What Will Happen When LATAM Leaves The oneworld Alliance?

LATAM is oneworld’s largest member in South America. As a result, when LATAM announced they were leaving oneworld in favor of a partnership with Delta Air Lines, it sent a ripple throughout the aviation world. As oneworld’s only South American airline, this decision will affect the alliance negatively.

LATAM A320neo
LATAMs withdrawal from the oneworld alliance will leave oneworld without a South American partner. Photo: Airbus

LATAM is leaving oneworld

Shortly after announcing a major partnership with Delta Air Lines, LATAM announced they would be departing from the oneworld alliance. This made sense as it meant LATAM would not be pursuing greater cooperation with founding member, American Airlines.

American Airlines
LATAM’s partnership with American Airlines faced many regulatory hurdles. Photo: Tom Boon – Simple Flying

Outside of American, LATAM did not partner closely with many other airlines in the oneworld alliance. Indeed, American had the greatest presence in South America after LATAM of all the oneworld airlines. As alliance memberships can come at high costs, it makes financial sense for the airline to exit the alliance to seek additional partners. China Southern used a similar rationale for their departure from the Skyteam alliance.

oneworld loses a South American partner

LATAM leaving oneworld means that the alliance will no longer have a major member in South America. Thus, this creates a critical gap in the alliance network. And, as one of American Airlines’ most profitable regions, this move will undoubtedly harm the alliance in the long-term.

Partnerships that enable for reciprocal frequent-flier benefits, checked baggage agreements, and codesharing can ease the connection process for travelers and airlines alike. It is unclear if LATAM will seek to maintain other oneworld partners outside of the alliance.

In the short term, without those partnerships, oneworld passengers will face mixed-airline itineraries that can be a hassle in terms of re-checking luggage and ticketing.

Video of the day:

oneworld livery
oneworld will soon have a critical gap in South America. Photo: Tom Boon – Simple Flying

LATAM’s history with alliances

LATAM as known today was once two separate airlines. LAN and TAM came together to form the South American giant a few years ago. As part of the merger, TAM, a member of the Star Alliance network, left that alliance as the new airline chose to be a member of the oneworld alliance. This was likely to leverage their key partnership with American Airlines.

TAM before becoming LATAM
After TAM merged with LAN, the new airline chose oneworld over Star Alliance. Photo: Airbus

Fortunately for Star Alliance, they still had Avianca for a major presence in South America. Skyteam, meanwhile, had Aerolíneas Argentinas, although they do not have as large a presence as either LATAM or Avianca.

Will LATAM join Skyteam after leaving oneworld?

Now that LATAM is partnering with Delta, this begs the question of whether LATAM will join the Skyteam alliance. However, this move seems unlikely. On one hand, LATAM’s independence will allow the airline to pursue partnerships and opportunities. Not to mention, as a member of an alliance, this comes with additional expenses. Although it is not impossible for LATAM to join Skyteam, they likely will not do so anytime soon.

LATAM
LATAM, after leaving oneworld, will likely not join Skyteam anytime soon. Photo: Bidgee via Wikimedia Commons

How do you think LATAM’s departure will affect oneworld? Let us know in the comments!

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Phil

If American and IAG were wise enough they ought to collectively purchase Delta’s stake in Gol in order to regain somewhat of a foothold in the South American market. Perhaps Gol might be interested in becoming a oneworld connect member (similar to Fiji Airways). Another option might be perhaps developing ties with Aerolinas Argentinas. I dont imagine Aerolinas Argentinas being too happy with their Skyteam partner Delta purchasing a stake in their biggest rival LATAM. Wouldn’t be surprised to see them leaving Skyteam sometime.

PQSC

”Outside of American, LATAM did not partner closely with many other airlines in the oneworld alliance.“ well …… Oneworld is not exactly a large alliance; LAN had a strategic partnership with Iberia that was latter extended to LATAM – IAG. Though in recent years LATAM main interest shifted from Europe towards USA. ”Indeed, American had the greatest presence of oneworld members in South America after LATAM.” Can this be supported with data? At least in terms of ASK, AA and IB should be relatively close ”As alliance memberships can come with high costs, it makes financial sense for the airline… Read more »

Vince

Indeed. One world alliance members have been screwing with each other.
Qantas screwed Qatar by partnering with Emirates.
Qatar screwed Cathay by partnering with china southern.
And now LATAM screwed AA with their new Delta partnership.

Phil

I won’t be surprised if oneworld and maybe the other alliances just end up splitting or rearranging sometime in the near future.

Richard Johnson

Hopefully better time slots and routes for Delta flyers to South America. I looking forward to this transaction. I am tired of flying into these cities late at night and flying home very early in the morning and not getting a flight to the smaller cities in South America.

Herman G

FROM AA VIEW For Colombia, AA is flying directly to main cities from MIA to BOG, CLO, MDE, CTG, BAQ and from DFW to BOG. LATAM pass wasn’t so strong, ironically many people were AAdvantage that used when they fly LA and IB but the leader in the market is LifeMiles of Avianca, but AAdvantage was second because the demand for AA to MIA since 1990. DL had some history but their SkyMiles is not so strong there and not even with LATAM Pass customers. Argentina has direct flights from MIA, LAX, DFW and JFK to EZE and MIA to… Read more »

M Santoro

As a Gold BA member the only good thing when flying domestic with LATAM in Brazil was the premium boarding. There is no lounge in GIG, I usually use the AA lounge. All Latam domestic flights within brasil are just like easyJet or Ryanair in England. You have to pay for premium seats, food has to be purchased and it is not good and there is no business class cabin. The amount of tier points on domestic flights are very poor. Most of the flights from Europe to Brasil are to GRU With a domestic connection to other cities or… Read more »