LATAM Boeing 787-9 Dreamliner

Delta surprised the aviation world last night by announcing it had acquired a 20% in South American airline, LATAM. Moments later, Oneworld announced that LATAM will leave the Oneworld alliance “in due course”, which would eliminate a native Oneworld carrier from South America and limit the destination network to the main hub airports.

The secret deal between LATAM and Delta comes shortly after Delta‘s CEO said the SkyTeam alliance wasn’t working for passengers or airlines. Stopping short of saying Delta would leave SkyTeam, their CEO did suggest they were planning a “very different approach.”

A New Alliance?

Delta’s also owns 49% of Virgin Atlantic, 49% of Aeromexico, with smaller stakes in Air France KLM, Korean, China Eastern, and GOL. Could the LATAM deal herald the formation of a new airline alliance? Delta isn’t the first to try this approach. Etihad made large investments in a number of airlines in the hope of forging its own alliance and has so far avoided joining Oneworld, Star Alliance, or SkyTeam. With the high-profile failure of Air Berlin and Alitalia still struggling to stay afloat, the venture has been far from successful for Etihad. Is Delta doing something different? Many analysts believe so.

Where do LATAM Pass members stand as LATAM leaves Oneworld?

As LATAM leaves Oneworld, there will be concern among members of its frequent flyer programme, LATAM Pass. While earning and redemptions will no doubt be honoured for a limited period of time, all Oneworld benefits will eventually be removed. It’s possible American Airlines may offer a soft-landing onto their AAdvantage programme, as they have been heavily involved with LATAM until news of the Delta deal broke. It’s also likely Delta will offer extended benefits to LATAM Pass customers. Before LATAM leaves Oneworld, those holding lots of miles might want to consider bringing forward travel on Oneworld flights before the benefit is removed or any devaluation occurs.

About LATAM

LATAM is the largest passenger airline in Latin America and the largest single airline group in the world. It was formed when LAN and TAM merged in 2011. It actually comprises of 7 national airlines:

LATAM has been a full Oneworld member since 2013.