Delta Air Lines To Acquire LATAM Airbus A350 Aircraft

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Delta Air Lines is to acquire Airbus A350 from South American holding group, LATAM. The news comes as Delta announced purchasing 20% of the oneworld carrier. Simultaneously, American Airlines announced it would not be expanding its partnership with LATAM, given the news.

Delta Air Lines, LATAM, Airbus A350
Delta Air Lines is to acquire a total of 14 of LATAM’s Airbus A350s. Photo: Delta Air Lines

LATAM is a Chilean airline holding group. It was founded in 2012 when the airlines LAN and TAM were merged. Now, the airline’s relationships are set to expand as Delta has announced it will purchase a 20% stake in LATAM pending regulatory approval. The deal includes the transfer of 14 Airbus A350 aircraft among other things.

Airbus A350 transfer

For me, the highlight of this deal is undoubtedly the transfer of Airbus A350s from LATAM to Delta. Let’s take a look at how things currently stand in the Airbus order books. As of the 31st of August, Airbus’ order books show a total of 50 Airbus A350s ordered by the two companies.

Delta Air Lines has 25 Airbus A350-900s ordered, with 13 of these delivered and operational. Meanwhile, LATAM also has 25 A350’s ordered. This consists of 17 A350-900s, and 8 A350-1000s. Of these orders, twelve -900s have been delivered, while seven are operational.

Delta Air Lines, LATAM, Airbus A350
Four of LATAM’s existing Airbus A350s would head to Delta under the deal. Photo: Anna Zvereva via Flickr

However, while the total number of Airbus A350s on order won’t change, for now, their distribution will. Delta is to take four of LATAM’s existing Airbus A350s. However, what gets more interesting is that Delta has “agreed to assume LATAM’s commitment to purchase 10 additional A350 aircraft to be delivered beginning in 2020 through 2025.”

What about the rest of the deal?

Of course, the deal between Delta Air Lines and LATAM isn’t just about Airbus A350s. Delta Air Lines will invest a cool $1.9 billion in a 20% stake of LATAM. The US airline says this works out at $16 a share.

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On top of this figure, Delta has also said that it will contribute the sum of $350 million to help create a strategic partnership between it and LATAM. Finally, as part of the deal, Delta will receive representation on LATAM’s board of directors. As is always the case, the deal that has been announced is subject to approval by the relevant regulators.

Delta Air Lines, LATAM, Airbus A350
Delta would take over 10 of LATAM’s commitments for unbuilt Airbus A350 aircraft. Photo: Delta Air Lines

Ed Bastian, Delta’s CEO said of the partnership: “This transformative partnership with LATAM will bring together our leading global brands, enabling us to provide the very best service and reliability for travelers to, from and throughout the Americas.”

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Meanwhile, LATAM’s CEO, Enrique Cueto Plaza, said: “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.”

What do you make of this new partnership between airlines? Let us know your thoughts in the comments.

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