Delta buys 20% of LATAM, which will exit oneworld

[Nisho]

I don't think they will plug the hole in OW

Yeah, OW is doomed in South America


One thing that amazes me is that in this day of smartphones and anonymous leaking, not one whiff of these negotiations leaked of what constitutes a multi-billion dollar deal across two continents and two high profile companies.

 

[levelnine]

A massive downgrade to the value of the OneWorld alliance. The biggest in quite some time.

How I wish Australia had a Star Alliance domestic carrier...

 

[Quickstatus]

I don’t think it will be an issue for OZ-SCL passengers

 

[levelnine]

I don’t think it will be an issue for OZ-SCL passengers

Depends what Ed Bastian's strategy is.

He could easily force LATAM into breaking its ties with QF and to codeshare with VA instead to strengthen the position of VA.

Indeed, this is a huge opportunity for VA. If LATAM kills its ties with QF, that will be a huge blow to its South American expansion strategy, which relies heavily on codeshares to destinations beyond SCL. If VA takes over these codeshares, it could become the airline of choice for Australia-South America flyers.

 

[TomJones]

Well that is a complete shock!

As others say, this creates a massive, gaping hole in the OW network.

As others have said, it makes sense that whether codesharing continues with QF (or even if a future JV happens) I guess depends on what Delta wants.

All remains to be seen.

Edit: on reflection, this is a massive loss to AA. Their JV with LATAM was very important for their South American network. Losing them to a direct competitor would hurt.

 

[pauly7]

Delta CEO: SkyTeam Failed

The Atlanta-based carriers is shifting away from an alliance focus and “taking a different approach” where they use local airline brands that can operate in local markets around the world and influence those airlines to be more efficient. - Delta CEO Ed Bastian

Hardly a different and definitely not original approach.... they could call Etihad and see how this approach is working for them

 

[JohnM]

This blindsided me. I’ve used LA a lot in the 15 DONExs I’ve had over the last 15 years. JFK-SCL or reverse is a sector I have used a lot over the years. I also quite like LA. But at least AA flies to many places in S America.

That said, though, I have covered most of the things I want to do in S America, so that is a blessing. Usually if I included S America in a DONE, it produced a DONE5.

For those contemplating DONExs, however, it may not be quite as bad as first glance may suggest. Domestic J is either non-existent or is actually a premium economy substitute on LA. Typically, I did not use DONEx sectors within S America as I regarded them as wasted (like Euro J). It was better, IME, to use the DONEx to get into and out of S America, then buy separate flights within the zone.

For example, SCL-EZE, a route that I imagine many would consider including in a DONEx, is a short flight with no or limited full J. It isn’t worth using a DONEx sector for that IMO.

The biggest bummer that does immediately come to mind is that the change will take away the capacity to get to Easter Island on a DONEx.

As a counterpoint to this bombshell, however, I am looking forward to seeing how much use I can make of Royal Air Maroc joining OW to alleviate the major OW hole that has existed forever in Africa.

 

[dajop]

Hardly a different and definitely not original approach.... they could call Etihad and see how this approach is working for them

Yes, but Etihad basically had a fundamental rule of only investing in basket cases (Jet, Air Berlin, Alitalia), putting aside VA debate for now of whether they were a basket case when EY invested. I think Delta are a little choosier about who they invest in.

 

[esseeeayeenn]

Hardly a different and definitely not original approach.... they could call Etihad and see how this approach is working for them

The approach is misguided for the following reason (among others).
The whole point of an alliance is to attract PAX through the offer of seamless travel with consistent benefits across a network of different carriers which is much bigger than the network of any one individual carrier.
Whenever this "different approach" is taken, travel is never seamless and benefits are never consistent.
More importantly, it is never easy for potential PAX to identify the benefits.
For example, look at the number of queries in these forums about lounge access for VA PAX travelling on partner airlines.
So the arrangements fail to acheive the core objective of attracting more PAX.
I know alliances like OneWorld also struggle to acheive the goals of seamlessness and consistency.
They fail at times. There are threads on here about that as well.
But they succeed in creating the expectation of seamlessness and efficiency, and that expectation is more commercially important than the reality.

The hole this will create in OW may create flow on problems for QF.
There is much to like about VA - especially The Business, which in my view is a superior product to QF J.
It can also be easier to acheive status with Velocity than with QFF.
Personally, it is OW which has kept me loyal to QF.
I love being able to walk into the Wing First Lounge in HKG and be treated as a VIP by the wonderful CX staff.
I love having access to the "green lanes" in EU airports.
Having recently qualified for long service leave I was looking forward to a RTW trip in the next couple of years.
If these alliance benefits are severely eroded I would reconsider my choice of domestic carrier.
AFTER I qualify for LTG!

 

[Nisho]

If LATAM kills its ties with QF, that will be a huge blow to its South American expansion strategy, which relies heavily on codeshares to destinations beyond SCL.

Anyone fancy Jetstar South America coming along?

 

[Lynda2475]

According to Executive Traveller (formerly AusBT):

While LATAM remains a Oneworld member, there'll be no change to frequent flyer arrangements including the earning and redeeming of points, airport lounge access and other perks for frequent flyers.

This includes benefits for Oneworld Ruby, Sapphire and Emerald cardholders of Oneworld alliance airlines when travelling with LATAM, as well at LATAM's own tiered frequent flyers, who can expect the same treatment when jetting about with Oneworld member airlines until LATAM finalises its exit.

Approached by Executive Traveller for comment, a Qantas spokesperson confirmed that “there are no changes to our codeshare with LATAM as a result of recent announcements.”

“Qantas and LATAM have agreed that the bilateral agreement we have works well for customers and we will look for opportunities to enhance it in future.”

 

[AIRwin]

“Qantas and LATAM have agreed that the bilateral agreement we have works well for customers and we will look for opportunities to enhance it in future.”

Enhance it?!

 

[RooFlyer]

quoting ... [Qantas] will look for opportunities to enhance it in future.

Enhance it?!

Yep, we're screwed.

 

[JohnM]

Enhance it?!

The scariest word in the limited - and often misspelt - QF lexicon .

 

[ovtraveller]

Todays’ notification about Latam’s ‘In due course ‘ leaving the One World alliance is a bit of a blow having just booked and paid for return travel in Feb 2020 to Buenos Aires from Melbourne. I assume I can kiss my potential points and Status Credits goodbye? I hope my good friends at QFF services might assure me that they will honour the One World commitments and the code sharing agreement........but I am not counting on it.

 

[AIRwin]

Refer post #31:

Delta buys 20% of LATAM, which will exit oneworld

I don't think they will plug the hole in OW Yeah, OW is doomed in South America 😁 One thing that amazes me is that in this day of smartphones and anonymous leaking, not one whiff of these negotiations leaked of what constitutes a multi-billion dollar deal across two continents and two high...

www.australianfrequentflyer.com.au

 

[Silvia]

I don't think it will happen overnight but from my understanding after reading the news, it seems they may honour previous reservations.

What has happened in the past when airlines have left alliances is that they set a reasonable cut-off date to finish off all commitments within the partnership.

The interesting part of this will be to see if QF tries to do some independent agreement for South American destinations with LATAM. Having flown from Aus to South America often, I do get the impression these flights are popular. Plenty of people connect from Santiago onwards a different country.

 

[SydneySwan]

Big blow. Flying around South America is not cheap which means reward flights on LATAM are generally good value redemptions. I would expect there will be a notice period so hopefully another 6 - 12 months with LATAM still part of OW. Maybe even longer.

 

[serfty]

who can expect the same treatment when jetting about with Oneworld member airlines until LATAM finalises its exit.

And after the exit is finalised?

 

[opusman]

And after the exit is finalised?

Status matches all round!