Lets throw a curve ball into this and AA buys 21%?.....

socalflyer00 wrote:

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?

I'd guess they'll be converted to the -900 model. Never say never, but would seem likely.

In Brazil now Gol becomes the free agent so AA would do well to partner with them.

For the rest of Latin America here how it would look if LATAM shifts.

American - Interjet(?)
Delta - AeroMexici, Argentinas, LATAM
United - Aeromar, Avianca, Azul, Copa

What is going to happen at MIA? LATAM's presence was huge, basically a mini hub, will that switch over to ATL or will Delta start trying to build feed out of MIA to compliment the O+D. This is probably the craziest news I've heard in awhile.

AA’s response:

American Airlines remains the largest U.S. carrier to both Latin and South America and we look forward to competing and growing in this region of the world.

http://news.aa.com/news/news-details/20 ... p-NET-ALP/

panam330 wrote:

HP69 wrote:

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

Uh... no. Not gonna happen.

MIA is a significantly larger local market to much (all?) of South America than is ATL, and AA's MIA hub is well connected to every city in North America with appreciable demand to South America. So, AA should not have trouble supporting at MIA everything DL presently does from ATL and a bit more. There might be some routes that struggle ex-DFW, but it's a decent local market and a strong hub and can likely support at least the biggest cities in South America. I don't expect that LA is that helpful on some of the secondary routes to non-LATAM countries, like MIA-MVD, so perhaps that stuff will stick around as well.

There are, though, network questions for both carriers. For stuff like IND-PMC, DL becomes a much more competitive option and AA a much less competitive option (IND-ATL-SCL-PMC rather than IND-DFW/MIA-SCL-PMC). But I expect that LATAM's operation at MIA won't change that much because it's a huge local market. Does the opportunity to connect passengers to LATAM mean that stuff like JAX/MSY-MIA makes sense (ATL is a backtrack for those passengers)? What about service from the growing hubs and focus cities to MIA? I don't know the answer. I do think that this will probably lead to DTW-GRU coming back and maybe LAX-EZE/LIM/GRU on DL metal.

BA and IB are also the other big losers in South America: they have lost their local partner. And what a partner, with airlines in 6 countries in the continent. VS, AF & KL will win big, especially VS with JJ as a local partner.

lightsaber wrote:

dcajet wrote:

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

Are you sure? Back in the '90s when the alliances emerged, it was some kind of common wisdom that they could only survive on the base of mutual cross-ownership. In that sense Delta would just be reshaping SkyTeam instead of leaving it.

AA has stated their business with LATAM is only $20 million.

dcajet wrote:

BA and IB are also the other big losers in South America: they have lost their local partner. And what a partner, with airlines in 6 countries in the continent. VS, AF & KL will win big, especially VS with JJ as a local partner.

Especially since Virgin Atlantic recently announced GRU...

eal wrote:

What is going to happen at MIA? LATAM's presence was huge, basically a mini hub, will that switch over to ATL or will Delta start trying to build feed out of MIA to compliment the O+D. This is probably the craziest news I've heard in awhile.

I wouldn't be surprised if LATAM's Miami presence caught Delta's eye! If you think about it, Latam's #1 U.S. destination is probably Miami. So by default, Delta became American's #1 competitor there.

Phoenix757767 wrote:

AA has stated their business with LATAM is only $20 million.

Huh?

In their JV application, they talk about producing an estimated $273 million in annual consumer benefits on $1.3bil additional revenue!

Ishrion wrote:

dcajet wrote:

BA and IB are also the other big losers in South America: they have lost their local partner. And what a partner, with airlines in 6 countries in the continent. VS, AF & KL will win big, especially VS with JJ as a local partner.

Especially since Virgin Atlantic recently announced GRU...

This feels like a DL JV partner play.

Seriously, the implications are huge! Well played DL. If really done in 3 months, wow!

14 new A350s should appease the pilots.

Lightsaber

So this is what Delta probably meant when saying that Skyteam failed. They are instead buying up shares across different airlines to build their own alliance.

Anyway, AA is the biggest loser here, but this will also be a huge blow for other OW airlines, mainly BA/IB. Huge win for AFKL though.

LAXintl wrote:

Phoenix757767 wrote:

AA has stated their business with LATAM is only $20 million.

Huh?

In their JV application, they talk about producing an estimated $273 million in annual consumer benefits on $1.3bil additional revenue!

$20 million

I’d love to hear the explanation as to how that partnership is only worth 20 million dollars....

braniff2hav wrote:

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.

Hmm, no. More like a global alliance. Only flights operated by Delta metal under the Delta brand count as far the Delta network goes.

LAXintl wrote:

Phoenix757767 wrote:

AA has stated their business with LATAM is only $20 million.

Huh?

In their JV application, they talk about producing an estimated $273 million in annual consumer benefits on $1.3bil additional revenue!

That would be if there was a JV, there isn’t.

Ed and his crew hit a home run , I like Delta's strategy of investing in their partners, puts them ahead in the global game.

C. E. Woolman would be proud.

Wowwww !!!! I'm shocked !!! Seems like big changes are coming ....
As a LATAM Brasil employee I really don't know what to think especially regarding the A350`s because it means our fleet will shrink right ?
We all knew that since since the beggin of the merger TAM x LAN the chilean party never really wanted the A350`s in the fleet so this is not so odd for us but my question is WHATS IS GOING TO REPLACE THOSE FRAMES ?!?!?!?

- LA might order new Wide Body Aircrafts aka 787 ?!?!?
- LA will give up some routes in favor of Delta`s metal ?!?

Thoughts ?!?!?!

Seems like they really pulled a fast one on aa here. Even so, this could look horrible 5 years from now. That's a lot of money to pay for an airline that loses money. Now DL got 2 airline investment in Latin America on weak finances.

If it works out, it will certainly level their playing field with aa in Latin America.

Phoenix757767 wrote:

AA has stated their business with LATAM is only $20 million.

Maybe so. But I wonder what the figure will be when asked what the cost is by having Delta more relevant across all of South America, over the next 10 years! You would have to think this adds more SkyMiles members in the region.

So now we know they real reason Delta had announced a record number of F/A hires for 2020. With 14 A350 coming on board. Hmm

LAXintl wrote:

In Brazil now Gol becomes the free agent so AA would do well to partner with them.

For the rest of Latin America here how it would look if LATAM shifts.

American - Interjet(?)
Delta - AeroMexici, Argentinas, LATAM
United - Aeromar, Avianca, Azul, Copa

Avianca has nothing yet signed with United. United doesn't have a single stock in Avianca, they still belong to German Efromovich, and he still is able to sell them to whoever he wants.

Avianca's stocks are going to climb tomorrow.

I HAVE SO MANY QUESTIONS

I'm curious to see how this is going to play out. Of course we should expect to see some LATAM service to ATL and hopefully for the sake of Delta's workforce beefed up Delta service to the big hubs GRU (and will Delta move to Terminal 3?? though it may not matter as many of LATAM's domestic ops are in Terminal 2), LIM, SCL.

I'm curious to see long term what this *might* mean for Delta at Miami--and I wonder if this played a role in Delta discontinuing MCO-GRU. No matter how much LATAM feeds the big Delta hubs, South Florida will continue to be their largest US operation just due to sheer demographics, and will this organically lead to more Delta service? This is the biggest question mark as the opportunity for integration with AA was golden.

I'm curious about these A350. Where are they coming from? Are they the 14 A350-1000s that LATAM Brasil has on order? Wikipedia (always the best source...) shows LATAM Brasil having 9 A359s with 3 on order. The remaining LATAM members have a mostly Boeing longhaul fleet--would this be the intent to standardize long haul LATAM as a Dreamliner shop?

Apparently the Chilean Supreme Court blocked an attempt by LATAM to have closer ties with AA and BA. Will Delta's smaller presence in South America be less of a hindrance to a close relationship?

VCy wrote:

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

Aerolineas Argentinas is pretty inconsequential to Delta's and SkyTeam's network for reasons of management and politics (read chronic mismanagement and a possible return of CFK) , and geography. BA, a wonderful city, is not well positioned to serve a lot of transit traffic.

lightsaber wrote:

Ishrion wrote:

dcajet wrote:

BA and IB are also the other big losers in South America: they have lost their local partner. And what a partner, with airlines in 6 countries in the continent. VS, AF & KL will win big, especially VS with JJ as a local partner.

Especially since Virgin Atlantic recently announced GRU...

This feels like a DL JV partner play.

Seriously, the implications are huge! Well played DL. If really done in 3 months, wow!

14 new A350s should appease the pilots.

Lightsaber

I Suspect those will not be 14 growth airframes. I imagine that we will see the reduction in the oldest 777 airframes as a result. There is talk of a RFP for a simplification of the wide body fleet. Management wants to streamline widebodies and as of 2 weeks ago i was hearing the desire a possible 777or 787 future order

I don't see LA joining Skyteam. No way AR and 4M will ever be allowed to be in the same alliance.

Packson wrote:

lightsaber wrote:

Ishrion wrote:

Especially since Virgin Atlantic recently announced GRU...

This feels like a DL JV partner play.

Seriously, the implications are huge! Well played DL. If really done in 3 months, wow!

14 new A350s should appease the pilots.

Lightsaber

I Suspect those will not be 14 growth airframes. I imagine that we will see the reduction in the oldest 777 airframes as a result. There is talk of a RFP for a simplification of the wide body fleet. Management wants to streamline widebodies and as of 2 weeks ago i was hearing the desire a possible 777or 787 future order

1) why would they remove newly refurbished 777s, which aren’t that old, especially relative to the 763s (rumored to not get the refresh), and
2) a 777...so 777X or end of line 77W? Either way, that capacity would be very uncharacteristic of DL.

Big vote of confidence in the A350...put to rest the constant comments that DL were not satisfied with them! The A350-1000 would be a great addition for DL.

[quote="eal"]

What is going to happen at MIA? LATAM's presence was huge, basically a mini hub, will that switch over to ATL or will Delta start trying to build feed out of MIA to compliment the O+D. This is probably the craziest news I've heard in awhile.[quote]

Wouldn't surprise me if MIA becomes DL's newest focus city. This is huge.

LAXintl wrote:

In Brazil now Gol becomes the free agent so AA would do well to partner with them.

For the rest of Latin America here how it would look if LATAM shifts.

American - Interjet(?)
Delta - AeroMexici, Argentinas, LATAM
United - Aeromar, Avianca, Azul, Copa

AA largely left without a chair to sit on.

Goes from best to potentially worst Latin America coverage.

Phoenix757767 wrote:

AA has stated their business with LATAM is only $20 million.

Maybe add an addition 0

AA certainly has more money going back and forth with OW partner LATAM than $20mil. That's merely $55,000/day, or maybe 10 premium tickets!

usflyer msp wrote:

I don't see LA joining Skyteam. No way AR and 4M will ever be allowed to be in the same alliance.

Could AR be moved? Or could there be a carve out for routes where they overlap such that AR is effectively neutered from the alliance?

LAXintl wrote:

Phoenix757767 wrote:

AA has stated their business with LATAM is only $20 million.

Huh?

In their JV application, they talk about producing an estimated $273 million in annual consumer benefits on $1.3bil additional revenue!

They don’t have a JV yet.

From AA’s press release:

“Further, 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, and the proposed joint business without Chile would have provided limited upside.”

- What happens to QR's investment in LATAM?

cokepopper wrote:

So now we know they real reason Delta had announced a record number of F/A hires for 2020. With 14 A350 coming on board. Hmm

Those birds are over 5 years so they don’t account for anything but a small amount of that flying.


ILL

Wow this is unexpected. More South American flights for DL incoming?

Stunning move. Wonder if this shift will spark United / Star Alliance to forge even closer ties with AD, perhaps even entry to Star Allince.

As per AJC....."With plans for an expansion in service to South America, Delta plans to expand in Miami. For years, Delta has used its Atlanta hub as a gateway to Latin America. The LATAM partnership means “it’s going to be a balance” between Miami and Atlanta, Bastian said.

sorry, don't know how to provide a link as of yet.

Can we start listing some potential new JV routes? This should make DL's decision to resume JFK-BOG actually work this time, and I could also see DL add LAX-BOG. LATAM will send their own metal to ATL - I see ATL as the real winner here getting a lot more service to South America -and DL may add JFK-SCL or JFK-LIM (but probably not though). Anything else come to mind?

I also wonder what affect this will have on Aeromexico? I expect new LATAM/Aeromexico codeshares. I fear those two are too dominant and overlapping in their respective markets to receive antitrust immunity themselves, but maybe in some markets like Colombia they could.

The message about the $20M from AA was to the market; trying to control the narrative about impact to earnings.

tlecam wrote:

The message about the $20M from AA was to the market; trying to control the narrative about impact to earnings.

I believe the SEC would have an issue with that.

Packson wrote:

lightsaber wrote:

Ishrion wrote:

Especially since Virgin Atlantic recently announced GRU...

This feels like a DL JV partner play.

Seriously, the implications are huge! Well played DL. If really done in 3 months, wow!

14 new A350s should appease the pilots.

Lightsaber

I Suspect those will not be 14 growth airframes. I imagine that we will see the reduction in the oldest 777 airframes as a result. There is talk of a RFP for a simplification of the wide body fleet. Management wants to streamline widebodies and as of 2 weeks ago i was hearing the desire a possible 777or 787 future order

Aren't they in the process of giving the 777 fleet a new interior?

Phoenix757767 wrote:

“Further, 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, and the proposed joint business without Chile would have provided limited upside.”

Key word -- "incremental".

Does not mean the LATAM partnership revenue is $20mil.

Total revenue might be $200mil as a random example, but the incremental portion (in otherwords net) for AA is $20mil.

Its actually laughable to believe LATAM a OW member only produces $55,000 a day in revenue between a key partner like AA.

N292UX wrote:

Wow this is unexpected. More South American flights for DL incoming?

Well, for starters we may see a second daily ATL-GRU.
They could upguage JFK-GRU
They could make JFK-GIG daily or year round
They could resume ATL-BSB
Increase frequency on ATL-LIM

janders wrote:

Wonder what will the DL pilots say?

I

They ought to be happy to get 14 A350s between now and 2025 that were not otherwise part of the plan.

Do you have other thoughts to add?

Wowsers! Unbelievable - had to do a double take to make sure this wasn’t some joke. Are we seeing the first shots of a full frontal assault to recapture MIA and possibly DFW by DL? Mind blown...

dmorbust wrote:

Can we start listing some potential new JV routes? This should make DL's decision to resume JFK-BOG actually work this time, and I could also see DL add LAX-BOG. LATAM will send their own metal to ATL - I see ATL as the real winner here getting a lot more service to South America -and DL may add JFK-SCL or JFK-LIM (but probably not though). Anything else come to mind?

I expect we'll see some LAX/SLC - Colombia/Ecuador/Peru routes, although that might be 3-5 years out.

timfucius wrote:

- What happens to QR's investment in LATAM?

That's what I'm wondering...

What might be the likelihood of QR and DL joining forces?

QR and DL's missions don't really overlap, it's more DL's partners KL and AF that it might conflict with....

I do very much hope that DL take the a35K. Their premium select product is quite good, even if they have skimped on economy class pitch.

lightsaber wrote:

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

Planespotters.net shows LATAM with 9 A350s. It strikes me as odd to leave them with just 5 - when they also have a bunch of 788s and 789s.

HP69 wrote:

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

Why would AA stop flying to Santiago ? That is a silly comment. AA flies from Miami to Santiago from the largest destination in the USA. AA doesn't need LATAM feed to make their Chile flights viable. I think LATAM has more to lose in Miami because Delta is much smaller in Miami then AA. What will be interesting to see is what happens in Atlanta and JFK.

LATAM will almost certainly fly to ATL from SCL & GRU. LATAM will move its JFK flights out of the AA terminal at JFK, makes room for BA, and move in with DL at Terminal 4. Boston to GRU with an ever expanding Delta would be quite the statement. Will LATAM fly to Detroit from Sao Paulo ? Why not it would be an interesting synergy. How will this change AF & KLM in Latin America?

LATAM has hubs at many of the important Latin airports flown by the European airline group. LATAM changing allegiances has many possibilities and many consequences.

MIflyer12 wrote:

They ought to be happy to get 14 A350s between now and 2025 that were not otherwise part of the plan.

Do you have other thoughts to add?

At loss of how many frames, or flying??

I doubt the A350s will be net gain. DL has lots of older widebody types that need to leave, so it likely ends up being a wash. Its pretty clear Delta to date as wilfully moved flying in favor of JV partners at expense of its own crews.

As negotiations session last week, DL had to pull their JV proposal and put out a new counter-proposal as it was made clear by ALPA there will be no agreement unless company honors its existing contract that is already in violation of in regards to JVs and commits that DL pilots will see equitable growth as part of all JVs.

Now if Delta were to go out and order 100 additional widebodies, that could be considered a positive step forward.