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Sydscott
Posts: 3442
Joined: Thu Oct 30, 2003 11:50 am

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 6:19 am

LAX772LR wrote:
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!


You forget that Air China owns 29.99% of Cathay Pacific. So even if DL "did the same" to Cathay the notion that DL would somehow get a larger say in matters than Air China is a tad unrealistic. If anything the only way CX will move is towards STAR, Delta and Skyteam won't get a look in there.

Scarebus34 wrote:
chepos wrote:Did G3 say they where going to end the DL partnership?Sent from my iPhone using TapatalIt is being reported that the relationship between DL and G3 is 'expected' to end.


There is no way the LATAM Partnership goes ahead unless they give up G3.

Scarebus34 wrote:
With DL ending their partnership with G3 perhaps they’ll join Star Alliance and help feed UA at GRU...


Doubtful because UA, and other Star Alliance members, already have Azul codeshares in place. So I doubt they would trade Azul for GOL whereas I'd say with 100% certainty we will see AA go down there and talk to literally everyone they can about codesharing AND that, with 100% certainty, we are going to see an increase in AA flying to Central and South America. This area is an AA stronghold, they are still the biggest US Carrier to the region even after this AND they still have the best hub at MIA to capture O&D. So the structural advantages AA has will allow it to compete with or without LATAM.

For DL this nicely fills a gap in their network where they were weak and it makes them competitive with some feed advantages from LATAM. That's what a couple of billion dollars gets them, a competitive presence that they couldn't have built themselves.
 
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LAXintl
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Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 6:22 am

Some comments from Ed Bastian in an interview tonight:


“This is a big change for Latam as they unplug from American and Oneworld,” Delta Chief Executive Officer Ed Bastian said in an interview Thursday. “We immediately saw a lot of opportunities together for growth.”

--

Delta and Latam “do not anticipate any issues” winning regulatory blessings for their joint business, a process that will likely take one to two years, Bastian said. A U.S. open skies deal is pending with Argentina, and that would eventually be included in the joint business with Latam, Atlanta-based Delta said.

--

Latam isn’t currently planning to join the Delta-led SkyTeam alliance, Bastian said.


Delta Air Lines Buys Stake in Latin America’s Latam at American’s Expense
https://skift.com/2019/09/26/delta-air- ... s-expense/
From the desert to the sea, to all of Southern California
 
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LAX772LR
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Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 6:32 am

Sydscott wrote:
LAX772LR wrote:
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!

You forget that Air China owns 29.99% of Cathay Pacific. So even if DL "did the same" to Cathay the notion that DL would somehow get a larger say in matters than Air China is a tad unrealistic. If anything the only way CX will move is towards STAR, Delta and Skyteam won't get a look in there.

You're assuming wayyyyyy too much from that statement.

First, I forgot nothing: CA's ownership stake isn't preventative of DL (or anyone else) acquiring equity per se.

Second, DL wouldn't need to have a "larger say" than anyone in order to meet its needs; simply having a say at all, would put it ahead of N.Am rivals for what's long been the primary transitory gateway between the Americas and S.E.Asia; where DL more than any has had a terrible history of inability to sustain, in both is '90s and '10s attempts at serving HKG.

And finally, no one's saying anything about SkyTeam (or even Star) for that matter; I wouldn't be surprised if airlines leaving an alliance in today's age, refrained from joining another. The Alliances are a 1990s model, in a 2020s world, and quite frankly, I'm surprised that they've managed to last this long in their current form.
I myself, suspect a more prosaic motive... ~Thranduil
 
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JerseyFlyer
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Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 6:34 am

Per the A350 production thread some JJ 350s are being delivered on lease direct to QR. Maybe these go to DL on return.

Yesterday, 7:10 am

MSN 282 (JJ#11-leased to QR) on its delivery flight as QR3350. #305. #70 in 2019. #5 in September
 
UAL777UK
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Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 6:40 am

Wow......never saw this coming!!

Surely AA must have known this was going on with DL?. I mean, was the relationship with AA or OW poor to the point they did not pony up to AA and ask them to match or beat the deal or we are off. And leaving OW, I assume there are penalties attached to this?

Again, just wow. Fair play to DL, they just threw a massive curve ball in South America. Hats off to them.
 
eamondzhang
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Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 6:48 am

smi0006 wrote:

Exactly QF already have JVs with CZ and MU,

Think i've mentioned a few times that CZ's partnership with QF is codeshare only, however QF does partner (JV) with EK for your theory.

Michael
 
Sydscott
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Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 7:10 am

LAX772LR wrote:
Sydscott wrote:
LAX772LR wrote:
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!

You forget that Air China owns 29.99% of Cathay Pacific. So even if DL "did the same" to Cathay the notion that DL would somehow get a larger say in matters than Air China is a tad unrealistic. If anything the only way CX will move is towards STAR, Delta and Skyteam won't get a look in there.

You're assuming wayyyyyy too much from that statement.

First, I forgot nothing: CA's ownership stake isn't preventative of DL (or anyone else) acquiring equity per se.

Second, DL wouldn't need to have a "larger say" than anyone in order to meet its needs; simply having a say at all, would put it ahead of N.Am rivals for what's long been the primary transitory gateway between the Americas and S.E.Asia; where DL more than any has had a terrible history of inability to sustain, in both is '90s and '10s attempts at serving HKG.

And finally, no one's saying anything about SkyTeam (or even Star) for that matter; I wouldn't be surprised if airlines leaving an alliance in today's age, refrained from joining another. The Alliances are a 1990s model, in a 2020s world, and quite frankly, I'm surprised that they've managed to last this long in their current form.


I assume nothing.

Firstly - I didn't say CA's stake was preventative of anyone else taking a stake.

Secondly - Swire owns 45% of CX, CA owns 29.99% while QR owns 9.61%. By my calculations that leaves 15.4% of CX in publicly tradeable hands. From everything we know about the QR shareholding there has been zero movement in the CX / QR relationship since they bought in in 2017 while CA has owned their cross shareholding for a decade. So yes DL would need to have a "larger say" than, for example, Air China if they wanted CX as their Partner and that's something that simply won't work.

Thirdly - each alliance is different. Star seems to work quite well integrated while Oneworld seems to work quite well with the ability of the member airlines to do whatever they want. They have all evolved and what DL is doing is simply another form of Alliance albeit one that involves equity investments rather than non-equity joint businesses etc. Either way it's the same thing executed a different way.
 
MAH4546
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Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 7:11 am

Touching upon some comments on what it could mean for Delta’s presence in Miami:

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.

https://www.ajc.com/business/delta-spen ... mu2Nf4rSO/
a.
 
xiaotung
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Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 7:16 am

Sydscott wrote:
LAX772LR wrote:
Sydscott wrote:
You forget that Air China owns 29.99% of Cathay Pacific. So even if DL "did the same" to Cathay the notion that DL would somehow get a larger say in matters than Air China is a tad unrealistic. If anything the only way CX will move is towards STAR, Delta and Skyteam won't get a look in there.

You're assuming wayyyyyy too much from that statement.

First, I forgot nothing: CA's ownership stake isn't preventative of DL (or anyone else) acquiring equity per se.

Second, DL wouldn't need to have a "larger say" than anyone in order to meet its needs; simply having a say at all, would put it ahead of N.Am rivals for what's long been the primary transitory gateway between the Americas and S.E.Asia; where DL more than any has had a terrible history of inability to sustain, in both is '90s and '10s attempts at serving HKG.

And finally, no one's saying anything about SkyTeam (or even Star) for that matter; I wouldn't be surprised if airlines leaving an alliance in today's age, refrained from joining another. The Alliances are a 1990s model, in a 2020s world, and quite frankly, I'm surprised that they've managed to last this long in their current form.


I assume nothing.

Firstly - I didn't say CA's stake was preventative of anyone else taking a stake.

Secondly - Swire owns 45% of CX, CA owns 29.99% while QR owns 9.61%. By my calculations that leaves 15.4% of CX in publicly tradeable hands. From everything we know about the QR shareholding there has been zero movement in the CX / QR relationship since they bought in in 2017 while CA has owned their cross shareholding for a decade. So yes DL would need to have a "larger say" than, for example, Air China if they wanted CX as their Partner and that's something that simply won't work.

Thirdly - each alliance is different. Star seems to work quite well integrated while Oneworld seems to work quite well with the ability of the member airlines to do whatever they want. They have all evolved and what DL is doing is simply another form of Alliance albeit one that involves equity investments rather than non-equity joint businesses etc. Either way it's the same thing executed a different way.


Forget CX. It holds too much political importance to China. Many believe CA's full takeover of CX is only a matter of time. DL has MU and Shanghai. That's quite enough for them.
 
PANAMsterdam
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Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 7:18 am

AirFrance-KLM owns 1,50% of G3. I assume they have been informed about DL's stunning move before the press release was sent out, otherwise Amstelveen and Paris are waking up with the news that suddenly they own a stake in their American Best Friend's competitor.
Come fly with me, let's fly, let's fly away!
 
MAH4546
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Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 7:24 am

LipeGIG wrote:
LatinAirliner wrote:
LipeGIG wrote:
Seems a quick reaction.... AA cut from its system already code-share flights in Brazil with LA... tried right now to price FOR-MIA and ... no results... VIX-MIA... shows only G3 connecting flights.


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.


MIABSB is a massive local market, not much smaller than MIAGIG. That is a ridiculous statement. It is well over 150 PDEW. Suddenly AA is going to leave because people rather connect? Granted, I wouldn’t fly AA garbage product and I’d rather connect, but most people will take the non-stop. AA’s strength in Brazil came long before its partnership with TAM.
Last edited by MAH4546 on Fri Sep 27, 2019 7:26 am, edited 2 times in total.
a.
 
SEAflyer97
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Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 7:24 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


Not true if you don't live in US. There's no close relation between all the JV airlines except they all share one partner--Delta.
 
SEAflyer97
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Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 7:28 am

I think people are forgetting that the Latin America market is highly O&D--it's nice to have a partner but not essential to success. It's a loss to OW and AA but I think they are going to be fine. I'm wondering how LA's relation with IB will change--LA will lose its connection hub in Europe.
 
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QuawerAir
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Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 7:43 am

This is a big win for Delta Air Lines and SkyTeam alliance while a tremendous setback for Oneworld. I'm afraid Oneworld will not find a partner in South America any time soon...
ATL, AYT, FRA, FUE, HEL, JFK, LCA, LHR, MUC | AY, BA, DL, FH, LH, LO | A320, A321, A333, 752, 764, 772, 788
The word "Quawer" means nothing but it looks great.
 
grbauc
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Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 7:52 am

Adipocere wrote:
usflyer msp wrote:
People are way overestimating the effect of this upon AA. AA was the king of Latin America before any relationship with LA/LATAM and will be afterwards. He who rules MIA rules US-Latin America traffic. If anything LATAM is the one being screwed here as they are going to lose most of their US point-of-sale traffic, especially in MIA.


If LATAM wants feed, why wouldn’t they just go to ATL and tap into that fire hydrant?? AA is the one reeling here - in football terms it’s DL at the one-yard line at MIA - only a fumble can stop them from taking over.

If they do evict AA from MIA, then looking 10 years out - Texas could come into play for DL. A lot of things have to go right for DL and a lot more have to go badly for AA, but there is a path for AA to lose hubs at MIA and DFW...



Wow this is great news for DL DFW and MIA are gone to DL what about ORD? how can DL get it? LAX will fold to DL also I assume? AA can keep PHL/PHX/CLT and maybe move back in to PIT?
 
grbauc
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Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 8:03 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.



Not a bad thing either but Airfares are at or around the same price has 20 years ago...
 
RCS763AV
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Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 8:29 am

Well, this is certainly bold and disruptive. However, I'm not surprised.

First, DL had already lost a network partner in South America ever since AV decided to go with *A in 2010 and cancel the close relationship they had. They needed a new one (G3 has minimal presence outside of Brazil).

Second: The AA-LATAM JV was uncompetitive and the measures that regulators were asking for added little value to any of the airline's networks. As I guess, folks at LATAM may have been approached by DL and made the bold move given they were not going to get a JV with AA/IB approved. A JV with DL is certainly going to get approval. Same for LA/AF-KL/UX for transatlantic.

As has been said during the thread. this will certainly send shockwaves to the market and will bolster competition. AA will need to think outside the box. An unaligned career which has some mass is Azul in Brazil, maybe they'll lure them into oneworld. The only problem is that their main hub is VCP, with reduced presence in GRU which is the higher yielding airport.

Also, regarding IB, I wonder what they'll do. This means they'll be losing key domestic feed in Colombia, Peru, Brazil, Chile and Argentina which supports their extensive transatlantic network. Apart from AV and AR, the remaining careers are LCCs which may have little interest in codesharing.

Ouch.
 
tvh
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Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 8:58 am

Is this all bad news for gol. They currently have a codeshare agrement with delta and other skyteam menbers ?
 
VTCIE
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Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 9:06 am

What are the odds of Oneworld getting either G3 or AD? G3 will severe ties with DL anyway, while AD, which is a much more premium airline than G3, will have to cut ties with TAP in order to join Oneworld. Otherwise Oneworld will have a LATAM-sized hole. There is no other good airline in Latin America (at least South America) worthy of joining an alliance.

CZ, Asia’s biggest airline, has shown that it is not compulsory for even the biggest airlines to rejoin an alliance after they leave another, and therefore LA will be alliance-free for the foreseeable future after it leaves Oneworld. However it is NOT joining SkyTeam as AR will not be happy. Otherwise VS would have joined SkyTeam by now.

Since Oneworld is gaining AT next year, it will remain a five-continent alliance, except that the fifth continent changes from South America to Africa.
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zkojq
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Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 9:34 am

Once again, an absolute masterstroke by DL. Absolutely blindsided everyone. Kudos to them.

MIflyer12 wrote:
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.


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?

danvs wrote:
How will LA replace the A350s that will go to DL? With DL's +20yo B763? :cry:



LATAM has several A350s leased out to Qatar Airways, so presumably it is these frames which DL will take, as well as the future orderbook.
First to fly the 787-9
 
inkjet7
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Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 9:43 am

LAXintl wrote:

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.[/i]

Surprise move as not only DL but partner AF/KL (mainly Transavia) have been cooperating for years.
Last edited by inkjet7 on Fri Sep 27, 2019 10:02 am, edited 1 time in total.
 
aguifs
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Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 10:01 am

I work with flight dispatch for Gol Linhas Aéreas. I'm really afraid what's next for G3. Suddenly, without Delta, we're no match for Latam and Azul. I don't envision AF-KLM coming for the rescue. Gol is bleeding... We already had the Max issue and now this... Is there any siver lining?
 
Thibault973
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Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 10:14 am

PANAMsterdam wrote:
AirFrance-KLM owns 1,50% of G3. I assume they have been informed about DL's stunning move before the press release was sent out, otherwise Amstelveen and Paris are waking up with the news that suddenly they own a stake in their American Best Friend's competitor.


It's not just their best friend, DL owns 8,8% in AFKL
 
Thibault973
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Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 10:16 am

tvh wrote:
Is this all bad news for gol. They currently have a codeshare agrement with delta and other skyteam menbers ?


In fact, most GOL planes have a huge "in cooperation with DL and AFKL" sticker in front of the aircraft.
 
ITSTours
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Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 10:17 am

aguifs wrote:
I work with flight dispatch for Gol Linhas Aéreas. I'm really afraid what's next for G3. Suddenly, without Delta, we're no match for Latam and Azul. I don't envision AF-KLM coming for the rescue. Gol is bleeding... We already had the Max issue and now this... Is there any siver lining?


Gol may need to merge with Azul? I think that is the logical outcome.
 
xiaotung
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Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 10:25 am

VTCIE wrote:
What are the odds of Oneworld getting either G3 or AD? G3 will severe ties with DL anyway, while AD, which is a much more premium airline than G3, will have to cut ties with TAP in order to join Oneworld. Otherwise Oneworld will have a LATAM-sized hole. There is no other good airline in Latin America (at least South America) worthy of joining an alliance.

CZ, Asia’s biggest airline, has shown that it is not compulsory for even the biggest airlines to rejoin an alliance after they leave another, and therefore LA will be alliance-free for the foreseeable future after it leaves Oneworld. However it is NOT joining SkyTeam as AR will not be happy. Otherwise VS would have joined SkyTeam by now.

Since Oneworld is gaining AT next year, it will remain a five-continent alliance, except that the fifth continent changes from South America to Africa.


Well, we don't know why CZ hasn't joined oneworld or if they are planning to join. The complication may very well come from CX. If not mistaken, even though CZ has left SkyTeam, they have until the end of 2019 to exit all their SkyTeam member partnerships. So we may have news next year. Oneworld needs a big win now and the closet thing to that is getting CZ.
 
MIflyer12
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Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 10:29 am

PANAMsterdam wrote:
AirFrance-KLM owns 1,50% of G3. I assume they have been informed about DL's stunning move before the press release was sent out, otherwise Amstelveen and Paris are waking up with the news that suddenly they own a stake in their American Best Friend's competitor.


Probably not. That would be a material disclosure before the public notice.
 
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lightsaber
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Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 11:09 am

Discuss the topic, not other users.
This thread is requiring multiple moderators to keep civil. You have been warned.
IM messages to mods on warnings and bans will be ignored and nasty ones will result in a ban.
 
WingsOfLove
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Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 11:14 am

This probably has been posted somewhere upstream... but ;)

how many weekly MIA departures to South America do AA & LATAM have respectively?
 
Ishrion
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Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 11:28 am

So... I'm wondering about this.

Is LATAM cutting all ties with Oneworld members?

Does China Southern still have its AF/KL JV and codeshare with numerous SkyTeam members after leaving the alliance? The Wiki still shows CZ codeshares with airlines like Delta, Alitalia, Garuda, China Airlines, Kenya, Saudia, AF/KL, etc. Not sure if that's completely true.
 
jfk777
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Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 11:38 am

SEAflyer97 wrote:
I think people are forgetting that the Latin America market is highly O&D--it's nice to have a partner but not essential to success. It's a loss to OW and AA but I think they are going to be fine. I'm wondering how LA's relation with IB will change--LA will lose its connection hub in Europe.


The Delta-Latam deal will in the beginning informally bring all Delta has including AF & KLM. Then it will become a formal arrangement. AF & KLM loves this because they now have feed and better facilities at the larger and important Latin hubs. CDG is a far bigger hub then Madrid providing better connections, LATAM will surely expand flights to CDG. Santiago to CDG flights are surely in LATAM's future since right now they only fly from GRU to CDG. Iberia will be fine sicne its been flying to Latin America for decades.
 
dirk88
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Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 11:43 am

Doesn't LATAM want to keep their cooperation with Iberia for domestic spain feed?
 
xdlx
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Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 11:48 am

airzona11 wrote:
Get JVs with all your foreign partners, increase stake in said partners, and you have a global airline.


Absolutely..... in the meantime instead of flying OWN metal..... be a global airline with others flying the routes.
 
MIflyer12
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Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 12:04 pm

jfk777 wrote:
SEAflyer97 wrote:
I think people are forgetting that the Latin America market is highly O&D--it's nice to have a partner but not essential to success. It's a loss to OW and AA but I think they are going to be fine. I'm wondering how LA's relation with IB will change--LA will lose its connection hub in Europe.


The Delta-Latam deal will in the beginning informally bring all Delta has including AF & KLM. Then it will become a formal arrangement. AF & KLM loves this because they now have feed and better facilities at the larger and important Latin hubs. CDG is a far bigger hub then Madrid providing better connections, LATAM will surely expand flights to CDG. Santiago to CDG flights are surely in LATAM's future since right now they only fly from GRU to CDG. Iberia will be fine sicne its been flying to Latin America for decades.


That assessment ignores what people traveling from Latin America prefer as destinations. I'll aver they are predominantly in Spain and Portugal, not France nor the France-centric destination set of AF from CDG. There will probably be a few xxx-CDG flights that come out of this but it's not going to slash the number of Latin Americans with a destination of Madrid.

Anybody have access to PDEW numbers BOG/LIM/SCL-MAD/BCN/LIS vs. CDG/NCE/FRA, as an example comparison?
 
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Polot
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Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 12:08 pm

MIflyer12 wrote:
jfk777 wrote:
SEAflyer97 wrote:
I think people are forgetting that the Latin America market is highly O&D--it's nice to have a partner but not essential to success. It's a loss to OW and AA but I think they are going to be fine. I'm wondering how LA's relation with IB will change--LA will lose its connection hub in Europe.


The Delta-Latam deal will in the beginning informally bring all Delta has including AF & KLM. Then it will become a formal arrangement. AF & KLM loves this because they now have feed and better facilities at the larger and important Latin hubs. CDG is a far bigger hub then Madrid providing better connections, LATAM will surely expand flights to CDG. Santiago to CDG flights are surely in LATAM's future since right now they only fly from GRU to CDG. Iberia will be fine sicne its been flying to Latin America for decades.


That assessment ignores what people traveling from Latin America prefer as destinations. I'll aver they are predominantly in Spain and Portugal, not France nor the France-centric destination set of AF from CDG. There will probably be a few xxx-CDG flights that come out of this but it's not going to slash the number of Latin Americans with a destination of Madrid.

Anybody have access to PDEW numbers BOG/LIM/SCL-MAD/BCN/LIS vs. CDG/NCE/FRA, as an example comparison?

:checkmark: Any suggestion otherwise is akin to saying that LATAM will drop their heavy Miami focus for ATL. You will see some additional flights, but the bulk of the flying to Madrid[/Miami] is because of the strong local market (due to historic market/ethnic ties), not because of connection opportunities. LATAM benefits DL far more than it does KL/AF.
 
deltalaw
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Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 12:18 pm

TTailedTiger wrote:
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.


Untrue. DL was the one of (if not the only) major US carrier at the time that filed for Chapter 11 and DID NOT default on their pension responsibilities.
 
NWAESC
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Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 12:20 pm

Phoenix757767 wrote:
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.


Corp Comm’s raison d’etre is to control the narrative.
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NWAESC
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Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 12:26 pm

MSPNWA wrote:
That's a big premium to pay for a currently money-losing enterprise. It's a big gamble. It's certainly not the safe play with $1.9B dollars.


Can’t win if you don’t play.
"Nothing ever happens here, " I said. "I just wait."
 
MIflyer12
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Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 12:26 pm

Anybody else listening in on Delta's conference call today?

https://ir.delta.com/events-and-present ... fault.aspx
 
jayunited
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Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 12:41 pm

Does anyone know why the Chilean Supreme Court blocked AA's proposed JV with LA? Prior to this AA was expecting the proposed JV to be worth hundreds of millions of dollar yearly. After the decision AA revised the number to $20 Million annually.

DL like AA will wants a JV with LA and we know JV's are far more lucrative than a simple partnership. Is there a chance that the Chilean Supreme Court could block a DL/LA joint venture?
 
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DL747400
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Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 12:57 pm

dirk88 wrote:
Doesn't LATAM want to keep their cooperation with Iberia for domestic spain feed?


Perhaps LATAM will align with UX for Spain POS feed? Could benefit both carriers. Hmm...
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frigatebird
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Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 12:59 pm

seemyseems wrote:
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?


That would be a dream :cloudnine:

Well, I wouldn't be surprised if your dream will come true. Really not sure how many A350s LATAM still have on order (some sources say their order total was 17 A359s and 8 A35Ks, but I recall the original order was for 27 A350 aircraft). 5 A359 are flying for LATAM, another 5 leased to QR. I believe these are short term leases, and could be returned as early as next year. Which means 7 A359 to be delivered and 8 A35K. Apparently, JJ's 8 77W will stay, in that case I don't think LATAM will get the A35K. So these will end up at DL, unless Airbus agrees to convert them back to -900s. But I don't know if this would be contractually possible.

With all interesting developments at DL, I think DL can use the A350-1000. For an airline like DL, the A350-900 as largest aircraft seems a bit small.
146,318/19/20/21, AB6,332,333,343,345,388, 722,732/3/4/5/G/8,9, 742,74E,744,752,762,763, 772,77E,773,77W,788 AT4/7,ATP,CRK,E75/90,F50/70
 
dmorbust
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Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 1:05 pm

aguifs wrote:
I work with flight dispatch for Gol Linhas Aéreas. I'm really afraid what's next for G3. Suddenly, without Delta, we're no match for Latam and Azul. I don't envision AF-KLM coming for the rescue. Gol is bleeding... We already had the Max issue and now this... Is there any siver lining?


I think Gol will actually end up in a better position once AA decides to partner with them. AA to Brazil is larger than DL to Brazil, so that's more feed for Gol and a bigger more dominant Brazilian partner.
 
Cubsrule
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Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 1:09 pm

MIflyer12 wrote:
jfk777 wrote:
SEAflyer97 wrote:
I think people are forgetting that the Latin America market is highly O&D--it's nice to have a partner but not essential to success. It's a loss to OW and AA but I think they are going to be fine. I'm wondering how LA's relation with IB will change--LA will lose its connection hub in Europe.


The Delta-Latam deal will in the beginning informally bring all Delta has including AF & KLM. Then it will become a formal arrangement. AF & KLM loves this because they now have feed and better facilities at the larger and important Latin hubs. CDG is a far bigger hub then Madrid providing better connections, LATAM will surely expand flights to CDG. Santiago to CDG flights are surely in LATAM's future since right now they only fly from GRU to CDG. Iberia will be fine sicne its been flying to Latin America for decades.


That assessment ignores what people traveling from Latin America prefer as destinations. I'll aver they are predominantly in Spain and Portugal, not France nor the France-centric destination set of AF from CDG. There will probably be a few xxx-CDG flights that come out of this but it's not going to slash the number of Latin Americans with a destination of Madrid.

Anybody have access to PDEW numbers BOG/LIM/SCL-MAD/BCN/LIS vs. CDG/NCE/FRA, as an example comparison?


It's not going to slash the number of Latin Americans going to Spain and Portugal, but if 40 percent of a given flight is connecting to FRA at MAD, for instance, that flight becomes more challenging. None of IB's Latin America flights is 100 percent Spain and Portugal-bound.
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dmorbust
Posts: 145
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Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 1:10 pm

MIflyer12 wrote:
Anybody else listening in on Delta's conference call today?

https://ir.delta.com/events-and-present ... fault.aspx


Yes, key bits of info:

LATAM plans to remain unaligned - this makes sense because they will continue to leverage existing OneWorld partners like Qantas, Iberia, BA, etc. while now also being able to partner with AF-KLM. AF-KLM is pretty lucky to get a bunch of upside while having to put up zero cash/risk.

DL will take 2 A350s by end of 2020. The rest will arrive by 2025.
 
MIflyer12
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Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 1:12 pm

jayunited wrote:
Does anyone know why the Chilean Supreme Court blocked AA's proposed JV with LA? Prior to this AA was expecting the proposed JV to be worth hundreds of millions of dollar yearly. After the decision AA revised the number to $20 Million annually.

DL like AA will wants a JV with LA and we know JV's are far more lucrative than a simple partnership. Is there a chance that the Chilean Supreme Court could block a DL/LA joint venture?


DL execs said no on the conf call just ended. They assert that DL and LATAM traffic flows are complementary, not competing.

DL said they would raise 'substantially all' of the $1.9 Billion for the equity stake via debt.
 
dmorbust
Posts: 145
Joined: Thu Feb 21, 2013 11:50 pm

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 1:13 pm

jayunited wrote:
Does anyone know why the Chilean Supreme Court blocked AA's proposed JV with LA? Prior to this AA was expecting the proposed JV to be worth hundreds of millions of dollar yearly. After the decision AA revised the number to $20 Million annually.

DL like AA will wants a JV with LA and we know JV's are far more lucrative than a simple partnership. Is there a chance that the Chilean Supreme Court could block a DL/LA joint venture?


DL and LATAM have almost no overlap or competing routes. It's an easy antitrust approval. LATAM and AA had huge overlap on many routes and was pretty obviously uncompetitive without important carveouts.
 
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flymco753
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Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 1:16 pm

I've analyzed that with Colombia's growing scene regarding automobiles and with GRU having already been served from DTW, these seem like viable options. BOG & GRU are really the only 2 significant markets from DTW, but both command decent premium traffic if you take yields into consideration.
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TropicalSky
Posts: 299
Joined: Fri May 05, 2017 1:37 pm

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 1:19 pm

Just to clarify is the 2 A350 arriving in 2020 in addition to Delta own aircraft slated for delivery next yr?



dmorbust wrote:
MIflyer12 wrote:
Anybody else listening in on Delta's conference call today?

https://ir.delta.com/events-and-present ... fault.aspx


Yes, key bits of info:

LATAM plans to remain unaligned - this makes sense because they will continue to leverage existing OneWorld partners like Qantas, Iberia, BA, etc. while now also being able to partner with AF-KLM. AF-KLM is pretty lucky to get a bunch of upside while having to put up zero cash/risk.

DL will take 2 A350s by end of 2020. The rest will arrive by 2025.
 
jrkmsp
Posts: 164
Joined: Sun May 14, 2017 1:33 am

Re: Delta buying 20% of LATAM

Fri Sep 27, 2019 1:22 pm

jayunited wrote:
Does anyone know why the Chilean Supreme Court blocked AA's proposed JV with LA? Prior to this AA was expecting the proposed JV to be worth hundreds of millions of dollar yearly. After the decision AA revised the number to $20 Million annually.

DL like AA will wants a JV with LA and we know JV's are far more lucrative than a simple partnership. Is there a chance that the Chilean Supreme Court could block a DL/LA joint venture?


In short, the #1 and #2 carriers between Chile and the US wanted a tie-up, which is pretty anti-competitive. Delta’s only last place, so it’s much less competitively damaging and might in some ways actually increase competition.
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