MIAMI – Yesterday, Delta Air Lines (DL) and LATAM Airlines Group obtained regulatory approval for their Trans-American Joint Venture Agreement (JVA) from the Brazilian Competition Body, the Administrative Council for Economic Defense (CADE). The CADE’s approval is subject to a 15-day appeal period.
According to the joint press release, the proposed JVA between DL and LATAM submitted to CADE on July 14, 2020, was accepted without conditions. The decision follows an assessment of the factors of free competition, taking into account the unparalleled economic effect of COVID-19 on the airline industry.
This is the first approval of the JVA between Delta and LATAM since it was signed in May 2020. The JVA intends to link the highly complementary route networks of carriers and provide consumers with seamless travel experience between North and South America once all regulatory approvals have been received.
Comments from Delta Air Lines, LATAM Airlines Group CEOs
Delta Air Lines CEO Ed Bastian said. “This marks an important step in the approval process for our joint venture with LATAM, which will provide customers with the best experience and partner network in the Americas. Just as Delta is committing significant resources to ensure customers feel confident when they travel, we remain equally committed to bringing customers all of the benefits our partnership with LATAM will offer.”
On his part, LATAM Airlines Group CEO Roberto Alvo said, “While we remain focused on providing customers with the confidence to fly and are working towards the safe and responsible recovery of aviation in Latin America, we have not lost sight of our long-term commitments.”
“The CADE’s approval in just two months is a testament to the joint venture’s benefits for customers and for Brazil, marking another important step towards offering customers exceptional connectivity in the Americas. We are confident that these same benefits will be recognized by competition authorities in other countries.”
Since Delta and LATAM announced their initial framework agreement in September 2019, they have achieved a range of customer benefits milestones, including joint frequent flyer mile accumulation/redemption; reciprocal elite benefits; and codeshares on selected routes.
These milestones alone benefit over 30 million LATAM Pass and Delta SkyMiles members, enabling them to earn and redeem miles to 300+ and 145 destinations respectively across five continents.
Additionally, the airlines shared terminals at hub airports and have joint access to 35 Delta Sky Club lounges in the US and five LATAM VIP lounges in the US. For more information, visit latam.com/en_us/about-us/latam-delta-alliance/.
One hiccup that threatened the joint venture occurred when DL had to pay LATAM US$62m for the cancelation of a deal to buy four of the A350 aircraft already delivered, according to a court filing by LA. The first partnership between two companies, signed in 2019, included DL taking over ten of LATAM’s A350 aircraft registered in the Airbus March Orderbook.
It seems now that the airlines are past that impasse and their joint venture is headed towards becoming the largest network in the Americas.
Featured image: Airways files.