOT post it as a comment because people rely on what you say – whereever you say it – as being accurate and whether you like it or not make decisions based on what you write.

            Pretty simple really.

          • Rob says:

            You still miss the point.

            I can say stuff in the comments which I know is true but is still secret. I cannot say such things openly in articles but may allude to them.

  • Rebecca says:

    That’s a shame. I got almost enough tier points to renew my silver status going to Peru this year. And saved £300 flying internally by using avios. The business class seat was considerably more comfortable than BA and flying with LATAM in business was cheaper than flying in PE with BA!

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