Spokespeople from both LATAM and Oneworld have confirmed LATAM, the top Latin American airline, will leave the Oneworld Alliance by October 1, 2020, meeting the required one-year notice.
LATAM Airlines is a product of a merger between Lan of Chile and Tam of Brasil in 2017. LATAM became a member of Oneworld in 2014. The carrier provides service to 143 destinations and has hubs in Santiago de Chile, Sao Paulo, Buenos Aires, Bogota, Lima, Quito, and Guayaquil, which helps Oneworld support its ever-growing Latin America market.
What led to the split?
After LATAM solidified its strategic partnership with US carrier, Delta, in September, Oneworld released a statement commenting that LATAM would be leaving the alliance “in due course and in accordance with formal contractual requirements,” although no date was confirmed.
Members of Oneworld include American Airlines, a rival to Delta. Delta acquired a 20% stake in LATAM for $1.9 billion in September 2019. The new partnership between Delta and LATAM will place the pair in the leading position in five of the top Latin American markets. The new partners will collectively serve 435 destinations worldwide.
In a statement issued by Oneworld, the alliance stated they “respect” the decision made by the airline and “wish them well.” American Airlines, a founding member of the Oneworld Alliance, announced they would apply to be in joint partnership with LATAM in January of 2016. Yet, in May of 2019, the proposed partnership was denied by the Chilean Supreme Court. Those judges noted the venture’s “joint market power” might be “hard to challenge in a post-deal scenario.”
How will passengers be impacted?
Oneworld partner airlines have begun to notify patrons of how these changes will affect them. American Airlines’ website informs travelers that “LATAM Airlines will no longer operate using the airline code JJ for flights on or after October 27, 2019.” Other members of Oneworld have released similar statements to their passengers, informing them of changes to codesharing, procedures for checked baggage, and loyalty rewards. Members of the alliance said that they will continue to accept customers “per [thier] current agreements that are still intact.”
Although both American and LATAM have verified that they will continue to “ensure all of our customers are taken care of,” passengers should anticipate experiencing some minor annoyances as the pair officially severs ties.
What is next?
LATAM claims it intends to work with several members of Oneworld — albeit separately. The idea of LATAM’s ongoing partnership with members of the alliance comes as no surprise considering Qatar, a Middle Eastern carrier and member of Oneworld, owns a 10% stake in LATAM.
It is still to be determined if LATAM will join Delta in the Skyteam alliance. Financial strains on LATAM might keep the airline unaffiliated for a little while longer as it seeks additional partnerships. Skyteam has not commented on whether LATAM will be joining in the future.
But it is not unimaginable — as Skyteam has had a relatively weak standing in the Latin America market and would benefit from adding LATAM to its ranks.