Moderators: jsumali2, richierich, ua900, PanAm_DC10, hOMSaR

  • 1
  • 3
  • 4
  • 5
  • 6
  • 7
  • 18
 
winginit
Posts: 3049
Joined: Sat Feb 23, 2013 9:23 pm

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 2:56 am

flyinghippo wrote:
Looks like we're going to have ONE airline for the world... DL/LATAM/AM/VS/KL/KE/AF/MU. They'll probably add VA soon after!

That covers pretty much all the world except for Africa


You know especially with this news today it's all the more telling that DL is snapping up stakes in all of their partners except the Australian one that always has a chunk of it for sale... yikes.
 
Ishrion
Posts: 3062
Joined: Mon Feb 04, 2019 6:17 am

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 2:58 am

Anyone else remember this from the application? https://www.flightglobal.com/news/artic ... nt-457245/

American and LATAM, in addition to a stronger competitive position, say the joint venture will allow them to "increase frequencies, upgauge routes and add new flights". Potential new routes include Miami to Belo Horizonte and Recife in Brazil, and Sao Paulo Guarulhos to Austin and San Jose (California).

Irony.
 
danvs
Posts: 208
Joined: Sat Jul 04, 2009 3:34 am

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 2:59 am

How will LA replace the A350s that will go to DL? With DL's +20yo B763? :cry:
 
hondah35
Posts: 72
Joined: Wed May 16, 2007 1:55 pm

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 3:01 am

This is all going to blow up in Delta's face. Too many hands in too many cookie jars and ALL of them exposed to a downturn in flying due to a recession.
 
jumbojet
Posts: 2957
Joined: Mon Dec 29, 2003 3:01 am

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 3:01 am

Ishrion wrote:
Anyone else remember this from the application? https://www.flightglobal.com/news/artic ... nt-457245/

American and LATAM, in addition to a stronger competitive position, say the joint venture will allow them to "increase frequencies, upgauge routes and add new flights". Potential new routes include Miami to Belo Horizonte and Recife in Brazil, and Sao Paulo Guarulhos to Austin and San Jose (California).

Irony.


The date on that article is very recent, April 10, 2019.

American Airlines and LATAM Airlines Group promise millions of dollars in consumer benefits in their application to US authorities for an immunised joint venture.
The Oneworld Alliance carriers tout up to $273 million in annual benefits from their proposed tie up that would cover flights between the USA and Brazil, Chile, Colombia, Paraguay, Peru and Uruguay if approved, in an application to the US Department of Transportation on 3 April. Benefits include improved connectivity, better passenger amenities and even new routes.
 
jumbojet
Posts: 2957
Joined: Mon Dec 29, 2003 3:01 am

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 3:07 am

SteelChair wrote:
jumbojet wrote:
SteelChair wrote:

Not immediately. But with the 359s that were already ordered and deferred, it provides a road map to retire the 777s in 5-7 years, or by 2025, which is what the agreement says for the other 10 from LATAM. The 747s were retired about that long after their interior mods weren't they?


They start taking deliveries as soon as next year. No way its even close to tying into the retirement of the 777's.


I thought only 4 of these 350s were coming next year.


From the Delta Newsroom

Delta will acquire four A350 aircraft from LATAM and has agreed to assume LATAM’s commitment to purchase 10 additional A350 aircraft to be delivered beginning in 2020 through 2025, supporting Delta’s ongoing fleet transformation.

Acquire: To buy or obtain. To me this means DL will be buying as part of the 1.9 billion deal 4 of LATAM's 359's.

Now, as far as the commitment to purchase 10 additional 350's, I wonder if DL can convert those orders to more 339 NEO's and accelerate the 763 ER retirements?
Last edited by jumbojet on Fri Sep 27, 2019 3:13 am, edited 2 times in total.
 
Packson
Posts: 30
Joined: Fri Jan 01, 2016 2:27 am

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 3:08 am

TTailedTiger wrote:
If Doug Parker wanted to play hardball he would negotiate fifth freedom rights and do their own flying. It wouldn't be very economical but it would really put the DL pilots in an uproar to see AA pilots doing their own flying in a territory outside of the US.


Why would Delta pilots give a damn if AA pilots fly within the countries of South America?
 
TTailedTiger
Posts: 2705
Joined: Sun Aug 26, 2018 5:19 am

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 3:14 am

Packson wrote:
TTailedTiger wrote:
If Doug Parker wanted to play hardball he would negotiate fifth freedom rights and do their own flying. It wouldn't be very economical but it would really put the DL pilots in an uproar to see AA pilots doing their own flying in a territory outside of the US.


Why would Delta pilots give a damn if AA pilots fly within the countries of South America?


Delta's pilots are already upset about their flying being farmed out to partners. To see their counterparts at AA getting an expanded network would just make things even more tense.
 
rbavfan
Posts: 3633
Joined: Fri Apr 17, 2015 5:53 am

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 3:16 am

cessna2 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?

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.



But Americans press release would indicate they are leaving.
http://news.aa.com/news/news-details/20 ... p-NET-ALP/
 
VictorKilo
Posts: 260
Joined: Wed Jul 05, 2006 7:39 am

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 3:17 am

So it appears that four Latam Brazil 359’s were leased to Qatar in the Spring of 2017 - two returned to Latam in the fall of 17 and two are still with Qatar. Perhaps those are the four planes going to Delta??
 
Ishrion
Posts: 3062
Joined: Mon Feb 04, 2019 6:17 am

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 3:21 am

rbavfan wrote:
cessna2 wrote:
Ishrion 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.



But Americans press release would indicate they are leaving.
http://news.aa.com/news/news-details/20 ... p-NET-ALP/


Oneworld has already confirmed LATAM is leaving.
 
questions
Posts: 2337
Joined: Thu Sep 15, 2011 4:51 am

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 3:21 am

Corpsnerd09 wrote:
questions wrote:
Phoenix757767 wrote:
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/


What is the difference between Latin America and South America?


Mexico, Guatemala, Honduras, El Salvador, Costa Rica, Nicaragua, Panama, Dominican Republic, Cuba, Puerto Rico...


Thanks.
 
oschkosch
Posts: 598
Joined: Mon Oct 29, 2018 3:41 pm

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 3:21 am

Wasn't it popular belief here on a.net that DL is unhappy with the A350?

Gesendet von meinem SM-G950F mit Tapatalk
:stirthepot: :airplane: "This airplane is designed by clowns, who in turn are supervised by monkeys" :airplane: :stirthepot:
 
jumbojet
Posts: 2957
Joined: Mon Dec 29, 2003 3:01 am

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 3:22 am

jumbojet wrote:
SteelChair wrote:
jumbojet wrote:

They start taking deliveries as soon as next year. No way its even close to tying into the retirement of the 777's.


I thought only 4 of these 350s were coming next year.


From the Delta Newsroom

Delta will acquire four A350 aircraft from LATAM and has agreed to assume LATAM’s commitment to purchase 10 additional A350 aircraft to be delivered beginning in 2020 through 2025, supporting Delta’s ongoing fleet transformation.

Acquire: To buy or obtain. To me this means DL will be buying as part of the 1.9 billion deal 4 of LATAM's 359's.

Now, as far as the commitment to purchase 10 additional 350's, I wonder if DL can convert those orders to more 339 NEO's and accelerate the 763 ER retirements?


Forget that last comment, LATAM's 10th 359 is awaiting its first flight, can that wind up being a DL bird?
 
rj1385
Posts: 121
Joined: Mon Apr 23, 2007 9:09 am

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 3:24 am

I assume that the A350s will be used by Delta to connect to LATAM more. Or is it Possibly the LATAM flight from JFK to GRU simply becomes the Delta flight with flesh paint?
 
Sascha81
Posts: 12
Joined: Sat Dec 13, 2014 10:18 am

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 3:24 am

Hello good morning, what does it mean now for AR? Should they stay in Skyteam or should they change to Star Alliance or Oneworld?
 
questions
Posts: 2337
Joined: Thu Sep 15, 2011 4:51 am

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 3:28 am

Route map. This is more impressive than I would have thought.

https://www.latam.com/en_ue/about-us/map-of-destinations/europa-oceania-and-asia/
 
xiaotung
Posts: 1087
Joined: Fri Jan 06, 2006 7:58 pm

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 3:34 am

Sascha81 wrote:
Hello good morning, what does it mean now for AR? Should they stay in Skyteam or should they change to Star Alliance or Oneworld?


Now that AV has lost both Brazil and Argentina domestic market permanently, it wouldn't be too terrible for AR to jump to *A. Perhaps NZ could also sponsor them. For oneworld, I imagine their closest win would be to get CZ as soon as possible. Of course, it's not easy given CX who has it's own problems with many predicting they will be absorbed by CA as a matter of time. It's really hard to predict.

It wouldn't surprise me at this point if UA tomorrow buys VA.
 
TWA85
Posts: 359
Joined: Tue Feb 14, 2012 10:06 pm

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 3:35 am

AA's only remaining option is to start flying fifth freedom flights between South American countries and purchase stakes in smaller local airlines to feed the fifth freedom flights.

The bigger question here is who could be next? The AA/LAN partnership is over 20 years old. If DL can pull LATAM away from AA, who else can DL pull away from AA and even UA?
 
max999
Posts: 1244
Joined: Fri Dec 09, 2005 11:05 am

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 3:39 am

From a consumer's perspective this sounds like great news because it injects a healthy dose of competition into the market. Delta is disrupting AA's existing market leading position between the US and Latin America. More competition usually means better value for consumers.

AA's strategy was to reinforce their market leader position by leveraging an anti competitive JV with the biggest airline in South America... Instead of competing, AA was content to squeeze profits from consumers by joining the two biggest players in the market. The Chilean authorities saw right through this scheme and correctly denied the JV application.
Last edited by max999 on Fri Sep 27, 2019 3:45 am, edited 1 time in total.
All the things I really like to do are either immoral, illegal, or fattening.
 
User avatar
Lemieux
Posts: 175
Joined: Wed Mar 15, 2017 12:55 pm

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 3:44 am

Question becomes, how does AA and subsequently their shareholders respond?
Full time internet idiot. A319/20/20NEO/21/332/333, Boeing 733/734/737/738/752/753/762/763/772/773/788/789, CR2/7/9, de Havilland DHC-8, Embraer 140/145/175/190, MD82/88.
 
MAH4546
Posts: 26287
Joined: Wed Jan 24, 2001 1:44 pm

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 3:47 am

MIflyer12 wrote:
capejet wrote:
I think DL wll begin adding more MIA flights, building up a small focus city, probably new MIA-MCO/DCA/BOS/RDU/SEA/CMH at first, and perhaps CUN/AUA/MBJ as well. But in the long term I think they want to be even larger at MIA. How many gates are available at MIA? In the long term could DL build a new terminal at MIA?


Sorry, but I don't see DL buying a 20% stake in LATAM as the strategy to grow MIA. They'll only get 20% of the profits. I don't see them growing MIA for LATAM connections at the expense of the ATL hub, either.

The guy who wants to see LATAM in Atlanta? Yes, that will happen. But not too often - to keep DL pilots happy.


Absolutely Delta is not doing this to grow MIA. But I bet a result of it will be Delta growing in MIA. It’s the biggest missing piece for them. There’s little reason they can’t replicate what they have done in other markets in Miami, and this helps.

Another inevitable result is that AA will need to grow in South America organically. Belo Horizonte will be the first to resume, is my guess. Then Bolivia and Paraguay.
a.
 
Ishrion
Posts: 3062
Joined: Mon Feb 04, 2019 6:17 am

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 3:55 am

TWA85 wrote:
AA's only remaining option is to start flying fifth freedom flights between South American countries and purchase stakes in smaller local airlines to feed the fifth freedom flights.

The bigger question here is who could be next? The AA/LAN partnership is over 20 years old. If DL can pull LATAM away from AA, who else can DL pull away from AA and even UA?


They could pull away anyone at this point... Did anyone actually see this coming? Completely unexpected.
 
777Mech
Posts: 1018
Joined: Sun Sep 11, 2016 10:54 pm

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 4:11 am

I wonder how long it took to hammer out the details of this deal? Surely JJ was talking to both AA and DL at the same time.

Was AA in any position to put forward money like DL has?
 
TWA85
Posts: 359
Joined: Tue Feb 14, 2012 10:06 pm

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 4:16 am

Ishrion wrote:
TWA85 wrote:
AA's only remaining option is to start flying fifth freedom flights between South American countries and purchase stakes in smaller local airlines to feed the fifth freedom flights.

The bigger question here is who could be next? The AA/LAN partnership is over 20 years old. If DL can pull LATAM away from AA, who else can DL pull away from AA and even UA?


They could pull away anyone at this point... Did anyone actually see this coming? Completely unexpected.


I agree. Could DL now turn its sights on JL? They have already tried it once. Could they do it again? DL is much stronger now than they were back then (although they were pretty strong back then too). JL is healthier now and can better afford exiting the Oneworld Alliance. Yes DL has its JV with KE, however the two could incorporate JL into the JV, similar to the DL/AF/KL/VS Trans-Atlantic JV.

AA could find itself in real trouble in the not so distant future. It needs their strategic partners (IAG, JL, and LATAM prior to today) to remain competitive and survive. AA MUST become more aggressive globally or it will fall behind its competitors.
 
User avatar
chepos
Posts: 7273
Joined: Sat Dec 02, 2000 9:40 am

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 4:16 am

TWA85 wrote:
AA's only remaining option is to start flying fifth freedom flights between South American countries and purchase stakes in smaller local airlines to feed the fifth freedom flights.

The bigger question here is who could be next? The AA/LAN partnership is over 20 years old. If DL can pull LATAM away from AA, who else can DL pull away from AA and even UA?


Why would AA have to start flying 5th freedom flights? Again, AA managed flying to Latin America way before LAN became a partner.

Before TAM and LAN merged , AA had no local partner in Brazil as TAM was a Star partner. Yet, AA managed to make Brazil work.


Sent from my iPhone using Tapatalk
Fly the Flag!!!!
 
MSPNWA
Posts: 3698
Joined: Thu Apr 23, 2009 2:48 am

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 4:17 am

max999 wrote:
From a consumer's perspective this sounds like great news because it injects a healthy dose of competition into the market. Delta is disrupting AA's existing market leading position between the US and Latin America. More competition usually means better value for consumers.

AA's strategy was to reinforce their market leader position by leveraging an anti competitive JV with the biggest airline in South America... Instead of competing, AA was content to squeeze profits from consumers by joining the two biggest players in the market. The Chilean authorities saw right through this scheme and correctly denied the JV application.


I'm not so sure on the competitive aspect as a whole. Yes, this does break up the leading share, but AA/LA's JV was shot down. If a DL/LA JV is approved, that's a big loss to consumers, and it's debatable that the gain by breaking up AA/LA isn't offset by the loss of an independent DL.

But let's say it is consumer friendly. It creates question marks about the value this is to DL. LATAM is struggling as it is, and now they're facing AA's competition and are losing the shine off the gold nugget that is MIA. This has to be about the future gain of a JV.
 
Packson
Posts: 30
Joined: Fri Jan 01, 2016 2:27 am

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 4:17 am

TTailedTiger wrote:
Packson wrote:
TTailedTiger wrote:
If Doug Parker wanted to play hardball he would negotiate fifth freedom rights and do their own flying. It wouldn't be very economical but it would really put the DL pilots in an uproar to see AA pilots doing their own flying in a territory outside of the US.


Why would Delta pilots give a damn if AA pilots fly within the countries of South America?


Delta's pilots are already upset about their flying being farmed out to partners. To see their counterparts at AA getting an expanded network would just make things even more tense.


No it wouldn't. Two separate companies, each not affected by the other. Delta pilots are wanting the management team to honor their Scope and negotiate a fair balance to all future codesharing and JV's. So far its been lopsided and American or any other American company flying in South America has no bearing on Delta pilots future flying.
 
global1
Posts: 520
Joined: Fri Dec 19, 2014 5:31 pm

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 4:19 am

Wow!

Delta growth in Miami?

More connectivity Latin America-USA via Hartsfield?

Plugging in the Aeroméxico network with LATAM? What might that look like. It would be great if someone on here oils do an overlay of the Delta/WestJet/Aeroméxico/LATAM networks.

What a juggernaut the Delta/Northwest combination has evolved into.

This is definitely not your grandfather’s Delta! It hasn’t been since the merger. They’ve evolved into a tectonic force in the industry.
Last edited by global1 on Fri Sep 27, 2019 4:39 am, edited 1 time in total.
 
Adipocere
Posts: 323
Joined: Sat Jun 27, 2015 9:35 am

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 4:30 am

TWA85 wrote:
If DL can pull LATAM away from AA, who else can DL pull away from AA and even UA?


IB, QF out of this LA deal?? If one were to set stretch their horizons - maybe BA and JL down the line?
 
RainerBoeing777
Posts: 567
Joined: Wed Jun 21, 2017 3:43 pm

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 4:37 am

Scotron12 wrote:
DeSpringbokke wrote:
So which A350s will Delta be purchasing from LATAM or we will have to wait for specifics on that on tomorrow morning's call?


According to WIKI ( I know I know ) :white: they have 3x A350-900s still to be delivered & 14x A350-1000s on order.


LATAM Brazil modified the orders of Airbus A350XWB, the order was like this (17) Airbus A350-900XWB and (8) Airbus A350-1000XWB
CX - JL - LH - KE - KL - SQ - QR - QF - TG - UA
 
User avatar
chepos
Posts: 7273
Joined: Sat Dec 02, 2000 9:40 am

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 4:38 am

Adipocere wrote:
TWA85 wrote:
If DL can pull LATAM away from AA, who else can DL pull away from AA and even UA?


IB, QF out of this LA deal?? If one were to set stretch their horizons - maybe BA and JL down the line?


So, you honestly think regulators would approve an Atlantic JV that includes, AF/KLM/BA/IB/DL and VS (remember they already own part of VS) BA/IB are a packaged deal as they are owned by IAG- EI as well so they would come along.

In the South Pacific they already have a JV with VA, but you suggest bringing QF along. All that would raise some eyebrows.


Sent from my iPhone using Tapatalk
Fly the Flag!!!!
 
User avatar
lightsaber
Moderator
Posts: 20600
Joined: Wed Jan 19, 2005 10:55 pm

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 4:38 am

hondah35 wrote:
This is all going to blow up in Delta's face. Too many hands in too many cookie jars and ALL of them exposed to a downturn in flying due to a recession.

How will this blow up in Delta's face? DL's debt is low. If there is a recession, to they transferred profit from a competitor to themselves.

DL has JV'd hands into many cookies jars cheaply. By having a diversified base, this limits their downside exposure. If Delta had UA's or AA's debt, you would have a point.

https://seekingalpha.com/article/412712 ... cy-airline
Delta's operating leases have a market value of under $10 billion, while American has operating leases of slightly over $10 billion, and United has operating leases of over $13 billion. This means that the operating lease-adjusted debt/equity ratio for Delta Air Lines is 52%, compared to 150% for United Airlines and 153% for American Airlines. Delta is only one-third as leveraged as its two competitors. As with debt/equity above, this lack of leverage will enable Delta to better-adjust to changing market conditions.

Delta has equity. That means they are very nimble right now. AA and UA cannot manuever like DL.
https://www.fool.com/investing/2018/03/ ... money.aspx

When you lease adjust the debt, DL has about $20 billion bin debt while less profitable AA has about $35 billion in lease adjusted debt.

Delta will take about 1 year to generate the free cash flow to pay for this deal:

https://finance.yahoo.com/quote/DAL/cash-flow/

American is spending so much on new aircraft, they lack cash flow:

https://finance.yahoo.com/quote/AAL/cash-flow/

United has good cash flow, just too much debt to pull off a deal like this:
https://finance.yahoo.com/quote/ual/cash-flow/

DL isn't taking any major risk doing this deal. I see a ROI.

Lightsaber
Winter is coming.
 
TTailedTiger
Posts: 2705
Joined: Sun Aug 26, 2018 5:19 am

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 4:39 am

Packson wrote:
TTailedTiger wrote:
Packson wrote:

Why would Delta pilots give a damn if AA pilots fly within the countries of South America?


Delta's pilots are already upset about their flying being farmed out to partners. To see their counterparts at AA getting an expanded network would just make things even more tense.


No it wouldn't. Two separate companies, each not affected by the other. Delta pilots are wanting the management team to honor their Scope and negotiate a fair balance to all future codesharing and JV's. So far its been lopsided and American or any other American company flying in South America has no bearing on Delta pilots future flying.


Uh, you're not paying attention. Other airlines get brought up all the time in negotiations. When United and their pilots were working out a new contract the Delta pilot payscales and benefits were used as a baseline for what they wanted.
 
downdata
Posts: 589
Joined: Wed Feb 17, 2016 2:38 am

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 4:40 am

Title should also include LAN leaving OW as its just as important
Last edited by downdata on Fri Sep 27, 2019 4:42 am, edited 2 times in total.
 
downdata
Posts: 589
Joined: Wed Feb 17, 2016 2:38 am

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 4:41 am

braniff2hav wrote:
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.


Skyteam is fine, they didn't lose an entire continent coverage in one press release. OW on the other hand, is definitely not fine.
 
global1
Posts: 520
Joined: Fri Dec 19, 2014 5:31 pm

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 4:45 am

Envision for a moment Delta cooperating with Emirates( I know... but it’s a crazy industry and anything is possible and Delta has always seemed to find Qatar and their CEO particularly toxic) What would you have? Checkmate?
Last edited by global1 on Fri Sep 27, 2019 5:07 am, edited 2 times in total.
 
TWA85
Posts: 359
Joined: Tue Feb 14, 2012 10:06 pm

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 4:46 am

chepos wrote:
TWA85 wrote:
AA's only remaining option is to start flying fifth freedom flights between South American countries and purchase stakes in smaller local airlines to feed the fifth freedom flights.

The bigger question here is who could be next? The AA/LAN partnership is over 20 years old. If DL can pull LATAM away from AA, who else can DL pull away from AA and even UA?


Why would AA have to start flying 5th freedom flights? Again, AA managed flying to Latin America way before LAN became a partner.

Before TAM and LAN merged , AA had no local partner in Brazil as TAM was a Star partner. Yet, AA managed to make Brazil work.


Sent from my iPhone using Tapatalk


Because DL/LATAM will be MUCH stronger than LAN and TAM were before they became partners to AA. Without feed from LATAM, AA will have a harder time filling its flights to/from South America. AA will have to rely overwhelmingly on the United States point of sale now. DL and LATAM will have the advantage of sales forces on both continents. AA will only have a sales force in the United States. Without an intra-South American network, AA will not be able to compete with LATAM and Delta for lucrative corporate contracts. Prior to LAN and TAM becoming partners to AA, the North America-South America market was fragmented and no airline(s) offered a network with a large connecting presence on both ends. Each airline primarily focused on the point of sale in their home country. AA will definitely survive in South America, however it likely wont be the bread and butter it once was. South America has always been the market where AA was the leader against DL and UA. Now AA will be weaker than the two in Europe, Asia, and South America.
 
MSPNWA
Posts: 3698
Joined: Thu Apr 23, 2009 2:48 am

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 4:50 am

lightsaber wrote:
If Delta had UA's or AA's debt, you would have a point.

DL isn't taking any major risk doing this deal. I see a ROI.


They do have that debt. Don't forget DL's unfunded pension liability, or discount DL's older fleet, which is like a hidden debt load that will put pressure on cash flow for the next 10 years or so. DL's debt position isn't great either, but they currently make the high profit to counterbalance.

North of $2B isn't a large sum for a company as large as DL, but there's plenty of risk, as a positive ROI isn't guaranteed. There's much safer plays for the money, like improving the profitability of your own business. Hey, give DL credit for taking a risk.
 
MAH4546
Posts: 26287
Joined: Wed Jan 24, 2001 1:44 pm

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 4:58 am

TWA85 wrote:
chepos wrote:
TWA85 wrote:
AA's only remaining option is to start flying fifth freedom flights between South American countries and purchase stakes in smaller local airlines to feed the fifth freedom flights.

The bigger question here is who could be next? The AA/LAN partnership is over 20 years old. If DL can pull LATAM away from AA, who else can DL pull away from AA and even UA?


Why would AA have to start flying 5th freedom flights? Again, AA managed flying to Latin America way before LAN became a partner.

Before TAM and LAN merged , AA had no local partner in Brazil as TAM was a Star partner. Yet, AA managed to make Brazil work.


Sent from my iPhone using Tapatalk


Because DL/LATAM will be MUCH stronger than LAN and TAM were before they became partners to AA. Without feed from LATAM, AA will have a harder time filling its flights to/from South America. AA will have to rely overwhelmingly on the United States point of sale now. DL and LATAM will have the advantage of sales forces on both continents. AA will only have a sales force in the United States. Without an intra-South American network, AA will not be able to compete with LATAM and Delta for lucrative corporate contracts. Prior to LAN and TAM becoming partners to AA, the North America-South America market was fragmented and no airline(s) offered a network with a large connecting presence on both ends. Each airline primarily focused on the point of sale in their home country. AA will definitely survive in South America, however it likely wont be the bread and butter it once was. South America has always been the market where AA was the leader against DL and UA. Now AA will be weaker than the two in Europe, Asia, and South America.


Sorry, but you’re nuts.

This is bad for AA, and kar for the course with how poorly the airline is ran, but it’s not devastating. AA will need to re-enter markets like Belo Horizonte, which it’ll easily be able to do.
a.
 
LipeGIG
Posts: 5063
Joined: Tue May 03, 2005 7:33 am

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 5:00 am

Cubsrule wrote:
LipeGIG wrote:
LatinAirliner wrote:

Wow that was fast!

Just tried booking a flight from MIA to POA and it routes me: MIA-CUN-PTY-POA with Copa operating CUN-PTY-POA and AA only operating MIA-CUN, all this in the aa.com.


And I believe MIA-BSB will not survive unless AA adjust a quick deal with G3 (which I believe they will try to do, but will only resolve Brazil)

I can imagine an AA meeting tomorrow.... what to do.... no solution for Colombia, Peru, Chile or Argentina other than try to run their own equipment to some markets and to counter attack in fares against future moves from DL/JJ.


What solution does AA need in Chile or Argentina? There is no way other than through local partners to access IQQ or BRC.

And I don’t know that I agree with you about MIA-BSB. AA retains a solid brand in Latin America, a nonstop to the largest O&D market in North America, and good connections to everywhere with appreciable demand. Those things are a good sized chunk of what makes the route succeed and all are independent of LATAM. DL (re)starting ATL-BSB would change things but we aren’t there yet.


You may be right about Chile and Argentina due to the huge concentration on SCL and EZE, but even if we believe that other markets in Chile for example may account for 20% of the travel demand Chile-US, it means this is a market outside of AA's reach without another partnership.

Same reason for me to believe BSB-MIA can be hit by the lack of distribution in Brazil.
Yes, AA have a solid brand but the BSB-MIA leg could be reach by customers on AA and LA websites even for people outside BSB. Now the feed is missing and it can be the difference between being a profitable route or not giving the low levels of return in aviation nowadays (net profits are below 10%). I used this route once but now for example, this is not possible unless I book separate tickets.

Frequent flyers adjust themselves for sure, but they are just part of the market. But how they will deal... big question: the massive LA base of clients in BSB could take advantage of AA's BSB-MIA service... now they will not and I do believe sooner than later BSB is a market where LA (or DL) will cover with an operation to the US.

And believe me: LA base of clients in BSB willing to visit the US is far bigger than the AA base of clients in the US willing to visit BSB.

AA compete in Sao Paulo, Santiago, Buenos Aires, Lima and Bogota with no doubt against LA (and we will see in my opinion more competition for the local O&D as LA will not feed anymore AA). But in other markets, we will se new trends depending on each move.
In the other hand, we will see also more focus on Latam to capture O&D's in Miami, Boston, Los Angeles and New York up to the point they put in place the agreement with DL (and so move from T8 in JFK to T4 where they can get feed from DL).
New York + Rio de Janeiro = One of the best combinations !
 
User avatar
chepos
Posts: 7273
Joined: Sat Dec 02, 2000 9:40 am

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 5:04 am

TWA85 wrote:
chepos wrote:
TWA85 wrote:
AA's only remaining option is to start flying fifth freedom flights between South American countries and purchase stakes in smaller local airlines to feed the fifth freedom flights.

The bigger question here is who could be next? The AA/LAN partnership is over 20 years old. If DL can pull LATAM away from AA, who else can DL pull away from AA and even UA?


Why would AA have to start flying 5th freedom flights? Again, AA managed flying to Latin America way before LAN became a partner.

Before TAM and LAN merged , AA had no local partner in Brazil as TAM was a Star partner. Yet, AA managed to make Brazil work.


Sent from my iPhone using Tapatalk


Because DL/LATAM will be MUCH stronger than LAN and TAM were before they became partners to AA. Without feed from LATAM, AA will have a harder time filling its flights to/from South America. AA will have to rely overwhelmingly on the United States point of sale now. DL and LATAM will have the advantage of sales forces on both continents. AA will only have a sales force in the United States. Without an intra-South American network, AA will not be able to compete with LATAM and Delta for lucrative corporate contracts. Prior to LAN and TAM becoming partners to AA, the North America-South America market was fragmented and no airline(s) offered a network with a large connecting presence on both ends. Each airline primarily focused on the point of sale in their home country. AA will definitely survive in South America, however it likely wont be the bread and butter it once was. South America has always been the market where AA was the leader against DL and UA. Now AA will be weaker than the two in Europe, Asia, and South America.


To say all of a sudden AA looses Latin America point if sale is silly.


Sent from my iPhone using Tapatalk
Fly the Flag!!!!
 
Scarebus34
Posts: 531
Joined: Tue Feb 12, 2019 10:54 pm

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 5:04 am

With DL ending their partnership with G3 perhaps they’ll join Star Alliance and help feed UA at GRU...
Last edited by Scarebus34 on Fri Sep 27, 2019 5:22 am, edited 1 time in total.
 
716131
Posts: 892
Joined: Thu Mar 16, 2017 11:51 am

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 5:07 am

Scarebus34 wrote:
With DL ending their partnership with B3 perhaps they’ll join Star Alliance and help feed UA at GRU...

Not B3, you mean G3 (GOL)?
If it's not Boeing, I'm not going!
 
User avatar
chepos
Posts: 7273
Joined: Sat Dec 02, 2000 9:40 am

Delta buying 20% of LATAM

Fri Sep 27, 2019 5:09 am

Did G3 say they where going to end the DL partnership?

Sent from my iPhone using Tapatal
Fly the Flag!!!!
 
User avatar
LAX772LR
Posts: 13348
Joined: Sun Nov 09, 2014 11:06 pm

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 5:22 am

Come on DL, do the same with Cathay!!!!!!!

(yes, I'm aware that an immunized J/V with CX is not possible, but still, equity!
I myself, suspect a more prosaic motive... ~Thranduil
 
Scarebus34
Posts: 531
Joined: Tue Feb 12, 2019 10:54 pm

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 5:23 am

SQ789 wrote:
Scarebus34 wrote:
With DL ending their partnership with B3 perhaps they’ll join Star Alliance and help feed UA at GRU...

Not B3, you mean G3 (GOL)?

I did - it was a typo. Thanks.
 
Scarebus34
Posts: 531
Joined: Tue Feb 12, 2019 10:54 pm

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 5:23 am

chepos wrote:
Did G3 say they where going to end the DL partnership?

Sent from my iPhone using Tapatal

It is being reported that the relationship between DL and G3 is 'expected' to end.
 
Gbass21
Posts: 33
Joined: Sat Feb 10, 2018 8:01 pm

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 5:35 am

Wow, I'm still speechless. So many questions...why on hell latam agreed to change their monopoly in gru, lima and scl with one world partners as BA, IB, QF, AA dominating Latin America-EU/NA/Pacific rim and other OW connections just for trying something new in skyteam? I don't get it

Some conclusions:
1. Skyteam could create a new monopoly in Hispanic America, with aeromexico, AR and latam
2. Definitely could se VA going to scl
3. Air france-klm presence will increase in the region
4. Not getting what role could do ATL for latam. DFW (has more Asia traffic than ATL)
5. What impact could create in United-Copa-avianca
6. Could AA try to buy an stake in AR to compete?
7. QF relationship with latam would be something to look at it
 
TTailedTiger
Posts: 2705
Joined: Sun Aug 26, 2018 5:19 am

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 5:35 am

MSPNWA wrote:
lightsaber wrote:
If Delta had UA's or AA's debt, you would have a point.

DL isn't taking any major risk doing this deal. I see a ROI.


They do have that debt. Don't forget DL's unfunded pension liability, or discount DL's older fleet, which is like a hidden debt load that will put pressure on cash flow for the next 10 years or so. DL's debt position isn't great either, but they currently make the high profit to counterbalance.

North of $2B isn't a large sum for a company as large as DL, but there's plenty of risk, as a positive ROI isn't guaranteed. There's much safer plays for the money, like improving the profitability of your own business. Hey, give DL credit for taking a risk.


Yep. But no worries, if DL gets in trouble they will just make the government pick up the pension debt like they did last time.
  • 1
  • 3
  • 4
  • 5
  • 6
  • 7
  • 18

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos