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Delta Acquires 20% of LATAM Airlines

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Delta announced this afternoon it acquired 20% of Latin America’s largest airline, LATAM.

“The strategic partnership will unlock new growth opportunities, building upon Delta’s and LATAM’s global footprint and joint ventures worldwide, including Delta’s existing partnership with Aeroméxico,” Delta said in a press release. “With their complementary networks, Delta, LATAM and their partners will be able to offer access to a greatly expanded array of worldwide destinations. Together, the partnership will provide greater customer convenience, a more seamless travel experience and better connect customers with the rest of the world.”

(Here’s hoping the combined 435 destinations may someday create some interesting MQD mileage run possibilities, too!)

Delta’s kicking in $1.9 billion for its stake, as well as another $350 million “to support the establishment of the strategic partnership.” (Do you think Delta will issue payment online with a Chase Freedom card next month and get a teeny, tiny fraction back back, thanks to its 5% PayPal bonus? 😉 )

The mothership will also receive four of LATAM’s A350 aircraft. Plus, they’ll take over LATAM’s commitment to purchase ten more A350s.

LATAM was recently “ranked as the most punctual airline group in the world.” It was also named in a lawsuit filed yesterday by a Cuban-American who alleges LATAM and American Airlines are participating in “trafficking” at Havana’s airport — which the plaintiff claims to own.

“For LATAM,” Delta says, “the transaction will improve free cash flow generation, reduce forecasted debt by over $2 billion by 2025 and improve LATAM’s capital structure, enhancing its ability to execute its long-term strategy.”

–Chris

Cover photo: ©iStock.com/Boarding1Now

Rene’s Points For Better Travel, a division of Chatterbox Entertainment, Inc. has partnered with CardRatings for our coverage of credit card products. Rene’s Points For Better Travel and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities. As an Amazon Associate I earn from qualifying purchases.


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5 Comments

  1. Man, Delta is on a non-stop shopping spree, dumping money everywhere.

    Soon, Delta will be a US-domestic airline and rely on partner to fly internationally…

  2. @Will: I bet they can’t wait for the Black Friday airline specials in a couple of months.

  3. I am curious as to what will happen to Delta’s own A350 backlog. Will these LATAM A350s add to the Delta fleet or merely substitute the pending delivery on Delta’s books?

  4. Delta is getting payback for AA besting it with China Southern leaving Skyteam. Interestingly, Delta still lets people earn SkyMiles on CZ and book CZ tickets with SkyMiles on its website even though CZ is now a AAdvantage partner. and not part of SkyTeam. Award availability is actually much better with Delta than American, and Delta charges twice the miles for the same trips within Asia. Given the relative growth prospects and airline rating of CZ and LATAM, AA wins that trade.

  5. @john I agree with you. The situation was a bit different before. Now that Hong Kong is turmoil, Cathay’s future is very much in doubt. It’s the perfect time for CZ to switch to OneWorld, to eventually take over CX as the leading airline/hub in that region. I think AA’s bid looks like a smart one now.

    It is true Asia has more growth but it also have way more competitors than Latin America. Teaming up with LATAM really allow one to access and control a much a larger portion of that market than the effect CZ would have.

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