Delta takes 20% of LATAM which will leave OneWorld

Delta will spend $1.9 billion to take a 20% stake in the South American airline LATAM (Chile), it was learned yesterday.

Delta will also invest $350 millions to support this strategic partnership.

Delta moves into Latin America

Finally, the U.S. airline will acquire four A350s from LATAM and has agreed to meet LATAM’s engagement to purchase an additional ten A350s for delivery between 2020 and 2025, as part of its ongoing fleet transformation.

LATAM is the largest airline in Latin America and this is certainly a good move for Delta to strengthen its network there. For LATAM, which has been experiencing some financial difficulties lately, this is also a good reason to see the future in pink.

For Ed Bastian, Delta’s CEO, “This transformative partnership with LATAM will bring together leading global brands, allowing us to offer the best service and reliability to travelers to, from and within the Americas. Our employees, customers, owners and communities will all benefit from this exciting platform for future growth.“

Enrique Cueto Plaza, LATAM’s CEO, is no less optimistic. “This alliance with Delta strengthens our business and reinforces our leadership in Latin America by offering the best connectivity through our highly complementary route networks. We look forward to working with one of the world’s leading airlines to enhance the travel experience for our passengers.“

Bad news for GOL, American Airlines and OneWorld

The announcement does not do the business of GOL in which Delta had invested and will now sell its shares.

Bad news also for American Airlines, LATAM’s partner in the region, which was considering setting up a strategic partnership.

It is also a hard blow for the Oneworld alliance, which LATAM will be leaving and which is losing a major partner in the region, leaving it very deprived, even though American is very present there.

LATAM will not join Skyteam

But all this does not mean that LATAM would join Skyteam. Ed Bastian, Delta’s CEO, recently made it known how disappointed he was with the alliance and that he now wants to build his own network of partners (we’ll talk about it on TravelGuys next week….) and this acquisition seems to be in line with this strategy.

For the time being, nothing has been decided on this subject, but everything suggests that LATAM will remain outside Skyteam.

Photo : B787 LATAM by Tobias Arhelger via Shutterstock