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LAXintl
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Delta buying 20% of LATAM

Thu Sep 26, 2019 8:49 pm

Here is a surprise move.

oneworld and AA JV with LATAM goes up in smoke.


Delta Air Lines is expanding its presence in Latin America by spending $1.9 billion for a 20% stake in LATAM, Latin America’s largest airline, a twist for Delta rival American Airlines that has pursued a joint-venture with the Chilean-based carrier to grow revenue in the region.

Foreign ownership rules prevent airlines from buying foreign carriers outright, so airlines have been increasingly turning to minority stakes and revenue-sharing joint ventures to gain exposure to other markets.

LATAM will be leaving the OneWorld alliance, but it was not immediately clear whether it would join SkyTeam, the group that includes Delta and its partners.

Delta said expects to exit its stake in Brazilian carrier Gol, which competes with LATAM in Brazil. Delta’s latest annual filing showed it had a 9% in Gol.


https://www.cnbc.com/2019/09/26/delta-i ... rline.html
From the desert to the sea, to all of Southern California
 
ordbosewr
Posts: 541
Joined: Thu Jun 09, 2011 8:30 pm

Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 8:53 pm

Gotta love the move by DL to both strengthen themselves and hurt a competitor. Well done.

That Gol equity just got valuable to both UA and AA.
 
VCy
Posts: 420
Joined: Tue Dec 04, 2012 8:01 am

Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 8:56 pm

How come LATAM will leave from OneWorld? Would it be logical for them to join SkyTeam with Aerolineas Argentinas as a member?
 
dcajet
Posts: 4116
Joined: Sun Aug 01, 2004 9:31 am

Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 8:57 pm

This is a tectonic shift in Latin America's aviation scene.
"Unattended children will be given espresso and a free kitten"
 
airzona11
Posts: 1536
Joined: Wed Dec 17, 2014 5:44 am

Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 8:57 pm

Get JVs with all your foreign partners, increase stake in said partners, and you have a global airline.
 
LAXdude1023
Posts: 5871
Joined: Thu Sep 07, 2006 3:16 pm

Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 9:03 pm

And there goes AA's relationship with LATAM.
"I dance and laugh among the rotten"
 
dcajet
Posts: 4116
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Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 9:06 pm

VCy wrote:
How come LATAM will leave from OneWorld? Would it be logical for them to join SkyTeam with Aerolineas Argentinas as a member?


May be, just may be, AR will run into the arms of OW and its former owner, Iberia.

Just kiddin'
"Unattended children will be given espresso and a free kitten"
 
jrkmsp
Posts: 158
Joined: Sun May 14, 2017 1:33 am

Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 9:07 pm

This is also a noteworthy part of the deal. Delta's committing to some serious near-term growth in the biggest metal:

As part of the deal, Delta will acquire four Airbus A350 planes and assume LATAM’s commitment to buy 10 more A350s between 2020 and 2025.
 
TYWoolman
Posts: 105
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Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 9:07 pm

Just...WOW. Route chess continues!
 
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lightsaber
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Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 9:08 pm

dcajet wrote:
This is a tectonic shift in Latin America's aviation scene.

Yes. It is also a clear shift of DL away from SkyTeam to JV.

Holy cow, talk about a hand grenade at AA's breakfast table. Oneworld just list South America in one small ($1.9 billion dollar) play. Suddenly DL's low debt strategy show the strategic flexibility it offers. DL coming up with $1.9 billion is easy, how they do it is up to strategy by the accountants (who will have to earn their salary mind you).

Wow, I am stunned, with a smile in admiration.

To the rest of SkyTeam South America just list priority.

Lightsaber
IM messages to mods on warnings and bans will be ignored and nasty ones will result in a ban.
 
globalflyer
Posts: 847
Joined: Tue Dec 20, 2005 4:15 am

Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 9:09 pm

All I can say is WOW!!! I did not see that coming and bravo to DL for that aggressive move!
Landing on every Continent almost on an annual basis!
 
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lightsaber
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Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 9:12 pm

Late, DL is buying LATAMs A350s!

https://mobile.reuters.com/article/amp/idUSKBN1WB2UZ

+$350 in transition help

Off new debt and cash on hand.

Wow... The fact no one would blink loaning DL a few billion must be giving AA and UA pause.

Lightsaber
IM messages to mods on warnings and bans will be ignored and nasty ones will result in a ban.
 
Ishrion
Posts: 1178
Joined: Mon Feb 04, 2019 6:17 am

Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 9:13 pm

What even....

So I assume the AA/LATAM JV is off the line?
 
9252fly
Posts: 950
Joined: Thu Sep 22, 2005 7:19 am

Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 9:14 pm

This is very interesting and surprising news, especially the potential change from OneWorld to SkyTeam. Not too long ago TAM was a member of Star Alliance.
 
HP69
Posts: 180
Joined: Sat Jun 29, 2019 3:04 pm

Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 9:16 pm

This probably means that AA will end SCL service, as it heavily relies of LATAM feed.
 
cessna2
Posts: 345
Joined: Sun Feb 12, 2006 6:16 am

Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 9:18 pm

Also interesting to note that with this announcement DL will acquire 14 A350’s from LATAM to be delivered starting next year.
 
jfern022
Posts: 168
Joined: Sun Aug 21, 2016 9:24 pm

Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 9:20 pm

Wonder if DL deferring the 10 of 25 A350's was in possible anticipation of this?
 
LatinAirliner
Posts: 71
Joined: Thu Jun 07, 2018 1:01 am

Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 9:20 pm

WOW!

Latin American airlines game: ON! Let's see what else is coming. What is going to happen in One World? What is AA doing? Is United going to make a move here, are they going to finally start playing hard a make a move with their deal in Avianca?
LatinAirliner - Nickpo
 
panam330
Posts: 2115
Joined: Sun Mar 14, 2004 11:58 am

Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 9:21 pm

HP69 wrote:
This probably means that AA will end SCL service, as it heavily relies of LATAM feed.

Uh... no. Not gonna happen.
 
FSDan
Posts: 2619
Joined: Mon Jan 03, 2011 5:27 pm

Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 9:22 pm

Crazy!

A codeshare or eventual JV between these two could be formidable! Also cool that DL's taking more 350s in the near term!
This is my signature until I think of a better one.
 
geoshina
Posts: 213
Joined: Tue Dec 09, 2014 8:18 pm

Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 9:24 pm

So:

United will have to recover Avianca
Delta will grab the biggest S. America airline
American Airlines?
 
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Midwestindy
Posts: 4151
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Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 9:25 pm

Yikes, for AA, in fact big yikes. Latin America is a huge part of their network.
Status for 2019/2020: AAdvantage Platinum, Delta Gold, Southwest A-List
 
dmorbust
Posts: 139
Joined: Thu Feb 21, 2013 11:50 pm

Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 9:25 pm

Holy moly this is a big coup. Delta paid quite a premium considering Latam's market cap before this, but wow what a move.
Press release out from DL: https://news.delta.com/delta-and-latam- ... t-americas
 
jrkmsp
Posts: 158
Joined: Sun May 14, 2017 1:33 am

Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 9:25 pm

Looks like American will be buying a recently available 9% stake in GOL.
 
FlyHPN
Posts: 82
Joined: Thu Jan 03, 2019 9:15 pm

Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 9:25 pm

jfern022 wrote:
Wonder if DL deferring the 10 of 25 A350's was in possible anticipation of this?

This quote would say no since discussions only started 3 months ago, but who really knows what was happening when.

the LATAM deal, which Delta started studying about three months ago after an approach by a third party, Bastian said.
 
gen2stew
Posts: 153
Joined: Mon Dec 12, 2011 10:15 pm

Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 9:26 pm

I hope that Dougie sprang for floor and fabric protectant in the new glass palace; I have feeling that Bud Light is being spit everywhere.

What a blow to the former AA crown jewel. Paging Mssrs. Crandall and Dolora
I don't know why blessings wear disguises. If I were a blessing, I'd run around nude!
 
FlyHPN
Posts: 82
Joined: Thu Jan 03, 2019 9:15 pm

Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 9:26 pm

jfern022 wrote:
Wonder if DL deferring the 10 of 25 A350's was in possible anticipation of this?

This quote would say no since discussions only started 3 months ago, but who really knows what was happening when.

It has also been negotiating a 10% stake in Alitalia [CAITLA.UL]. That plan has not changed with the LATAM deal, which Delta started studying about three months ago after an approach by a third party, Bastian said.

-https://mobile.reuters.com/article/amp/idUSKBN1WB2UZ

EDIT: after reading, I can’t tell which deal the 3 months is in reference to.
Last edited by FlyHPN on Thu Sep 26, 2019 9:29 pm, edited 1 time in total.
 
dcajet
Posts: 4116
Joined: Sun Aug 01, 2004 9:31 am

Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 9:26 pm

WIll QATAR exit LATAM now? I would pay to see Delta and Qatar sitting in the same board room!!!
"Unattended children will be given espresso and a free kitten"
 
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Miami
Posts: 6022
Joined: Sat Sep 15, 2012 8:37 pm

Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 9:27 pm

Why is everyone freaking out?

Doubt LATAM leaves OneWorld.
Aviation is proof that given, the will, we have the capacity to achieve the impossible. - Eddie Rickenbacker
 
Ishrion
Posts: 1178
Joined: Mon Feb 04, 2019 6:17 am

Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 9:27 pm

geoshina wrote:
So:

United will have to recover Avianca
Delta will grab the biggest S. America airline
American Airlines?


Lacking both a Canadian and a Latin America partner now... wow.

Now that I think about it, I wonder if this will free up some 77Ws into GRU/EZE for more Asia/Europe :scratchchin:
 
Ishrion
Posts: 1178
Joined: Mon Feb 04, 2019 6:17 am

Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 9:28 pm

Miami wrote:
Why is everyone freaking out?

Doubt LATAM leaves OneWorld.


Did you... read the link?

https://www.cnbc.com/2019/09/26/delta-i ... rline.html

LATAM will be leaving the OneWorld alliance, but it was not immediately clear whether it would join SkyTeam, the group that includes Delta and its partners.


Per Reuters:
Delta will also provide LATAM an additional $350 million to help it transition out of Oneworld and plug into Delta's network.


https://mobile.reuters.com/article/amp/idUSKBN1WB2UZ
 
dmorbust
Posts: 139
Joined: Thu Feb 21, 2013 11:50 pm

Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 9:29 pm

Miami wrote:
Why is everyone freaking out?

Doubt LATAM leaves OneWorld.


According to the article they will be leaving LATAM: https://www.cnbc.com/2019/09/26/delta-i ... rline.html
LATAM will be leaving the OneWorld alliance, but it was not immediately clear whether it would join SkyTeam, the group that includes Delta and its partners.
 
TYWoolman
Posts: 105
Joined: Sat Jun 24, 2017 8:24 pm

Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 9:30 pm

jfern022 wrote:
Wonder if DL deferring the 10 of 25 A350's was in possible anticipation of this?


That's what I was thinking, too. Pretty shrewd. It allows Delta to get more of the plane it wants AND use the A350/LATAM offer as an added strategic sweetner to the pot, playing that against American, who cancelled their order of the plane. Don't think American would ever think of unloading those for LATAM. Delta got brains!
Last edited by TYWoolman on Thu Sep 26, 2019 9:31 pm, edited 1 time in total.
 
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aemoreira1981
Posts: 2883
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Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 9:30 pm

This is way out of left field. There are certain markets where I could see DL leaving some markets on its own metal, along with ATL or MCO to numerous secondary cities on LATAM metal, if a JV is then consummated.

The other beneficiary is probably Virgin Atlantic, as they can switch from GOL to LATAM Brazil as a codeshare partner.

Also, where would DL fly those additional 14 A359s, especially if DL switches some (ex-JJ order book) to a 280t variant?
 
Delta28L
Posts: 245
Joined: Sat Jul 28, 2018 2:00 pm

Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 9:30 pm

TAM division might be the first airline to be part of all three major alliances
 
T773ER
Posts: 283
Joined: Tue Dec 05, 2006 7:13 am

Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 9:31 pm

Miami wrote:
Why is everyone freaking out?

Doubt LATAM leaves OneWorld.



They're leaving OneWorld as part of the deal.
 
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Miami
Posts: 6022
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Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 9:31 pm

Ishrion wrote:
Miami wrote:
Why is everyone freaking out?

Doubt LATAM leaves OneWorld.


Did you... read the link?

https://www.cnbc.com/2019/09/26/delta-i ... rline.html

LATAM will be leaving the OneWorld alliance, but it was not immediately clear whether it would join SkyTeam, the group that includes Delta and its partners.


Per Reuters:
Delta will also provide LATAM an additional $350 million to help it transition out of Oneworld and plug into Delta's network.


https://mobile.reuters.com/article/amp/idUSKBN1WB2UZ


Again, I doubt it.
Aviation is proof that given, the will, we have the capacity to achieve the impossible. - Eddie Rickenbacker
 
dmorbust
Posts: 139
Joined: Thu Feb 21, 2013 11:50 pm

Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 9:31 pm

My mind is still blown. When I first read this I thought it was a very belated April Fool's joke. This has got to be the biggest coup in partnerships/alliances in a very long time.
 
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janders
Moderator
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Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 9:32 pm

Wonder what will the DL pilots say? :stirthepot: :stirthepot:

I saw in the other thread, the pilots won their arbitration that the Korean Pacific JV was in violation of their contract.


Anyhow -- good play by Delta. Bet folks in Dallas are wondering how the heck that happened. They better come up with a plan B or C.
"We make war that we may live in peace." -- Aristotle
 
Ishrion
Posts: 1178
Joined: Mon Feb 04, 2019 6:17 am

Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 9:33 pm

Miami wrote:
Ishrion wrote:
Miami wrote:
Why is everyone freaking out?

Doubt LATAM leaves OneWorld.


Did you... read the link?

https://www.cnbc.com/2019/09/26/delta-i ... rline.html

LATAM will be leaving the OneWorld alliance, but it was not immediately clear whether it would join SkyTeam, the group that includes Delta and its partners.


Per Reuters:
Delta will also provide LATAM an additional $350 million to help it transition out of Oneworld and plug into Delta's network.


https://mobile.reuters.com/article/amp/idUSKBN1WB2UZ


Again, I doubt it.


The fact that two credible sources are reporting it, even with a valid statement of "Delta will also provide LATAM an additional $350 million to help it transition out of Oneworld and plug into Delta's network." isn't enough to convince you? Even the fact that Delta is buying one-fifth of LATAM?
 
braniff2hav
Posts: 182
Joined: Mon Nov 02, 2015 9:20 pm

Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 9:35 pm

Wow... just wow. This is how you build a global airline .. Never thought little 'ol Delta Air Lines from Monroe, Louisiana would be what it is today .. and headed to tomorrow.
 
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Miami
Posts: 6022
Joined: Sat Sep 15, 2012 8:37 pm

Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 9:35 pm

Ishrion wrote:
Miami wrote:


The fact that two credible sources are reporting it, even with a valid statement of "Delta will also provide LATAM an additional $350 million to help it transition out of Oneworld and plug into Delta's network." isn't enough to convince you? Even the fact that Delta is buying one-fifth of LATAM?


Nope. I’ll believe it when I see it.
Aviation is proof that given, the will, we have the capacity to achieve the impossible. - Eddie Rickenbacker
 
braniff2hav
Posts: 182
Joined: Mon Nov 02, 2015 9:20 pm

Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 9:36 pm

It's all spelled out here by Delta Air Lines: https://mailchi.mp/delta/xtaftmm3ol?e=790b05834b
 
User avatar
Miami
Posts: 6022
Joined: Sat Sep 15, 2012 8:37 pm

Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 9:37 pm

American statement, in part: “... this change in partnership is not expected to have a significant financial impact to American, as the current relationship provided less than $20 million of incremental revenue to American...”
Aviation is proof that given, the will, we have the capacity to achieve the impossible. - Eddie Rickenbacker
 
BNAMealer
Posts: 245
Joined: Sat Jul 27, 2019 8:03 pm

Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 9:37 pm

AA is in big trouble, you can't let these kind of things happen, especially when you have the weakest partners/jv's to begin with (with the exception of BA). Time for a big management shakeup in Dallas.
 
dcajet
Posts: 4116
Joined: Sun Aug 01, 2004 9:31 am

Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 9:38 pm

Miami wrote:
Ishrion wrote:
Miami wrote:

Again, I doubt it.


The fact that two credible sources are reporting it, even with a valid statement of "Delta will also provide LATAM an additional $350 million to help it transition out of Oneworld and plug into Delta's network." isn't enough to convince you? Even the fact that Delta is buying one-fifth of LATAM?


Nope. I’ll believe it when I see it.


OK. Go ahead and bury your head in the sand. What part of Delta giving LATAM US$350 million to transition out of OW needs further explanation?
"Unattended children will be given espresso and a free kitten"
 
socalflyer00
Posts: 6
Joined: Sat Dec 31, 2016 6:19 am

Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 9:40 pm

It seems like LATAM has A350-1000's on order. Will Delta be adding the -1000 to its fleet or taking delivery of more -900s?
 
cessna2
Posts: 345
Joined: Sun Feb 12, 2006 6:16 am

Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 9:41 pm

Ishrion wrote:
Miami wrote:


The fact that two credible sources are reporting it, even with a valid statement of "Delta will also provide LATAM an additional $350 million to help it transition out of Oneworld and plug into Delta's network." isn't enough to convince you? Even the fact that Delta is buying one-fifth of LATAM?

In all fairness the DL press release says, "Delta will also invest $350 million to support the establishment of the strategic partnership." Nowhere in the release does it say LATAM will leave OneWorld.
 
braniff2hav
Posts: 182
Joined: Mon Nov 02, 2015 9:20 pm

Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 9:43 pm

And note that there is scant mention of Sky Team in Delta's press release ... except way down in the 'disclaimer' section. I think Sky Team is soon to be d.e.d.
 
TYWoolman
Posts: 105
Joined: Sat Jun 24, 2017 8:24 pm

Re: Delta buying 20% of LATAM

Thu Sep 26, 2019 9:46 pm

My dinner got cold! Anyway, this can be seen as Delta strategically entrenching in South America in the same vain as American with JAL across the Pacific. The Japan/JV's gave way for American to be a force across the Pacific, but at Delta's expense. With the Delta/Latam deal, this will put pressure on American's cost in the region as they will realize flying their own metal all over will get a bit expensive, relative to the competing metal-neutral alliances.
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