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.

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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Category

oneworld alliance partners

This article is closed to new posts. Discussion continues in the HfP Forums.

John says:

27 Sep27 September 04:56

There is a press release on OW’s website stating LA will be leaving…
- Rob says:
  
  27 Sep27 September 06:33
  
  Thanks. Wasn’t there at midnight last night!
Alan Wan says:

27 Sep27 September 05:03

I am doing FRA-MAD with LATAM in late November. Assume they won’t have left OW by then 😦
- Ted says:
  
  27 Sep27 September 08:10
  
  My wife and I are doing the same in mid-October. Our first time experiencing a ‘proper’ business class seat! Very much looking forward to it. Should still get Avios and TPs I’d imagine. We got a steal on cash tickets, I had been keeping an eye out for quite a while.
  - Stu N says:
    
    27 Sep27 September 08:22
    
    It’s a fun flight. You use the very decent Air Canada lounge at FRA as the LATAM flight goes from a pier without a One World option. Boarding was a bit of a scrum when I did it but otherwise it was great. Pisco Sour PDB is a nice treat.
    - Ted says:
      
      27 Sep27 September 10:25
      
      Oh great – I thought it was the Air Canada lounge based on historic posts about this flight but wasn’t sure if it was still the case or not. Can’t wait for the Pisco Sour 🙂
      - marcw says:
        
        27 Sep27 September 11:40
        
        I don’t think they serve piso sour anymore in business…. based on latest german reviews.
SydneySwan says:

27 Sep27 September 05:10

Big blow. Flying around South America is not cheap which means reward flights on LATAM are generally good value redemptions.
John says:

27 Sep27 September 05:16

To me, the most interesting thing is the issue of QR. They have a 10% stake in LA. They’re also unhappy with OW. So what, if anything, will change on their end?

Also, I assume relatively few readers are using the AS (Alaska Airlines) programme. But one can expect them to cut ties with LA.
- Simon says:
  
  27 Sep27 September 06:11
  
  I don’t know about AS – they have traditionally been agnostic about who they partner with and partners’ alliances.
  
  I don’t understand why DL expect regulatory approval when this wasn’t forthcoming for AA?
  - John says:
    
    27 Sep27 September 06:22
    
    I think it may be DL which demands cutting ties with AS. Look at the history of DL’s minority-stake investments as well as joint ventures (JV). Each time after DL invested or formed a JV, the target had to end the cooperation with AS (if there was one in place).
    
    Cases in point: Aeromexico, AF-KL
    - Stu N says:
      
      27 Sep27 September 08:25
      
      Alaska and Delta complete heavily out of Seattle and other west coast airports so I wouldn’t imagine any cooperation would last long.
      - Will in CA says:
        
        27 Sep27 September 13:50
        
        Heavily is probably a bit OTT. SEA is Alaska’s heartland but for DL it is more of a focus city. AS dominate in terms of number of destinations served and movements. Crucially though there isn’t as much overlap as you might think. DL have focused on building long haul international routes out of SEA which is clearly not the AS cup of tea.
        
        Plus DL seem pretty happy with KE being an Alaska Partner despite the stake that DL have so it’s not like their isn’t precedent for this.
Sacha says:

27 Sep27 September 06:13

Hi

This was a shocker to wake up to at 6am! My major tier points trip for the year is to Brazil in November with LATAM. Will I still get the tier points I need to retain my BA status?

Thanks!
- Rob says:
  
  27 Sep27 September 06:32
  
  This November, no problem (hopefully). May be trickier by Easter.
- Shoestring says:
  
  27 Sep27 September 06:35
  
  who knows? probably nobody until they decide/ publish the cut off rules when BA tier points can no longer be earned on LATAM
  
  there is generally a principle that you don’t lose tier points/ Avios to be earned on bookings made *before* a significant change like this
  - Shoestring says:
    
    27 Sep27 September 06:37
    
    [LATAM further advised oneworld that they intend to leave the alliance in due course and in accordance with formal contractual requirements. We are disappointed, but we respect their decision. They have been a valued long-term member of the alliance, and we wish them well.
    
    Our priority at this time is to our customers and while LATAM remains a member of oneworld, the full customer benefits will continue to be delivered. As the transition continues, we will work to ensure a seamless experience for our customers.]
  - Doug M says:
    
    27 Sep27 September 10:02
    
    That principal didn’t hold when AA First was reclassified as business and flights already booked went from 210-140 and 60-40 TP.
Alex W says:

27 Sep27 September 06:46

Gutted. Was hoping one day to do Easter Island. Hope the partnership with Alaska remains as I have no intention of earning Skypesos!
- Jon says:
  
  27 Sep27 September 08:22
  
  Alex
  The Easter Island rewards were never there so you have not missed anything apart from frustration at finding them.
  - Jase says:
    
    27 Sep27 September 13:54
    
    But you may have missed the very cheap Business class fares to SCL – IPC when booked on the Chilean website.
Phillip says:

27 Sep27 September 07:15

Worth noting that you can’t redeem AS miles for flights from Europe – only US/Canada/Mexico/Domestic!
BJ says:

27 Sep27 September 07:35

I wonder if Delta are setting themselves up to be the next Etihad. Given that US-based carriers do not have a very illustrious history of running themselves, stakes in other airlines would seem to be ill-advised.
- Lady London says:
  
  27 Sep27 September 20:20
  
  Yes. If Delta went down it would be a big shock. But no one would have expected that of Pan Am at one time, and particulary not of TWA, yet both went.
  
  I like Delta, I think the experience down the back of their planes seems to be better than UA (in particular) and AA.