LATAM to leave the Oneworld alliance, but will it join SkyTeam?

It's adiós to Oneworld with Chilean airline LATAM ready for departure and its next adventure.

By Chris Chamberlin, September 27 2019

LATAM will exit the Oneworld airline alliance as it forges ahead on a new partnership with Delta Air Lines, opening up the possibility that the South American carrier could take a seat next to Delta at the SkyTeam table.

A statement issued to media by Oneworld confirms that LATAM "intend to leave the alliance in due course and in accordance with formal contractual requirements. We are disappointed, but we respect their decision."

The move, which will leave Oneworld without its lynchpin presence in Latin America, follows an overnight announcement by Delta Air Lines that it will buy a 20% stake in LATAM worth US$1.9 billion to create a major partnership between the North and South American carriers.

It also opens the door to LATAM jumping across to SkyTeam, of which Delta is a founding member. Executive Traveller has contacted LATAM to ask whether the airline may realign itself, but had not received a response at the time of publication.

“This alliance with Delta strengthens our company and enhances our leadership in Latin America by providing the best connectivity through our highly complementary route networks,” said LATAM CEO Enrique Cueto Plaza.

As part of the deal, Delta will acquire four Airbus A350 aircraft currently flown by LATAM and will take ownership of ten additional A350 jets to be delivered from 2020 to 2025.

Oneworld frequent flyer points and perks with LATAM

While LATAM remains a Oneworld member, there'll be no change to frequent flyer arrangements including the earning and redeeming of points, airport lounge access and other perks for frequent flyers.

This includes benefits for Oneworld Ruby, Sapphire and Emerald cardholders of Oneworld alliance airlines when travelling with LATAM, as well at LATAM's own tiered frequent flyers, who can expect the same treatment when jetting about with Oneworld member airlines until LATAM finalises its exit.

Approached by Executive Traveller for comment, a Qantas spokesperson confirmed that “there are no changes to our codeshare with LATAM as a result of recent announcements.”

“Qantas and LATAM have agreed that the bilateral agreement we have works well for customers and we will look for opportunities to enhance it in future.”

LATAM – previously two airlines, Chilean LAN and Brazilian TAM – has an interesting history with airline alliances.

LAN Airlines joined Oneworld back in 2000, and by 2007, had also brought three of its its South American affiliates under the Oneworld banner, including LAN Peru, LAN Argentina and LAN Ecuador.

TAM, on the other hand, joined rival Star Alliance in 2010, merged with LAN in 2012, quit Star Alliance in 2014 to join Oneworld instead, and alongside LAN, both airlines were rebranded as LATAM in 2015, a Oneworld alliance member.

Chris Chamberlin

Chris Chamberlin is the Associate Editor of Executive Traveller and lives by the motto that a journey of a thousand miles begins with a single step, a great latte, a theatre ticket and a glass of wine!

mickeyg

mickeyg

Virgin Australia - Platinum

26 Jun 2011

Total posts 46

I see a DL/LA/VA venture in the future!

Camilo

Camilo

Virgin Australia - Velocity Rewards

07 Sep 2018

Total posts 3

Do you think so!!! this would be best news ever!!! since VA will finally have a partner that goes all across South America!!!

Bertie

Bertie

Qantas - Qantas Frequent Flyer

29 Nov 2013

Total posts 9

Two giant airlines joining forces: hope this move not only improves their balance sheets but also the passenger's experience. Wife and I just returned from BUE with LA and although we traveled Y class all the way, we enjoyed the One World status recognition by LA (I am a QF Lifetime Gold). This meant we had access to bus class check-in, to the lounges and were offered premium seating at not additional cost. I do hope QF are able to maintain their close alliance with LA, including the recognition of each others frequent flyer programs. Failing that, what options are there? I don't think there is an alternative One World carrier within South America!

cloud-9

cloud-9

British Airways - Executive Club

28 Mar 2014

Total posts 62

Were you able to sit in the exit and front row on LA? Did you book Light or Plus class?

I am planning to travel with them soon and have received conflicting advice ref seating

Many thanks

Bertie

Bertie

Qantas - Qantas Frequent Flyer

29 Nov 2013

Total posts 9

Hi cloud-9, I booked return Y class SYD-EZE-SYD on LA. Was hoping to use points for upgrades but proved not possible. Paid small surcharge to select seat. Either side aisle seats row 18 on the SYD-AKL-SCL sectors were fine, just a bit tight.. SCL-EZE chose window seat for spectacular views of the crossing of the Andes, but space was tight. Return flight, at EZE check in agent upgraded our seating to Economy Plus for SCL-AKL sector (AKL-SYD was cancelled and we were put on an NZ flight). Row 14 H and J were good seats with considerably more leg room! If you are a tall person I would suggest you pay the surcharge for Economy Plus, or make sure you ask the agent at check-in...!

Bertie

Bertie

Qantas - Qantas Frequent Flyer

29 Nov 2013

Total posts 9

Hi Cloud-9, I had prepared a reply to your post but somehow managed to lose it! Here I go again. I purchased return Y SYD-EZE-SYD tickets. Was hoping to use points to upgrade but proved not possible (yet again!). Paid small surcharge to confirm seat allocation. Row 18 either side of the aisle. Good seats if a little tight. On SCL-EZE sector booked window seat further back for excellent views of the crossing of the Andes. Quite tight, though. For return flights, check-in agent at EZE upgraded our seating to Economy Plus row 15, again either side of the aisle for the SCL-AKL sector. Great seats, much more leg room! That, combined with my new Sony Wireless Noise Cancelling Stereo headphones made the trip enjoyable!! Unfortunately, LA had cancelled the AKL-SYD sector and we were put on NZ 777-200 service which was tight but great, as they always are. As regards exit or front row, they are certainly worth it if you can get them, but under no circumstances accept seats 30L nor 30A on Latam's B787-900 - those are horribly cramped seats right next to the bulging door - should never be offered for sale as seat guru points out! Hope this helps. Buen viaje!

DownSouth

DownSouth

23 Oct 2014

Total posts 102

Virgin jump in and strike a deal with LN, combined with DL that's 1/2 globe covered.

DanV

DanV

Qantas - Qantas Frequent Flyer

04 Nov 2017

Total posts 114

Both "Virgins" (aka VS/VA) will benefit to 'some' degree. Whether VS (or VA) will strike up a codeshare agreement in the future is another question.

vitorsyd

vitorsyd

04 Jun 2018

Total posts 11

It will be interesting to see what will happen to G3 Gol Linhas Aéreas in Brazil, which currently has a number of partnerships with Sky Team airlines (DL, AF, AM, KL) to name a few and is also a strategic partner for Delta in the country!

kimshep

kimshep

Qantas - Qantas Frequent Flyer

11 Oct 2014

Total posts 492

DL will divest itself of it's interest in GOL. Already mentioned in a number of existing PR's.

tommygun

tommygun

Delta Air Lines - SkyMiles

16 Oct 2017

Total posts 88

Do BA have a codeshare with LA? Will leave a big gap otherwise without seamless connections. Same question I guess for AA.

cloud-9

cloud-9

British Airways - Executive Club

28 Mar 2014

Total posts 62

I don't think BA has a code share

The biggest loss will be domestic flights to small airports. QF BA AA can all serve the hubs well but it's the internal travel that will be affected

OttoV

OttoV

Jetstar Airways - Qantas Frequent Flyer

24 Aug 2018

Total posts 45

Little or no assurances about potential loss of QFFs or SC to those who booked return flights with Latam from Melbourne to Buenos Aires in Feb, 2020. As the divorce is to be finalised ‘ in due course' where does that leave current and future travellers?

cloud-9

cloud-9

British Airways - Executive Club

28 Mar 2014

Total posts 62

I doubt it will be that soon.

Don't airlines have to give a years notice to leave an alliance?

olivermking

olivermking

Qantas - Qantas Frequent Flyer

25 Sep 2017

Total posts 2

Any idea when will this happen?

kimshep

kimshep

Qantas - Qantas Frequent Flyer

11 Oct 2014

Total posts 492

Somebody at AA was seriously asleep at the wheel when this occurred overnight.

Apart from what many may think, this move by Delta (DL) is absolutely mind-blowing and was definitely not envisaged by .... anyone. As a strategic strike, it is virtually unparalleled. This history of the South American market over the past 50 years has seen American Airlines (AA) as the unchallenged market leader, with United (UAL / CO) in second place, with DL as a distant third. The incumbent South American carriers (LAN, TAM and Areolineas Argentinas) were typically second-tier international carriers, with only LAN and TAM slowly developing their networks over the past 20 years. Enrique Cueto (LAN) had the vision to join oneworld and built upon that with clever international routes. Then, buying out TAM. Regrettably, AR has made little headway with routes or fleet over the same period.

Apart from all the complimentary oneworld phrases of "we are disappointed but will respect LATAM's decision", this presents a HUGE number of unanswered questions:

  • Did DL over-pay? USD $1.9B and a few hundred million for other services for 20% of LATAM which has a market capitalisation of approximately $4.8B.

  • Will Qatar Airways still maintain their ownership position in LATAM?

  • Will BA (British Airways) and IB (Iberia) start launching duplicate routes between South America and Europe at will to counter the revenue and passenger loss of LATAM's operation and codeshares?

  • Obviously, Air France (AF) and to a lesser extent KLM (KL) will be clapping hands. Could this be the mechanism for moving SkyTeam as an alliance, from a distant 3rd place to either 1st or 2nd?

  • Where does this leave AR (Aerolineas Argentinas) as DL's South American SkyTeam partner? Would AR seek to leave SkyTeam and join oneworld instead?

  • How much interplay / input has Virgin Atlantic had in this decision by DL, given that Virgin Atlantic (as a DL partner and fellow SkyTeam member - has just announced service to Sao Paulo, Brasil (GRU)?

  • Does DL's move on LATAM put AA's gateway Miami (MIA) hub in jeopardy? After all, while LATAM might choose to open a route or two to DL's home of Atlanta (ATL), it's hardly the drawcard for South American destinations that MIA is. And it is possible that DL could use LATAM as a trojan horse to get into MIA - a city where DL has limited operations and control.

  • Ed Bastian's (DL CEO) comments of a couple of days ago regarding the 'failure of SkyTeam' must now be seen in a different light.

  • Odd, isn't it, that the last carrier to leave SkyTeam - being China Southern - seems to have a no-compete condition in their contract. It would appear to be a 12-18 month period after leaving, before joining a competing alliance. Is this the same case with LATAM (leaving oneworld .. and the possibility of joing SkyTeam at a later, unspecified date?

  • Will AA pursue GOL for a shareholding in the discount carrier, once DL exits it's current position? As an LCC, GOL is not the most desirable vehicle, but it has a route network in South America which is the only equal of LATAM.

  • Will this announcement by DL/LA cause QF to speed up or review it's B787-9 purchasing plans? Apart from the 'neutral' QF statement above (they would have been as shocked and surprised this morning as anyone else), what will QF's true response be? After all, LATAM does work well with QF, given they are both in oneworld today - but if LA removes itself from oneworld, that co-operation might not be guaranteed. Under those conditions, QF would need to move quickly to lock in it's traffic ex Australia to South America. Perhaps, people have under-rated the QF 'Sunrise' destinations of GRU (Sao Paulo), Rio de Janerio (GIG) and most importantly Lima (LIM). Could we see a welcome return of QF to Buenos Aires (EZE) ?

  • Hell, QF might find itself fighting DL on several fronts. LAX-SYD-LAX, USA domestic, SCL-AKL-SCL, SCL-AKL-SYD, SCL-MEL and if DL were ever to buy into Virgin Australia, it might be a whole new world of competition.

koji

koji

Cathay Pacific - The Marco Polo Club

11 Jun 2018

Total posts 26

Really raised all my doubts in this post. It did seem like an overnight change If I haven't missed anything.

cloud-9

cloud-9

British Airways - Executive Club

28 Mar 2014

Total posts 62

Bear in mind QR have been talking of leaving ow for the last year.....

If thay they actually follow through with it now it would be disastrous...

mickeyg

mickeyg

Virgin Australia - Platinum

26 Jun 2011

Total posts 46

Doesn't seem as though there was much "interplay/input" from VS prior to this decision, as VS only announced a code share agreement with GOL 3 weeks ago.

dimi

dimi

Qantas - Qantas Frequent Flyer

13 Jul 2012

Total posts 114

AA sleeping at the wheel: It sounds like Delta has got its revenge on AA's snatching China Southern out of SkyTeam.

SkyTeam/Oneworld departures: China Southern exited SkyTeam very quickly (a little over a month after the announcement). However there is a year-long transition period when China Southern and SkyTeam airlines continue recognising mutual frequent flyer benefits. The same transition period will happen in LATAM's case. After all, lots of people already purchase tickets for 2020, with their choice of the airline drive by alliances/partnerships.

Virgin Atlantic: Note that Virgin Atlantic is not a "fellow SkyTeam member", and it is not clear whether it is joining any time soon (I guess they've got to sort out that Brexit thing first before deciding on future business plans).

QF/LATAM: It may or may not have dramatic consequences for QF's partnership with LATAM. SkyTeam is a lot more flexible in term of partnerships with "alien" airlines. After all, both Delta and Qantas have very close partnerships with China Eastern. The same model may or may not apply to LATAM.

MKS11

MKS11

Qantas - Qantas Frequent Flyer

05 Oct 2016

Total posts 33

Damn! I was looking to use latam as an interesting OW option to get to LHR and EU...

cloud-9

cloud-9

British Airways - Executive Club

28 Mar 2014

Total posts 62

MKS11. Make sure you do the LA FRA MAD flight when in Europe.

A rare chance to fly a wide bodied (sleeper) seat on a short haul international route

Felipe

Felipe

Qantas - Qantas Frequent Flyer

18 May 2017

Total posts 17

It is interesting to hear that LATAM will move over to SkyTeam. Already, Aerolineas Argentinas is a member of SkyTeam, so you would have 2 competing members covering the same turf, within the same alliance. It will be interesting to see if Aerolineas moves out of SkyTeam. I have no information that they are considering that.... at least not yet. Can you imagine if it ends up going to OneWorld or Star Alliance?

Bertie

Bertie

Qantas - Qantas Frequent Flyer

29 Nov 2013

Total posts 9

Felipe, as far as I'm aware Latam have not (yet!) announced that they will be joining SkyTeam. Indeed, AR are members of SkyTeam but I doubt they would have any plans to drop out. In fact they have close associations with other SkyTeam members including AM, AF, KL, AZ and very importantly DL. Doubt they would want to drop any of that. Also interesting to note the alignment of NZ with AR, both members of different alliances: AR feeds South American traffic to NZ at EZE and codeshares on the EZE-AKL service. If Latam end up joining SkyTeam, there might end up being two SkyTeam domestic airlines in Argentina (AR and Latam Argentina) and no One-World nor Star Alliance partners...! Will be interesting to see what happens in Brazil given Latam's dominance. Note Gol has partnerships with AR.

moa999

moa999

Qantas - Qantas Frequent Flyer

02 Jul 2011

Total posts 1376

Remeber also that AA wanted closer co-operation with LATAM but the Chilean Supreme court blocked JVAs with both AA and BA

kimshep

kimshep

Qantas - Qantas Frequent Flyer

11 Oct 2014

Total posts 492

Had the proposed JVA only been AA and BA, I suspect it may have fared marginally better with the Chilean authority. My understanding is that the formal application included BA, AA, IB and FI (British Airways, American, Iberia and Finnair) as partners to LATAM.

I think it could be interesting to see how / if DL would proceed with a similar theoretical Chilean JVA request, given that Air France, KLM, Virgin Atlantic and WestJet could all be potential partners in such a venture - and each of the first two have substantial presence in South America markets also.

Additionally, one also has to consider how such a proposed JVA would be received in the USA (Justice Dept, Attorney General and DOT). Maybe, not such a 'lay-down mysere' ?

tommygun

tommygun

Delta Air Lines - SkyMiles

16 Oct 2017

Total posts 88

As far as I know, LATAM is the only Oneworld carrier between Africa and South America direct. Quite a bonus for SkyTeam to pick up that traffic.

AviationGeek

AviationGeek

Qantas - Qantas Frequent Flyer

06 Sep 2017

Total posts 6

I'm sorry but I just needed somewhere to vent my shock and disbelief.

It just doesn't make any sense to me. LATAM has recently been focusing on the Australian market with direct flights to both Melbourne and Sydney. What's the point of linking to these Qantas/Oneworld hubs and strengthening business with Qantas only for them to be rivals in the future?

LATAM is also Oneworld's competitive advantage. Without LATAM, Oneworld will have no coverage intra South America, along with no coverage in intra Africa (even Royal Air Maroc is limited to northern Africa). Now also rumours of Qatar looking to leave.

Oneworld has seriously let its eyes off the ball. So much for a premium global alliance - it keeps going backwards.

As a QFFer, I'd really prefer to see Oneworld dominant rather than crumble. Thanks for letting me get my frustrations out.

OttoV

OttoV

Jetstar Airways - Qantas Frequent Flyer

24 Aug 2018

Total posts 45

Hi aviationgeek.

I share your frustration and will look on in despair as Aussie travellers to the Antarctic can no longer find a reasonable link to Buenos Aires from which to fly to Ushuaia. Nor the potential loss of lounge access in Santiago, B.A,and other S.A destination such as Peru, Chile, Brazil, etc...just as those countries are becoming more popular and more accessible. As a booked flyer ( see above) to Ushuaia with LATAM I am not a little peed off about the whole deal which may complicate things when I least need it.

jed

jed

14 Feb 2015

Total posts 2

This is not a great lost. My last return flight in September , Business class was a complete disaster and disgraceful.

Our flight was cancelled in Santiago, engine problems, Safety first of course.

They kept us waiting at the airport for 5 hours plus before putting us into a Hotel..

No communication from staff or management, a complete disaster..This is a good thing for One World.

This could be a good thing for Qantas and a huge market for them..They only have to step up with there service and

perhaps bring in new aeroplanes and not use those old 747....!

OttoV

OttoV

Jetstar Airways - Qantas Frequent Flyer

24 Aug 2018

Total posts 45

Hi Jed, commiserations on your experience with LATAM. As per previous posts, my wife and I are due to fly with them Melb. to Santiago/ Buenos Aires and beyond in J. Sincerely hope that the issue of safety ( with concomitant ignorance of pax comfort) does not reoccur. At least with Qantas you can expect fairly rapid recovery. My example: some years ago, on our way to Europe, had a B 747 roar down the runway just prior to V1 when the captain hit the brakes and returned to the gate citing one engine was not performing. He explained that one B 747 had just come out of maintenance and once our luggage was moved to the new metal, we'd be on our way with him in control. We were back in the air within three hours, missed our connection in Singapore etc etc missed luggage etc etc but we got to Europe ( well informed ) and another airline was blamed, so AJ ‘s people were off the hook. Ah, the joys of flight....just grin and bear it?! Yes, a Q flight might well be a better option.


Hi Guest, join in the discussion on LATAM to leave the Oneworld alliance, but will it join SkyTeam?