eastern023
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Chile: Latam Go Ahead With Merger

Wed Sep 21, 2011 5:42 pm

Free trade tribunal of Chile approved the merger in on LAN and TAM with some antitrust mitigation measures. Please see article. Sorry only in Spanish, I am searching for a piece in English....

In Spanish...

http://www.latercera.com/noticia/neg...ueba-fusion-de-lan-y-tam-con.shtml
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eastern023
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RE: Chile: Latam Go Ahead With Merger

Wed Sep 21, 2011 5:50 pm

Here is from Bloomberg:

http://www.bloomberg.com/news/2011-0...y-chile-court-with-conditions.html

Some of the mitigation measurements are capping the flight allowance for LATAM on the SCL-GRU and SCL-ASU routes. Shares of LAN and TAM rallied this morning.
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aer
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RE: Chile: Latam Go Ahead With Merger

Wed Sep 21, 2011 5:52 pm

Interesting, the court finding states that the airlines will have to give up one of the alliances and will have to give up code shares with the airlines that aren't part of the alliance that Latam choses.

So let the speculation begin, OW or *A?
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SCL767
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RE: Chile: Latam Go Ahead With Merger

Wed Sep 21, 2011 5:59 pm

Quoting eastern023 (Reply 1):

Also, a ruling from Brazil's top antitrust regulator, CADE, is pending. LAN and TAM will soon belong to one global alliance and both airlines are currently analyzing the mitigation measures.

Quote:
The TDLC will also require that the merged company, which will be called Latam Airlines, to withdraw from one of the global alliances LAN and TAM are currently members of. LAN is a member of the Oneworld global alliance and TAM belongs to the rival Star grouping.
For its part, LAN hailed the approval as a "step forward" for the merger process, but said that along with TAM, it would analyze "the impact of court's proposed mitigation measures."
"As soon as possible, LAN and TAM will publicly announce its position on the TDLC's decision and its different mitigation measures," LAN said in a statement.
http://www.foxbusiness.com/industrie...rust-court-approves-lantam-merger/
 
eastern023
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RE: Chile: Latam Go Ahead With Merger

Wed Sep 21, 2011 6:16 pm

At this point there isn’t much room for speculation. The writing is on the wall in regards to TAM leaving Star Alliance for OneWorld after merging with LAN. I think that alliances knew the probabilities and as Star scrambled to lure AV-TA to come to star and some star airlines started agreements with other carriers to fill the void (i.e.: LH signed agreement with Sky Airlines Chile) Meanwhile OneWorld did…..nothing!…why even worry? Even SkyTeam rushed to get the ehemmm….the scrapes… Aerolineas Argentinas …
I think it is for speculation what is going to happen in South America in regards to carriers coming to the region. This is especially true in Chile as TAM will no longer serve as feeder for other Star airlines. I predict seeing more “star” metal in the region now that Star is left without a real partner on the Southern and South eastern (most profitable) part of South America…Once again, just my humble opinion.
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VC10er
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RE: Chile: Latam Go Ahead With Merger

Wed Sep 21, 2011 6:16 pm

Everyone one on A.net has always bet on OW. But I think about how much work UA just put into training TAM.

But, I guess nobody knows what goes on behind closed doors, huh? We could see a shocker and a move to Star Alliance. But if they leave Star then... Star Alliance and the new UA seem really screwed in Brazil (and other parts of latam) no?,

So will UA need to replace the TAM flights from NY with service to GRU, and GIG? Then flights from IAH to major secondary cities in Brazil?

Fortunately all I need is NY to GRU and GIG. UA just needs to compete with JJ's GIG/JFK non-stop.

Also, it said it's the second largest carrier after Air China. After the merger will UA be the largest or not? I know there are 10 ways to be #1 in the airline business. I'm confused.
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commavia
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RE: Chile: Latam Go Ahead With Merger

Wed Sep 21, 2011 6:17 pm

Wow - from the Bloomberg article:

"Conditions include Lan and Tam opening up their frequent flyer program to other airlines, exiting one of their global alliances and capping Santiago-Sao Paulo fares until they exchange four daily slots in Sao Paulo’s Guarulhos airport with other carriers." (bold emphasis mine)

Competition authorities are mandating that the two companies choose one alliance? That is fascinating. I'm interested to understand the court's thinking on how that particular action would substantially impact competition - if anything, I could have seen the court mandating that they stay in different alliances.

Let the speculation now begin (continue, really) as to which alliance it will be. As I've said, the recent dynamics - particularly U.S.-Brazil Open Skies - lead me to believe that the combined LATAM is oneworld's to lose, but I think Star is not totally out of the picture yet.
 
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IrishAyes
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RE: Chile: Latam Go Ahead With Merger

Wed Sep 21, 2011 6:24 pm

Quoting VC10er (Reply 5):
But, I guess nobody knows what goes on behind closed doors, huh? We could see a shocker and a move to Star Alliance. But if they leave Star then... Star Alliance and the new UA seem really screwed in Brazil (and other parts of latam) no?,

...and just imagine the opposite; if they were to choose Star, then O/W would TRULY be screwed in Latin America. There would be nothing - they would fall below even ST.

Quoting commavia (Reply 6):
Competition authorities are mandating that the two companies choose one alliance? That is fascinating. I'm interested to understand the court's thinking on how that particular action would substantially impact competition - if anything, I could have seen the court mandating that they stay in different alliances.

Wouldn't that have been exceptionally difficult? Logistically, at least...
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commavia
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RE: Chile: Latam Go Ahead With Merger

Wed Sep 21, 2011 6:27 pm

Quoting VC10er (Reply 5):
Everyone one on A.net has always bet on OW.

I think the dynamics at play today tend to lean more towards oneworld. First and foremost, the mutual cooperation and investment between AA and LAN is not only far deeper than between United and TAM, but far longer-standing (over a decade). Second, oneworld already has - and either way probably still will have - the strongest non-Latin carrier presence on key traffic flows into/out of South America (i.e., AA will always be the U.S. heavy hitter in the region, and Iberia will always be strong between Europe and at least Spanish South America). And finally, with the U.S. and Brazil now having agreed on a phased approach towards Open Skies, the potential for LAN/TAM to secure an ATI (and possibly JV) with AA between the U.S. and Brazil (along with Chile and perhaps also Colombia and eventually other countries) is enormous - far outweighing the potential with any other prospective U.S. partner.

Quoting VC10er (Reply 5):
But if they leave Star then... Star Alliance and the new UA seem really screwed in Brazil (and other parts of latam) no?,

Not screwed, but United will just have to work harder to capture a portion of the U.S.-Brazil market without much if any direct, on-line (i.e., codeshare) South America feed.

Quoting VC10er (Reply 5):
So will UA need to replace the TAM flights from NY with service to GRU, and GIG? Then flights from IAH to major secondary cities in Brazil?

United will still fly to Brazil from EWR, but likely not JFK.

Quoting IrishAyes (Reply 7):
Wouldn't that have been exceptionally difficult? Logistically, at least

Well of course it would. But when has that ever stopped governments from mandating such things?  Smile

[Edited 2011-09-21 11:27:58]
 
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RE: Chile: Latam Go Ahead With Merger

Wed Sep 21, 2011 6:54 pm

Quoting commavia (Reply 8):
Not screwed, but United will just have to work harder to capture a portion of the U.S.-Brazil market without much if any direct, on-line (i.e., codeshare) South America feed.

Star Alliance will be stronger in North South America with Taca/AV and Copa in the alliance. TACA flies to many US cities including UA hubs. Copa is expanding their US city network too. The Star Allinace needs to coordinate better in Miami as they have done at LHR since TACA, AV, Copa, LH, US and UA all fly there.
 
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RE: Chile: Latam Go Ahead With Merger

Wed Sep 21, 2011 7:00 pm

Quoting jfk777 (Reply 9):
Star Alliance will be stronger in North South America with Taca/AV and Copa in the alliance. TACA flies to many US cities including UA hubs. Copa is expanding their US city network too.

AV Brasil and Aerogal will eventually join Star Alliance alongside AV-TA, plus Copa Airlines and Copa Airlines Colombia. Also, UA is expected to increase flights between North America and South America next year. UA will launch IAH-SCL next year. UA recently launched IAH-LIM this year.
 
eastern023
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RE: Chile: Latam Go Ahead With Merger

Wed Sep 21, 2011 7:15 pm

Quoting commavia (Reply 6):
Let the speculation now begin (continue, really) as to which alliance it will be. As I've said, the recent dynamics - particularly U.S.-Brazil Open Skies - lead me to believe that the combined LATAM is oneworld's to lose, but I think Star is not totally out of the picture yet.

I just can't see LAN in Star, especially now that LAN is trying to make a break into Colombia. LAN is going head on against AV on this one. That was the whole point of buying Aires out. Also there's the Qantas situation, QF is opening swapping EZE for SCL to match OneWorld partner's schedule LAN. I cannot see LAN dropping all this to go with Star.

Quoting commavia (Reply 8):
First and foremost, the mutual cooperation and investment between AA and LAN is not only far deeper than between United and TAM, but far longer-standing (over a decade).

I cannot agree more, LAN and AA have been building this relationship for years. It is also relevant to mention that LAN is taking over TAM not the other way around.

Quoting commavia (Reply 8):
Not screwed, but United will just have to work harder to capture a portion of the U.S.-Brazil market without much if any direct, on-line (i.e., codeshare) South America feed.

Not only Brazil but other thriving Latin American markets such as SCL, LIM and EZE. Traffic numbers are really good coming from these markets.
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kiwiandrew

RE: Chile: Latam Go Ahead With Merger

Wed Sep 21, 2011 7:23 pm

Of course the elephant in the living room is : what happens if the Brazilian authorities agree to the merger but refuse to let JJ join OW? There would be serious anti-competitive issues to be addressed in JJ joining OW - the combination of LATAM with AA and IB in OW has much more serious implications in the Brazilian market than the simple takeover of TAM by LAN does.

If the Brazilian competition authorities veto a move to OW what happens then to JJ? They would be obliged to leave *A under the terms of the agreement ( unless LAN leave OW, which, even as a die-hard *A fan I simply cannot see happening ... and in any case LATAM in *A would be pretty anti-competitive too with CM/P5 and the whole Avianca-Taca group coming on board) but unable to join their new owner in OW. Or does everyone think the regulatory and competition authorities in all applicable countires will simply rubber stamp JJ joining OW without examining or addressing any competition issues at all?
 
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RE: Chile: Latam Go Ahead With Merger

Wed Sep 21, 2011 7:32 pm

Quoting kiwiandrew (Reply 12):

Of course the elephant in the living room is : what happens if the Brazilian authorities agree to the merger but refuse to let JJ join OW? There would be serious anti-competitive issues to be addressed in JJ joining OW - the combination of LATAM with AA and IB in OW has much more serious implications in the Brazilian market than the simple takeover of TAM by LAN does.

Why would the Brazilian authorities block JJ from dumping Star Alliance when LH, AZ, AF/KL, EK, etc. are increasing flights into Brazil? It's funny how you forget to mention TAP's major presence in the Brazilian market and its monopoly on all the routes between Portugal and Brazil. Whereas, JJ and IB are decreasing flights between Brazil and Europe.
 
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RE: Chile: Latam Go Ahead With Merger

Wed Sep 21, 2011 8:21 pm

Quoting SCL767 (Reply 13):
Why would the Brazilian authorities block JJ from dumping Star Alliance when LH, AZ, AF/KL, EK, etc. are increasing flights into Brazil? It's funny how you forget to mention TAP's major presence in the Brazilian market and its monopoly on all the routes between Portugal and Brazil. Whereas, JJ and IB are decreasing flights between Brazil and Europe.

It would be easy to envision the Brazilian authority blocking any substancial cooperation between TAM & AA, or at least imposing severe mitigation, simply because both companies dominate the Brazil-USA market to level that doesn't allow competition. If you separate their current routes, such as MIA-Brazil, JFK-Brazil, MCO-Brazil & DFW-Brazil, you have pretty much 80 % of the market in your hands. What's left for DL, UA & US??

I'm not saying TAM won't move to OW, but I can see lots of limitation regarding the US market. On the European front, I don't see much trouble, since IB has a small presence in Brazil.
 
oksman
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RE: Chile: Latam Go Ahead With Merger

Wed Sep 21, 2011 8:35 pm

For the brazilian international traveller that uses mostly GRU as a main hub, connections to Asia are going to be much more difficult. There are around 10 *A airlines that serve GRU with connections to Asia (SA, LH, LX, TK, SQ, CA, TP, AC, UA, CO), and if JJ joins OW, that would leave us only BA, IB and AA).
 
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IrishAyes
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RE: Chile: Latam Go Ahead With Merger

Wed Sep 21, 2011 8:43 pm

Quoting Dellatorre (Reply 15):
What's left for DL, UA & US??

Plenty.

Outside of the markets you mention, you also have:

Sao Paulo:
-YYZ (AC)
-ATL, DTW, JFK (DL)
-IAH, EWR (CO)
-ORD, IAD (UA)
-LAX (KE)

Rio de Janiero:
-IAH (CO)
-ATL (DL)
-IAD (UA)
-CLT (US)

Brasilia
-ATL (DL)

Comparatively, AA has:
-MIA-BSB/CNF/MAO/REC/GIG/GRU/SSA
-DFW-GIG/GRU
-JFK-GIG/GRU

AA may enjoy a larger share of the US-Brasil traffic relative to other North American carriers, but it's definitely not weighted towards 80%, even with TAM thrown in there. Not sure where you are getting this 80% figure from, because it's far from correct.

Also, DL has tried its hand at secondary Brasilian markets from ATL, and pulled out, so you can't argue that it's been unfairly skewed towards AA.
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SCL767
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RE: Chile: Latam Go Ahead With Merger

Wed Sep 21, 2011 9:05 pm

Quoting oksman (Reply 16):
JJ joins OW, that would leave us only BA, IB and AA).

This is why LAN and/or TAM has to fly to ORD from its hubs. At ORD, AA flies to DEL, NRT, PEK, and PVG, CX flies to HKG, and JL flies to NRT. However, considering that AA's network to Asia is very limited and the carrier is facing financial difficulties, LATAM will have to eventually to fly to Asia as well on their own metal.

IMO, AA is going to have shut up and let LATAM fly into more cities in North America. Hopefully LAN can mend the relationship between AA and JJ since the two carriers do not have a cordial relationship, to say the least.

[Edited 2011-09-23 09:17:49 by SA7700]
 
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RE: Chile: Latam Go Ahead With Merger

Wed Sep 21, 2011 9:06 pm

Quoting VC10er (Reply 5):
After the merger will UA be the largest or not? I know there are 10 ways to be #1 in the airline business. I'm confused.

The term "largest" refers to the market capitalization of LATAM Holdings. The merger is a stock-for-stock merger, meaning the JJ shareholders will receive shares in LATAM as consideration for LA's acquisition of JJ. LA shareholders will simply receive shares in the new LATAM Holdings for their LA shares on a one-to-one basis. In effect, LA is acquiring JJ by issuing new shares. Therefore, on a combined basis, the market capitalization of LATAM will be approximately USD 12 billion, given today's closing stock prices.

Of course, we all know that a series a legal maneuvers are being planned so that LATAM does not violate current Brazilian law governing corporate control and ownership of national carriers. JJ will have PN preference shares [with a non-voting economic interest] and ON common shares [with purely "political" control and no economic interest]. The current Brazilian family owners of JJ will own the majority of the ON shares, while LATAM will own 100% of the ON shares.
 
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acontador
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RE: Chile: Latam Go Ahead With Merger

Wed Sep 21, 2011 9:24 pm

Talking with some people who really should know about what's actually going on in this rather complex operation that is the swap of shares and the new company set-up, they all refer to it as LAN buying TAM rather than a merger. Actually, if you look at the complex shares structure, and more importantly the new board of directors, the influence of LAN in the new merged company surpasses TAM's one. However, in order not to upset neither the Brazilian and Chilean Governments nor the Brazilian public opinion, and in order to make the transition as smooth as possible (we have all seen that it has not been a walk in the park getting the approval by both countries), there is a big smoke screen being employed to hide this fact.

Now, I cannot provide any source nor prove of this, so you can either believe it or not; but I can tell you that everything that has been happening with TAM since the announcement has been fully coordinated with LAN (to say at least) in preparation for TAM joining OW. In the short term both brands will continue to coexist, but I also predict that LAN will slowly try out the response of the public in Brazil towards a LAN Brazil eventually replacing the TAM brand (mid term).
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oksman
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RE: Chile: Latam Go Ahead With Merger

Wed Sep 21, 2011 9:24 pm

Quoting IrishAyes (Reply 18):

You also have CX and JL (out of JFK), QF (soon out of SCL) and potentially even more if AA or LATAM starts flights to ORD or LAX from GRU, or when AA begans serving Asia from MIA.
Quoting SCL767 (Reply 19):

This is why LAN and/or TAM has to fly to ORD from its hubs. At ORD, AA flies to DEL, NRT, PEK, and PVG, CX flies to HKG, and JL flies to NRT. However, considering that AA's network to Asia is very limited and the carrier is facing financial difficulties, LATAM will have to eventually to fly to Asia as well on their own metal.

I see your point, but I guess the quickest way to get to Asia from GRU would be via JNB, and that is a no go, except if JJ starts JNB with the stored A345s, wich I think is very unlikely.
 
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United787
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RE: Chile: Latam Go Ahead With Merger

Wed Sep 21, 2011 9:31 pm

Does anyone think AA's financial situation would weigh into this decision given that one of the biggest reasons to stay with oneworld is AA and MIA? Of course, JAL's situation is also terrible. Isn't QF, BA & IB's financial situation also weak? It seems like CX and LA are the only two financially strong OneWorld majors right now. I am just curious to how that might affect LA's decision, I wouldn't want to stick to a sinking ship...
 
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RE: Chile: Latam Go Ahead With Merger

Wed Sep 21, 2011 9:37 pm

Quoting oksman (Reply 22):
I see your point, but I guess the quickest way to get to Asia from GRU would be via JNB, and that is a no go, except if JJ starts JNB with the stored A345s, wich I think is very unlikely.

That very much depends on where you're going (obviously Asia is a very large continent). For example, JFK lies almost directly on the great circle route between GRU and NRT.
 
SCL767
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RE: Chile: Latam Go Ahead With Merger

Wed Sep 21, 2011 9:37 pm

Quoting oksman (Reply 22):
I see your point, but I guess the quickest way to get to Asia from GRU would be via JNB, and that is a no go, except if JJ starts JNB with the stored A345s, wich I think is very unlikely.

LAN and TAM have both publicly stated that they would like to start new routes to both Europe and Africa via Brazil. LAN will definitely fly to Europe via Brazil. LAN plans on deploying B-787-8s on certain routes to Europe next year; which could free up some A-343s. LAN could fly SCL-GRU-JNB with the A-343s until the B-787-9s start to arrive into LAN's fleet.
 
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RE: Chile: Latam Go Ahead With Merger

Wed Sep 21, 2011 9:43 pm

Quoting steex (Reply 24):
That very much depends on where you're going (obviously Asia is a very large continent). For example, JFK lies almost directly on the great circle route between GRU and NRT.

You are right. Actually I meant southeast asia.
 
SCL767
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RE: Chile: Latam Go Ahead With Merger

Wed Sep 21, 2011 10:14 pm

Visit the LATAM Airlines website at http://www.latamairlines.com/index_en.html and look at the LAN-TAM Investor Presentation (pg.14).
Four primary growth areas for the LATAM network:
1. Brazil to Europe/Africa-Increased Southern cone feed to support new service to Europe
2. Lima to North/Central America-Increased Brazil feed supports new service to US and Mexico
3. New hubs-Potential new hubs could connect to Europe and US
4. Cargo-Combination of LAN’s expertise and TAM’s footprint

[Edited 2011-09-23 09:13:39 by SA7700]
 
LHRFlyer
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RE: Chile: Latam Go Ahead With Merger

Wed Sep 21, 2011 10:21 pm

Quoting United787 (Reply 23):
Does anyone think AA's financial situation would weigh into this decision given that one of the biggest reasons to stay with oneworld is AA and MIA? Of course, JAL's situation is also terrible. Isn't QF, BA & IB's financial situation also weak? It seems like CX and LA are the only two financially strong OneWorld majors right now. I am just curious to how that might affect LA's decision, I wouldn't want to stick to a sinking ship...

The overall financial position of IAG (BA & IB) is strong. It has the lowest net debt of the European majors. As is the financial position of Qantas Group overall.
 
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RE: Chile: Latam Go Ahead With Merger

Wed Sep 21, 2011 10:30 pm

Quoting IrishAyes (Reply 7):
...and just imagine the opposite; if they were to choose Star, then O/W would TRULY be screwed in Latin America. There would be nothing - they would fall below even ST.

Well, AA and IB are quite strong in South America, so oneworld would maintain a decent presence. What they will lack is intra-South America connectivity.

Quoting SCL767 (Reply 10):
AV Brasil and Aerogal will eventually join Star Alliance alongside AV-TA, plus Copa Airlines and Copa Airlines Colombia.

Well, I really don't expect those carriers to add much to the alliance to be honest.

Quoting eastern023 (Reply 11):
I cannot see LAN dropping all this to go with Star.

I share this view.

Quoting kiwiandrew (Reply 12):
the combination of LATAM with AA and IB in OW has much more serious implications in the Brazilian market than the simple takeover of TAM by LAN does.

You are very right. I don't think many people have considered this. it will be interesting to see what CADE makes of this.

Quoting Dellatorre (Reply 15):
It would be easy to envision the Brazilian authority blocking any substancial cooperation between TAM & AA, or at least imposing severe mitigation, simply because both companies dominate the Brazil-USA market to level that doesn't allow competition... I'm not saying TAM won't move to OW, but I can see lots of limitation regarding the US market.

Good point. Like AA-BA before open skies, right? I believe there was no reciprocal mileage accrual on U.S.-U.K. flights as a result of restrictions imposed based on competition grounds. Please correct me if I am mistaken.

Quoting SCL767 (Reply 19):
This is why LAN and/or TAM has to fly to ORD from its hubs. At ORD, AA flies to DEL, NRT, PEK, and PVG, CX flies to HKG, and JL flies to NRT. However, considering that AA's network to Asia is very limited and the carrier is facing financial difficulties, LATAM will have to eventually to fly to Asia as well on their own metal.

I am not sure we will see LA at ORD soon. In a oneworld context, ORD does not add much to LA/JJ. ORD is not AA's largest hub and my uneducated guess is that there is not much high-yield O&D traffic between Chile/Brazil and Chicago. I would expect a LA flight to LHR before a LA flight to ORD. For connections to Asia, QF at SYD and BA at LHR would be better than connections at ORD. There is the ever-present U.S. visa issue. We'll see though. In a Star Alliance context, I think ORD would have a slightly better chance.

Quoting SCL767 (Reply 25):
LAN could fly SCL-GRU-JNB with the A-343s until the B-787-9s start to arrive into LAN's fleet.

Are there enough of them to keep the SCL-MAD-FRA and SCL-AKL-SYD frequencies intact if LA does this?
Next flights: MEX-LAX AM 738, LAX-PVG DL 77L, SHA-PEK CA 789, PEK-PVG CA A332, PVG-ORD MU 77W, ORD-MEX AM 738
 
dellatorre
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RE: Chile: Latam Go Ahead With Merger

Wed Sep 21, 2011 10:38 pm

Quoting IrishAyes (Reply 17):
Plenty.

Outside of the markets you mention, you also have:

Sao Paulo:
-YYZ (AC)
-ATL, DTW, JFK (DL)
-IAH, EWR (CO)
-ORD, IAD (UA)
-LAX (KE)

Rio de Janiero:
-IAH (CO)
-ATL (DL)
-IAD (UA)
-CLT (US)

Brasilia
-ATL (DL)

Comparatively, AA has:
-MIA-BSB/CNF/MAO/REC/GIG/GRU/SSA
-DFW-GIG/GRU
-JFK-GIG/GRU

AA may enjoy a larger share of the US-Brasil traffic relative to other North American carriers, but it's definitely not weighted towards 80%, even with TAM thrown in there. Not sure where you are getting this 80% figure from, because it's far from correct.

Also, DL has tried its hand at secondary Brasilian markets from ATL, and pulled out, so you can't argue that it's been unfairly skewed towards AA.
Quoting IrishAyes (Reply 17):
Plenty.

Outside of the markets you mention, you also have:

Sao Paulo:
-YYZ (AC)
-ATL, DTW, JFK (DL)
-IAH, EWR (CO)
-ORD, IAD (UA)
-LAX (KE)

Rio de Janiero:
-IAH (CO)
-ATL (DL)
-IAD (UA)
-CLT (US)

Brasilia
-ATL (DL)

Comparatively, AA has:
-MIA-BSB/CNF/MAO/REC/GIG/GRU/SSA
-DFW-GIG/GRU
-JFK-GIG/GRU

AA may enjoy a larger share of the US-Brasil traffic relative to other North American carriers, but it's definitely not weighted towards 80%, even with TAM thrown in there. Not sure where you are getting this 80% figure from, because it's far from correct.

Also, DL has tried its hand at secondary Brasilian markets from ATL, and pulled out, so you can't argue that it's been unfairly skewed towards AA.

Comparing what DL+UA+US will have against JJ+AA is silly. American and TAM are by far the leading companies. Serious government intervention will be necessary to prevent both airlines from dictating the market rules. A full ATI cooperation between AA+LA+JJ will leave competition blown away on deep South American markets. The question is: Will DL & UA (US doesn't count) be satisfied with left overs??? How much can you grow into the Brazilian market out of ATL, IAH, IAD, ORD and EWR? Now compare that with JFK, MIA & MCO. Does that answer your question.?

If you're not convinced yet, take a look at last data regarding US-Brazil market, specifically the load factors from both JJ & AA. If you may, compare them also with UA & DL numbers. Any hint?? I could go on here, but I guess I made myself perfectly clear. Now, if you don't wanna accept the facts...

Weekly frequencies of AA+JJ: 132 + 11 (with the daily BSB, CNF and 4 weekly MAO)

Weekly frequencies of DL+US+UA: 68
 
SCL767
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Joined: Sun Feb 26, 2006 6:25 am

RE: Chile: Latam Go Ahead With Merger

Wed Sep 21, 2011 10:43 pm

Quoting EddieDude (Reply 30):
Are there enough of them to keep the SCL-MAD-FRA and SCL-AKL-SYD frequencies intact if LA does this?

LAN has 5 A-343s and will most likely drop the tag-on to FRA on the SCL-MAD route, which will be operated with the B-787s.

Quoting EddieDude (Reply 30):
I am not sure we will see LA at ORD soon. In a oneworld context, ORD does not add much to LA/JJ.

LAN is increasing connectivity throughout the Americas at the LIM Hub. Feed from destinations in the Southern Cone, particularly Brazil, into the LIM hub will allow LAN to offer more intercontinental connections. Similar to CM's new PTY-ORD service which isn't even timed for connections at ORD.
 
EddieDude
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RE: Chile: Latam Go Ahead With Merger

Wed Sep 21, 2011 10:52 pm

Quoting SCL767 (Reply 32):
Similar to CM's new PTY-ORD service which isn't even timed for connections at ORD.

PTY is better located to connect Chicago with South America than LIM. It would be interesting to know how much unserved demand really exists to determine whether a flight to ORD would make sense.
Next flights: MEX-LAX AM 738, LAX-PVG DL 77L, SHA-PEK CA 789, PEK-PVG CA A332, PVG-ORD MU 77W, ORD-MEX AM 738
 
SCL767
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RE: Chile: Latam Go Ahead With Merger

Wed Sep 21, 2011 11:06 pm

Quoting EddieDude (Reply 33):
PTY is better located to connect Chicago with South America than LIM.

LIM is strategically located to offer pax connections traveling to/from the Southern Cone. Flights from the Southern Cone into the LIM hub are shorter than flying via PTY. LAN offers these pax the option to connect to/from CUN, HAV, JFK, LAX, MEX, MIA, PUJ, and SFO via LIM. That list will continue to grow. For example, LP recently applied with the DGAC for frequencies to operate a LIM-GDL service.
 
RCS763AV
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RE: Chile: Latam Go Ahead With Merger

Wed Sep 21, 2011 11:56 pm

I'm glad that the merger was given a go ahead with strict competition measures, as should be. businesses should always be allowed to thrive and consolidate, but always with the customer in mind. Good for LATAM. What puzzles me is that there is the possibility of the Chilean Supreme Court not allowing the merger (third instance?)....do PAL and the others have the possibility of asking for a repeal?

Quoting eastern023 (Reply 11):
I just can't see LAN in Star, especially now that LAN is trying to make a break into Colombia. LAN is going head on against AV on this one. That was the whole point of buying Aires out.

It would have probably been dictated by colombian authorities than LAN Colombia couldn't go to Star alliance either, it would create a de-facto monopoly (all three full service carriers on the same alliance) in the colombian domestic market and most intra-latin america routes from the country.
 
SCL767
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RE: Chile: Latam Go Ahead With Merger

Thu Sep 22, 2011 12:46 am

LAN plans on increasing capacity between LIM and JFK by dropping the SCL-LIM sector on LA530/LA531. Thus, LAN Airlines will offer SCL-JFK daily (B763), LAN Perú will offer LIM-JFK daily (B763) and LAN Ecuador will offer GYE-JFK daily (B763).

Travel to South America with LAN or any of its affiliates you can earn miles even if you are not a LANPASS member:
Fly with LAN and earn miles with any Oneworld frequent flyer program
 
Gemuser
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RE: Chile: Latam Go Ahead With Merger

Thu Sep 22, 2011 1:43 am

Quoting SCL767 (Reply 34):

LIM is strategically located to offer pax connections traveling to/from the Southern Cone.

Pardon my ignorance, but could you please define what you mean by "Southern cone"? Thanks

Gemuser
DC23468910;B72172273373G73873H74374475275376377L77W;A319 320321332333343;BAe146;C402;DHC6;F27;L188;MD80MD85
 
SCL767
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RE: Chile: Latam Go Ahead With Merger

Thu Sep 22, 2011 1:49 am

Quoting gemuser (Reply 37):
Pardon my ignorance, but could you please define what you mean by "Southern cone"? Thanks

The Souther Cone geographically represents parts of Southern and Southeast Brazil, Argentina, Chile, Paraguay, and Uruguay.
 
Gemuser
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RE: Chile: Latam Go Ahead With Merger

Thu Sep 22, 2011 2:07 am

Quoting SCL767 (Reply 38):
The Souther Cone geographically represents parts of Southern and Southeast Brazil, Argentina, Chile, Paraguay, and Uruguay.

So more or less following the Peru-Chile, Bolivia-Chile/Argentina/Paraguay boarders, then due east to about Vitoria, Brazil. Yeah that makes sense and looking at the map I can see where "cone" comes from.
Also given Lima is at about the same longitude as the US east coast I can see what various poster mean about connections.

Gemuser
DC23468910;B72172273373G73873H74374475275376377L77W;A319 320321332333343;BAe146;C402;DHC6;F27;L188;MD80MD85
 
SCL767
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RE: Chile: Latam Go Ahead With Merger

Thu Sep 22, 2011 2:23 am

Quoting gemuser (Reply 39):
So more or less following the Peru-Chile, Bolivia-Chile/Argentina/Paraguay boarders, then due east to about Vitoria, Brazil. Yeah that makes sense and looking at the map I can see where "cone" comes from.

LAN and TAM have a significant presence in the Southern Cone for obvious reasons with subsidiaries in Argentina, Brazil, Chile, and Paraguay. Also, even though Bolivia is technically not in the Southern Cone, LAN and TAM also have a significant presence in Bolivia. For example, LAN operates two daily flights into both LPB and VVI. Both LAN and TAM also operate 4 daily flights into Uruguay, (MVD). From LAN's hub at LIM, LAN operates LIM-COR, LIM-EZE, LIM-GRU, LIM-IGU, LIM-LPB-VVI, *LIM-MVD, LIM-ROS, LIM-SCL, LIM-VVI-LPB.
*Temporarily suspended

From SCL, LAN operates SCL-AEP, SCL-COR, SCL-EZE, SCL-GIG, SCL-GRU, *SCL-FLN, SCL-MDZ, SCL-MVD, *SCL-IQQ-SLA, SCL-IQQ-LPB, SCL-IQQ-VVI, *SCL-USH and TAM offers SCL-ASU and SCL-GRU.
*Seasonal
 
flythere
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RE: Chile: Latam Go Ahead With Merger

Thu Sep 22, 2011 4:11 am

Quoting VC10er (Reply 5):
Also, it said it's the second largest carrier after Air China.

It is based on the market value, simply the stock price times the number of stocks issued. Nto necessarily reflecting the operational size of a carrier.

Quoting commavia (Reply 6):
if anything, I could have seen the court mandating that they stay in different alliances.

Same here, I could only think of the authority mandating them to stay in seperate alliance to keep the present balance.

Quoting kiwiandrew (Reply 12):
There would be serious anti-competitive issues to be addressed in JJ joining SA)">OW - the combination of LATAM with SA)">AA and IB in SA)">OW has much more serious implications in the Brazilian market than the simple takeover of TAM by LAN does.

Well, currently JJ and TP are both in *A and they basically own the traffic between Brazil and Portugal plus a substantial traffic between South America and Europe. JJ going to oneworld is indeed a good redistribution of trans-atlantic (non-US) power.

Quoting oksman (Reply 16):
There are around 10 *A airlines that serve GRU with connections to Asia (SA, LH, LX, TK, SQ, CA, TP, AC, UA, CO), and if JJ joins SA)">OW, that would leave us only BA, IB and SA)">AA).
Quoting IrishAyes (Reply 18):
You also have CX and JL (out of JFK), QF (soon out of SCL) and potentially even more if SA)">AA or LATAM starts flights to ORD or LAX from GRU, or when SA)">AA begans serving Asia from MIA.

      There are many gateways where JJ can connect to other oneworld carriers to different parts of Asia. For instance, JFK, LHR, FRA, CDG, MXP etc.

Quoting SCL767 (Reply 19):
Hopefully LAN can mend the relationship between SA)">AA and JJ since the two carriers do not have a cordial relationship, to say the least.

Guess it will be improved a lot for the introduction of LAN management into JJ's board.
 
SCL767
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Joined: Sun Feb 26, 2006 6:25 am

RE: Chile: Latam Go Ahead With Merger

Thu Sep 22, 2011 4:40 am

Quoting flythere (Reply 42):
There are many gateways where JJ can connect to other oneworld carriers to different parts of Asia. For instance, JFK, LHR, FRA, CDG, MXP etc.

Hopefully LAN will operate a SCL-GRU-JNB service. At JNB, domestic and regional connections are available with MN. MH also operates KUL-JNB and CX operates HKG-JNB. PAX in the Southern Hemisphere would also be able to travel around the globe on OW, i.e. SCL-GRU-JNB on LA/JJ, JNB-SYD on QF, SYD-SCL on QF or SYD-AKL-SCL on LA, SCL-GRU on LA/JJ.
 
SCL767
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RE: Chile: Latam Go Ahead With Merger

Thu Sep 22, 2011 6:20 am

Lufthansa interested in establishing a joint venture with the fusion of LATAM:

Royal Bank of Scotland Analyst, Andrew Lobbenberg, states that Lufthansa Star Alliance could seek the formation of a joint venture with LAN-TAM as a way of dominating the routes from Europe to Latin America.

Link in Spanish:
http://www.travelupdate.com.pe/inter...ablecer-nuevas-alianzas-con-fusion
 
kiwiandrew

RE: Chile: Latam Go Ahead With Merger

Thu Sep 22, 2011 6:34 am

Quoting SCL767 (Reply 44):
Lufthansa interested in establishing a joint venture with the fusion of LATAM:

I can certainly understand LH and *A trying to do everything they can to keep JJ on board, but I simply don't see them managing to convince LAN to jump ship.... and if they did, something would have to give, I freely admit to being a *A fanboy, but a combination of LATAM, Copa and Avianca-Taca group in the same alliance would, IMHO, be just as scary and detrimental to competition as an AA/LATAM tie up.
 
SCL767
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RE: Chile: Latam Go Ahead With Merger

Thu Sep 22, 2011 6:39 am

Quoting kiwiandrew (Reply 45):
I can certainly understand LH and *A trying to do everything they can to keep JJ on board, but I simply don't see them managing to convince LAN to jump ship.... and if they did, something would have to give, I freely admit to being a *A fanboy, but a combination of LATAM, Copa and Avianca-Taca group in the same alliance would, IMHO, be just as scary and detrimental to competition as an AA/LATAM tie up.

I agree, it's very interesting to note that one alliance has remained very quiet about the combination between LAN and TAM and that alliance's carriers are positioning itself in South America by continuously increasing flights into LAN and TAM's hubs...
 
UAL777UK
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RE: Chile: Latam Go Ahead With Merger

Thu Sep 22, 2011 8:26 am

Yep, sadly I think JJ days in Star are numbered. I just cannot see the combined carriers anywhere other than on Oneworld. That said I am a great advocate of "never say never", especially when it comes to the airline industry but I would eat my hat if Star one out here.
 
C010T3
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RE: Chile: Latam Go Ahead With Merger

Thu Sep 22, 2011 11:27 am

Quoting SCL767 (Reply 44):
Royal Bank of Scotland Analyst, Andrew Lobbenberg, states that Lufthansa Star Alliance could seek the formation of a joint venture with LAN-TAM as a way of dominating the routes from Europe to Latin America.

Wow, how original, just like my idea from months ago to form a joint-venture to buy TAP.
 
dellatorre
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RE: Chile: Latam Go Ahead With Merger

Thu Sep 22, 2011 11:30 am

Regarding the whole LIM hub discussion, i personally think LIM has a good potential for a HUB to US west coast, central america and Northwest of South america. With that being said, i also believe it has limitations, specially in Brazil.

So far, the attempts of LAN creating connectivity between LIM and Brazilian destinations have failed, apart from obvious GRU service.
 
simairlinenet
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Joined: Sat Oct 29, 2005 2:24 am

RE: Chile: Latam Go Ahead With Merger

Thu Sep 22, 2011 12:24 pm

Aviation Daily is also reporting additional terms but gave no real details:

Quote:
Chile’s antitrust court will approve LAN Airlines’ merger with Grupo TAM but only if they drop at least one of their global alliances, support cabotage in Chile’s domestic market, return some slot allocations and open their frequent flyer program to other airlines for five years.

-Support cabotage? Isn't this the government's decision, not LAN's?
-Open their frequent flyer program? I've never heard of this move before, and it runs counter to dropping one of the alliances.
 
RCS763AV
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RE: Chile: Latam Go Ahead With Merger

Thu Sep 22, 2011 2:35 pm

Quoting kiwiandrew (Reply 45):
but I simply don't see them managing to convince LAN to jump ship
Quoting UAL777UK (Reply 47):
Yep, sadly I think JJ days in Star are numbered. I just cannot see the combined carriers anywhere other than on Oneworld.
Quoting UAL777UK (Reply 47):
a great advocate of "never say never"

I detect some confusion here, the TDLC in Chile has made them go to oneworld as one of the conditions is staying in a different alliance than AV-TA or GOL. LATAM is 100% going to oneworld now.
 
commavia
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RE: Chile: Latam Go Ahead With Merger

Thu Sep 22, 2011 2:50 pm

Quoting RCS763AV (Reply 51):
the TDLC in Chile has made them go to oneworld as one of the conditions is staying in a different alliance than AV-TA or GOL

Interesting - had not heard that. Do you have a link/source on that?

Quoting RCS763AV (Reply 51):
LATAM is 100% going to oneworld now.

If this is, indeed, such a "100%" done-deal, as you're saying, then why are the trade press and media - as well as, apparently, competing alliances - still treating it as an open competition to win over LAN/TAM?
 
EddieDude
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RE: Chile: Latam Go Ahead With Merger

Thu Sep 22, 2011 2:59 pm

Quoting SCL767 (Reply 34):
LIM is strategically located to offer pax connections traveling to/from the Southern Cone.

My original post was about Chicago to South America, not specifically the Southern Cone. If you recall, we were discussing possible flights to ORD by LA. You simply twist the statements to suit your opinions. Read again:

Quoting EddieDude (Reply 33):
PTY is better located to connect Chicago with South America than LIM.

As I was saying, I am not surprised CM has PTY-ORD flights. ORD is the second largest hub of CM's most important ally. Geographically, PTY is more convenient for Chicago to South America (emphasis on South America) connections, because PTY allows basically to capture all South American traffic without backtracking. On the other hand, connecting at LIM would imply backtracking for passengers originating or whose final destination is in Colombia, Ecuador, Venezuela and MAO. South America is more than the Southern Cone. That said, I believe we won't see LA rushing to ORD too soon. Maybe one day. Obviously I could be wrong.
Next flights: MEX-LAX AM 738, LAX-PVG DL 77L, SHA-PEK CA 789, PEK-PVG CA A332, PVG-ORD MU 77W, ORD-MEX AM 738