Delta and LATAM’s joint venture has received preliminary approval from the Administrative Council for Economic Defense (CADE). The Brazilian competition authority approved the trans-American joint venture on Thursday, paving the way for deeper cooperation between Delta and LATAM’s Brazilian branch.
Delta Air Lines and LATAM received approval from the Brazilian competition authority for their joint venture. Photo: Getty Images
The approval of the joint venture from Brazil
Delta and LATAM have received preliminary approval without conditions from CADE. Delta and LATAM first presented the joint venture on July 14, 2020. After reviewing free competition considerations and the market conditions, the competition authority greenlit the joint venture.
The joint venture agreement is designed to connect the carriers’ route networks. Delta and LATAM do not have much overlap, aside from the New York to Sao Paulo route. Miami, a major gateway for LATAM into the US, will become one of the global gateways for the airline, with Delta adding some more nonstop flights out of Miami to destinations across the United States.
A LATAM Brazil Boeing 767. LATAM is South America’s largest airline. Photo: Getty Images
Beyond that, Delta can offer passengers flights down to Brazil on its own metal with connections onward on LATAM’s planes.
LATAM and Delta executives upbeat
Delta CEO Ed Bastian stated the following in a press release viewed by Simple Flying:
“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.”
Atlanta is Delta’s leading hub for flights down to South America. Photo: Getty Images
LATAM Airlines Group CEO, Roberto Alvo, stated the following:
“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 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.”
LATAM does not currently fly to Atlanta. Photo: Getty Images
Still more steps to go
Aside from the 15-day appeal period for Brazil, Delta and LATAM need to continue to implement their joint venture across South America. LATAM has affiliates in Chile, Colombia, Ecuador, and Peru that Delta is targeting with the joint venture. Out of Atlanta, Delta flies to the main economic and tourism centers across South America, such as Bogota, Lima, Santiago, Buenos Aires, Sao Paulo, and Quito.
The airlines are working to lay the groundwork in the remaining countries for further codeshares, frequent flier benefits, lounge access, and, in the future, cooperation on route planning to offer a comprehensive trans-American network.
LATAM wanted an American partner to help shore up its position in South America. Photo: Getty Images
Chile is where LATAM and American Airlines ran into issues with getting a joint venture. In the wake of that, with Avianca’s proposed joint venture with Copa, Avianca, and possibly Azul, LATAM seriously wanted a partner in the United States. Thus, the partnership with Delta came about.
With the aviation world rocked by an awful crisis, partnerships are becoming more and more critical. With South America being a market where, historically, Delta has not been as strong as its competitors, this new partnership with LATAM should hopefully help close the gap.
Are you glad to see the Delta-LATAM joint venture approved in Brazil? Let us know in the comments!