LATAM, AA, IAG seek new partnership

LATAM, American Airlines, British Airways and Iberia are shaking things up for 2016. LATAM – the newly rebranded entity comprised of Chile’s LAN Airlines and Brazil’s TAM Lineas Aéreas S.A. – said it will apply for antitrust immunity with the U.S. Department of Transportation and the relevant authorities in South America to form a joint venture with America Airlines. Likewise, LATAM has signed an agreement for a joint business agreement with IAG, the parent company of British and Iberia, for flights between South America and Europe.

All carriers involved are members of the One World Alliance. By forming these new partnerships, the goal is for each to extend their reach into previously untapped markets. While there was no explicit mention of cargo in the proposals, there may be significant airfreight opportunities, due to the use of widebody belly space on the routes.

LATAM and IAG, combined, would offer more than 100 South American destinations and 87 more in Europe. The pair also intends to launch new routes as well. It is estimated that the deal will give the two carriers control of more than 30 percent of the market between Europe and South America.

The agreement with American Airlines would involve flights between the United States, Canada and six South American countries. American and IAG already have an alliance, regarded as the industry’s most profitable partnership for business travel, according to Bloomberg.

Intercontinental deals between airlines require regulatory approvals in each country involved.