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OB1504
Posts: 3966
Joined: Tue Jul 27, 2004 5:10 am

Re: LATAM moving towards bankruptcy

Sun May 24, 2020 1:24 am

kondoo wrote:
Something it is true, LATAM would love to have AA right now to flow their passengers beyond MIA at this time.

Now AA gets to flow interior US to their international destinations on their own metal and LATAM, well they can keep Punta Arenas


At least until AA collapses. Then what?

onwFan wrote:
If you mean AA is not flying to South America today or next week, I don’t know what the relevance is. Neither is DL. If there is the slightest meaningful passenger demand between the US and South America, there is no doubt AA will jump in. It remains to be seen what LA’s US network even looks like when they emerge from the crisis.


LATAM is still flying cargo flights between North and South America.
 
davidjohnson6
Posts: 866
Joined: Mon Jun 20, 2016 10:10 pm

Re: LATAM moving towards bankruptcy

Sun May 24, 2020 1:27 am

To echo usflyer's point.... the extrael cost of flying to both ATL and MIA will significantly outweigh the increase in connectivity that ATL provides. Furthermore, because MIA is so far south it requires almost zero backtracking for flights in the far south of the USA - eg to visit the mouse / theme parks in Orlando
 
flyinghippo
Posts: 768
Joined: Thu Aug 11, 2005 12:48 am

Re: LATAM moving towards bankruptcy

Sun May 24, 2020 1:28 am

usflyer msp wrote:
flyinghippo wrote:
davidjohnson6 wrote:
At the risk of getting into deep trouble by writing this, large numbers of people in South America seems to have a deep desire to go to Miami. Atlanta just doesn't exert the same passion


Your point is sound and logical, you won't get into trouble with that statement.

Let me put it from a SA passenger perspective...

Before DL's JV with LATAM:
If anyone from SA wants to go to Miami, they fly to Miami on LATAM or AA
If anyone from SA wants to go to anywhere else in the US, they fly to Miami on LATAM or AA, go through US immigration and customs in MIA, and connect to their final destination.

After DL's VJ with LATAM:
If anyone from SA wants to go to Miami, they fly to Miami on LATAM
If anyone from SA wants to go to anywhere else in the US, they fly to Atlanta on LATAM or DL, go through US immigration and customs in ATL, and connect to their final destination.

From a passenger perspective, nothing has changed, and I'd argue that ATL provides a better port of entry experience than MIA, and DL offers more connections from ATL than AA out of MIA.


The difference is the cost of providing the service. With AA, LATAM pax could fly throughout the US via the MIA flights that LATAM was going to operate anyway due to the local demand. Now LA/DL have to add additional flights to ATL solely for connections or make their passengers double connect either of which is a much more expensive and/or less competitive method of serving the US-Latin America market.


Fair point - I'm sure DL considered that into their calculation when investing in LATAM - perhaps making MIA a focus city that provides the connection to their biggest hubs (LGA/JFK/DTW, etc) like they did for DFW. However, it's all a moot point now since international travel will not return until late 2021 (My guess), and who knows what airlines will survive, let alone what kind of condition they will be in.
 
sxf24
Topic Author
Posts: 1003
Joined: Wed Aug 15, 2007 12:22 pm

Re: LATAM moving towards bankruptcy

Sun May 24, 2020 1:29 am

NWAROOSTER wrote:
sxf24 wrote:
LATAM has missed multiple debt payments. It has limited opportunities to raise more cash and there’s increased speculation it could file for bankruptcy in the next few weeks. Without restructuring, current cash could be depleted by September.
Delta’s $1.9B investment is now worth about $300M. Any equity would likely be eliminated in bankruptcy.


I am sure that if Delta's $1.9B investment is written down, including bankruptcy, Delta will be able to file a tax lose and recover some of the lost investment. Delta may be able to acquire some of Latam's younger aircraft at a low price if they want any as there is not going to be a feeding frenzy on used aircraft. :old:


Delta is not going to be paying taxes for a while, so the write off of their investment has no value.

I don’t think LATAM will be returning / rejecting many attractive aircraft outside of A350s. I don’t think Delta will buy any of those as they have excess wide body capacity.
 
onwFan
Posts: 452
Joined: Wed Feb 03, 2016 4:02 am

Re: LATAM moving towards bankruptcy

Sun May 24, 2020 2:32 am

OB1504 wrote:
kondoo wrote:
Something it is true, LATAM would love to have AA right now to flow their passengers beyond MIA at this time.

Now AA gets to flow interior US to their international destinations on their own metal and LATAM, well they can keep Punta Arenas


At least until AA collapses. Then what?



I choose not to comment on the first statement. But I can tell you what will happen if that wild wish of yours becomes true - DL/LA can kiss goodbye to their chances of getting a JV approved after having a monopoly on MIA/JFK/LAX-South America.
 
LAXdude1023
Posts: 6174
Joined: Thu Sep 07, 2006 3:16 pm

Re: LATAM moving towards bankruptcy

Sun May 24, 2020 3:36 am

OB1504 wrote:
kondoo wrote:
Something it is true, LATAM would love to have AA right now to flow their passengers beyond MIA at this time.

Now AA gets to flow interior US to their international destinations on their own metal and LATAM, well they can keep Punta Arenas


At least until AA collapses. Then what?

onwFan wrote:
If you mean AA is not flying to South America today or next week, I don’t know what the relevance is. Neither is DL. If there is the slightest meaningful passenger demand between the US and South America, there is no doubt AA will jump in. It remains to be seen what LA’s US network even looks like when they emerge from the crisis.


LATAM is still flying cargo flights between North and South America.


AA isn’t going to collapse. That’s a ridiculous notion.
FOR THE LOVE OF GOD BRING BACK THE PAYWALL!!!!
 
sxf24
Topic Author
Posts: 1003
Joined: Wed Aug 15, 2007 12:22 pm

Re: LATAM moving towards bankruptcy

Sun May 24, 2020 4:11 am

LAXdude1023 wrote:
OB1504 wrote:
kondoo wrote:
Something it is true, LATAM would love to have AA right now to flow their passengers beyond MIA at this time.

Now AA gets to flow interior US to their international destinations on their own metal and LATAM, well they can keep Punta Arenas


At least until AA collapses. Then what?

onwFan wrote:
If you mean AA is not flying to South America today or next week, I don’t know what the relevance is. Neither is DL. If there is the slightest meaningful passenger demand between the US and South America, there is no doubt AA will jump in. It remains to be seen what LA’s US network even looks like when they emerge from the crisis.


LATAM is still flying cargo flights between North and South America.


AA isn’t going to collapse. That’s a ridiculous notion.


There’s a fair chance they’ll have to file bankruptcy in the fall, but they’re unlikely to disappear. Just like LATAM won’t disappear.
 
Antarius
Posts: 2430
Joined: Thu Apr 13, 2017 1:27 pm

Re: LATAM moving towards bankruptcy

Sun May 24, 2020 5:20 am

flyinghippo wrote:
davidjohnson6 wrote:
At the risk of getting into deep trouble by writing this, large numbers of people in South America seems to have a deep desire to go to Miami. Atlanta just doesn't exert the same passion


Your point is sound and logical, you won't get into trouble with that statement.

Let me put it from a SA passenger perspective...

Before DL's JV with LATAM:
If anyone from SA wants to go to Miami, they fly to Miami on LATAM or AA
If anyone from SA wants to go to anywhere else in the US, they fly to Miami on LATAM or AA, go through US immigration and customs in MIA, and connect to their final destination.

After DL's VJ with LATAM:
If anyone from SA wants to go to Miami, they fly to Miami on LATAM
If anyone from SA wants to go to anywhere else in the US, they fly to Atlanta on LATAM or DL, go through US immigration and customs in ATL, and connect to their final destination.

From a passenger perspective, nothing has changed, and I'd argue that ATL provides a better port of entry experience than MIA, and DL offers more connections from ATL than AA out of MIA.


The key missing piece here is that MIA is a major O&D market.

Arguing that ATL can seamlessly replace MIA for SA traffic is like wondering why STL isn't a major hub instead of DFW.
2020: SFO DFW IAH HOU CLT MEX BIS MIA GUA ORD DTW LGA BOS LHR DUB BFS BHD STN OAK PHL ISP JFK SJC DEN SJU LAS TXL GDL
 
n2dru
Posts: 192
Joined: Thu Nov 09, 2017 7:02 am

Re: LATAM moving towards bankruptcy

Sun May 24, 2020 6:05 am

Antarius wrote:
flyinghippo wrote:
davidjohnson6 wrote:
At the risk of getting into deep trouble by writing this, large numbers of people in South America seems to have a deep desire to go to Miami. Atlanta just doesn't exert the same passion


Your point is sound and logical, you won't get into trouble with that statement.

Let me put it from a SA passenger perspective...

Before DL's JV with LATAM:
If anyone from SA wants to go to Miami, they fly to Miami on LATAM or AA
If anyone from SA wants to go to anywhere else in the US, they fly to Miami on LATAM or AA, go through US immigration and customs in MIA, and connect to their final destination.

After DL's VJ with LATAM:
If anyone from SA wants to go to Miami, they fly to Miami on LATAM
If anyone from SA wants to go to anywhere else in the US, they fly to Atlanta on LATAM or DL, go through US immigration and customs in ATL, and connect to their final destination.

From a passenger perspective, nothing has changed, and I'd argue that ATL provides a better port of entry experience than MIA, and DL offers more connections from ATL than AA out of MIA.


The key missing piece here is that MIA is a major O&D market.

Arguing that ATL can seamlessly replace MIA for SA traffic is like wondering why STL isn't a major hub instead of DFW.


ATL was never intended to replace MIA. MIA's O&D to SA can stand on its own. ATL will be complementary.
 
onwFan
Posts: 452
Joined: Wed Feb 03, 2016 4:02 am

Re: LATAM moving towards bankruptcy

Sun May 24, 2020 6:17 am

n2dru wrote:
Antarius wrote:
flyinghippo wrote:

Your point is sound and logical, you won't get into trouble with that statement.

Let me put it from a SA passenger perspective...

Before DL's JV with LATAM:
If anyone from SA wants to go to Miami, they fly to Miami on LATAM or AA
If anyone from SA wants to go to anywhere else in the US, they fly to Miami on LATAM or AA, go through US immigration and customs in MIA, and connect to their final destination.

After DL's VJ with LATAM:
If anyone from SA wants to go to Miami, they fly to Miami on LATAM
If anyone from SA wants to go to anywhere else in the US, they fly to Atlanta on LATAM or DL, go through US immigration and customs in ATL, and connect to their final destination.

From a passenger perspective, nothing has changed, and I'd argue that ATL provides a better port of entry experience than MIA, and DL offers more connections from ATL than AA out of MIA.


The key missing piece here is that MIA is a major O&D market.

Arguing that ATL can seamlessly replace MIA for SA traffic is like wondering why STL isn't a major hub instead of DFW.


ATL was never intended to replace MIA. MIA's O&D to SA can stand on its own. ATL will be complementary.

As pointed out by others above, it will not be easy to sustain the level of service that LA had at MIA just for O&D (and then ATL for feed) in the near future post covid, whereas MIA already serves the dual purpose for AA.
 
n2dru
Posts: 192
Joined: Thu Nov 09, 2017 7:02 am

Re: LATAM moving towards bankruptcy

Sun May 24, 2020 6:31 am

onwFan wrote:
n2dru wrote:
Antarius wrote:

The key missing piece here is that MIA is a major O&D market.

Arguing that ATL can seamlessly replace MIA for SA traffic is like wondering why STL isn't a major hub instead of DFW.


ATL was never intended to replace MIA. MIA's O&D to SA can stand on its own. ATL will be complementary.

As pointed out by others above, it will not be easy to sustain the level of service that LA had at MIA just for O&D (and then ATL for feed) in the near future post covid, whereas MIA already serves the dual purpose for AA.


The same can be said for most international routes into the US right now. AA would not be providing a tremendous amount of connections out of MIA because the traffic isn't there and what is they would want on their own planes. Once traffic recovers MIA o&d and Atlanta connections could work in unison.
 
incitatus
Posts: 3376
Joined: Wed Feb 09, 2005 1:49 am

Re: LATAM moving towards bankruptcy

Sun May 24, 2020 2:09 pm

davidjohnson6 wrote:
Before - AA + LATAM needed to fly only MIA-South America. Can deploy very large aircraft as routes will be fat
After - DL+LATAM need to duplicate many routes, flying to both ATL and MIA from South America. Not a problem from Sao Paulo, but not so great from somewhere like Recife where routes are a bit thinner and there may not be profitable demand for a split focus city


This is an excellent point. There is no denying it, in spite of the several futile attempts by other posters.

The more traffic a hub can aggregate, the stronger it becomes.

Miami is a hyper important destination for Latin America. There is no combination that can add Miami-bound traffic to connections to all over North America like Miami itself.

Say LATAM with AA can sell 150 tickets on a flight from a city in Latin America, and half of those are bound to Miami and half beyond. What happens under LATAM with DL? That flight does not exist. There are three types of markets where LATAM can survive with DL: 1. They are not centered on MIA-bound travel. 2. They are vast majority MIA-bound; and 3.They are very large.

All talk about LATAM and Delta and Miami misses the real opportunity for DL with LATAM: JFK. It too serves a huge local market for Latin America. While the geography isn't ideal, DL has strong connectivity there.
I do not consume Murdoch products including the Wall Street Journal
 
tphuang
Posts: 5234
Joined: Tue Mar 14, 2017 2:04 pm

Re: LATAM moving towards bankruptcy

Sun May 24, 2020 2:12 pm

incitatus wrote:
davidjohnson6 wrote:
Before - AA + LATAM needed to fly only MIA-South America. Can deploy very large aircraft as routes will be fat
After - DL+LATAM need to duplicate many routes, flying to both ATL and MIA from South America. Not a problem from Sao Paulo, but not so great from somewhere like Recife where routes are a bit thinner and there may not be profitable demand for a split focus city


This is an excellent point. There is no denying it, in spite of the several futile attempts by other posters.

The more traffic a hub can aggregate, the stronger it becomes.

Miami is a hyper important destination for Latin America. There is no combination that can add Miami-bound traffic to connections to all over North America like Miami itself.

Say LATAM with AA can sell 150 tickets on a flight from a city in Latin America, and half of those are bound to Miami and half beyond. What happens under LATAM with DL? That flight does not exist. There are three types of markets where LATAM can survive with DL: 1. They are not centered on MIA-bound travel. 2. They are vast majority MIA-bound; and 3.They are very large.

All talk about LATAM and Delta and Miami misses the real opportunity for DL with LATAM: JFK. It too serves a huge local market for Latin America. While the geography isn't ideal, DL has strong connectivity there.

Which city with large demand to South America would make sense to connect at jfk? Boston maybe? But that’s not a huge market to South America.

Jfk will always be a more o&d market.
 
fcogafa
Posts: 1273
Joined: Fri May 16, 2008 4:37 pm

Re: LATAM moving towards bankruptcy

Sun May 24, 2020 2:17 pm

Presumably Delta was aware of these points when they took the decision to partner with Latam and still decided that it was a good business proposition?
 
User avatar
Polot
Posts: 10642
Joined: Thu Jul 28, 2011 3:01 pm

Re: LATAM moving towards bankruptcy

Sun May 24, 2020 2:32 pm

fcogafa wrote:
Presumably Delta was aware of these points when they took the decision to partner with Latam and still decided that it was a good business proposition?

Air demand had yet to collapse to nothing when Delta made their decisions. If Delta had known covid-19 was coming they certainly would not have invested billions into LATAM and agree to take a bunch of their A350s.

While the lack of demand puts everyone (DL/AA/LATAM) on the same footing right now, it changes what might be “best” for LATAM in the recovery phase- demand is not going to go from 0 to 2019 level back in an instance.

But at this point there is not much DL/LATAM can do, it is what it is and they have to work with old decisions.
 
TonyClifton
Posts: 234
Joined: Thu May 14, 2020 3:19 pm

Re: LATAM moving towards bankruptcy

Sun May 24, 2020 2:36 pm

Polot wrote:
fcogafa wrote:
Presumably Delta was aware of these points when they took the decision to partner with Latam and still decided that it was a good business proposition?

Air demand had yet to collapse to nothing when Delta made their decisions. If Delta had known covid-19 was coming they certainly would not have invested billions into LATAM and agree to take a bunch of their A350s.

While the lack of demand puts everyone (DL/AA/LATAM) on the same footing right now, it changes what might be “best” for LATAM in the recovery phase- demand is not going to go from 0 to 2019 level back in an instance.

But at this point there is not much DL/LATAM can do, it is what it is and they have to work with old decisions.

You make the best of the cards you’re dealt. DL is going all in on the 350 and it gave them the opportunity to dispose of the 777 fleet and probably see some major efficiency gains there. If DL was still partnered with Gol rather than LATAM, I don’t know if that would have been markedly better or worse.
 
User avatar
Polot
Posts: 10642
Joined: Thu Jul 28, 2011 3:01 pm

Re: LATAM moving towards bankruptcy

Sun May 24, 2020 2:53 pm

TonyClifton wrote:
Polot wrote:
fcogafa wrote:
Presumably Delta was aware of these points when they took the decision to partner with Latam and still decided that it was a good business proposition?

Air demand had yet to collapse to nothing when Delta made their decisions. If Delta had known covid-19 was coming they certainly would not have invested billions into LATAM and agree to take a bunch of their A350s.

While the lack of demand puts everyone (DL/AA/LATAM) on the same footing right now, it changes what might be “best” for LATAM in the recovery phase- demand is not going to go from 0 to 2019 level back in an instance.

But at this point there is not much DL/LATAM can do, it is what it is and they have to work with old decisions.

You make the best of the cards you’re dealt. DL is going all in on the 350 and it gave them the opportunity to dispose of the 777 fleet and probably see some major efficiency gains there. If DL was still partnered with Gol rather than LATAM, I don’t know if that would have been markedly better or worse.

Yes, from DL’s perspective the current situation doesn’t change much for them in terms of US-South America market dynamics, other than the fact that just wasted a billion dollars to get here. It’s not like the absence of the LATAM deal would mean DL would be offering a MIA hub.

The question is at this time who would LA rather be teamed up with, AA or DL, and if that will have any ramifications if LA does go bankrupt and reorganizes (which may dilute or eliminate DL’s stake/influence in the newly organized company).
 
onwFan
Posts: 452
Joined: Wed Feb 03, 2016 4:02 am

Re: LATAM moving towards bankruptcy

Sun May 24, 2020 3:11 pm

Polot wrote:
TonyClifton wrote:
Polot wrote:
Air demand had yet to collapse to nothing when Delta made their decisions. If Delta had known covid-19 was coming they certainly would not have invested billions into LATAM and agree to take a bunch of their A350s.

While the lack of demand puts everyone (DL/AA/LATAM) on the same footing right now, it changes what might be “best” for LATAM in the recovery phase- demand is not going to go from 0 to 2019 level back in an instance.

But at this point there is not much DL/LATAM can do, it is what it is and they have to work with old decisions.

You make the best of the cards you’re dealt. DL is going all in on the 350 and it gave them the opportunity to dispose of the 777 fleet and probably see some major efficiency gains there. If DL was still partnered with Gol rather than LATAM, I don’t know if that would have been markedly better or worse.

Yes, from DL’s perspective the current situation doesn’t change much for them in terms of US-South America market dynamics, other than the fact that just wasted a billion dollars to get here. It’s not like the absence of the LATAM deal would mean DL would be offering a MIA hub.

The question is at this time who would LA rather be teamed up with, AA or DL, and if that will have any ramifications if LA does go bankrupt and reorganizes (which may dilute or eliminate DL’s stake/influence in the newly organized company).

Indeed. The deal never had negative implications for DL (except for the money and the responsibility for the A350s, which in retrospect was a bad decision). But it was npt impossible to see that the deal was a big downgrade for LATAM then or now; and it shows in the fact that we are discussing this thread now. Depending on how the situation at LA develops, this could be a nice case study for one of the biggest blunders in aviation strategy.
 
incitatus
Posts: 3376
Joined: Wed Feb 09, 2005 1:49 am

Re: LATAM moving towards bankruptcy

Sun May 24, 2020 3:21 pm

tphuang wrote:
Which city with large demand to South America would make sense to connect at jfk? Boston maybe? But that’s not a huge market to South America.

Jfk will always be a more o&d market.


BOS, BWI, SYR, DCA, ROC, BTV, BUF, YUL, YYZ, PIT, CLE, DTW, BDA. Before you say these are small, remember hubs are made of aggregating traffic from small markets. Big markets have nonstop service.

BOS is an important market for South America, especially Brazil. Pre-COVID, LATAM served BOS-GRU.

JFK is also a popular connection point from the West Coast to Brazil, even though it is a longer trip.
I do not consume Murdoch products including the Wall Street Journal
 
Alias1024
Posts: 2659
Joined: Mon Oct 25, 2004 11:13 am

Re: LATAM moving towards bankruptcy

Sun May 24, 2020 3:24 pm

davidjohnson6 wrote:
To echo usflyer's point.... the extrael cost of flying to both ATL and MIA will significantly outweigh the increase in connectivity that ATL provides. Furthermore, because MIA is so far south it requires almost zero backtracking for flights in the far south of the USA - eg to visit the mouse / theme parks in Orlando


Before COVID Delta had already announced connection flights out of Miami to Orlando and Tampa, the two other large markets south of Atlanta. If they see the business case they could easily add connection flights from MIA to Jacksonville and the Florida panhandle.

ATL isn’t going to be a backtrack of any significance for the rest of the country, and will have far better connecting opportunities than MIA/AA ever offered due to the size of the hub Delta has in Atlanta.
It is a mistake to think you can solve any major problems with just potatoes.
 
Vicenza
Posts: 127
Joined: Sun Apr 19, 2020 3:21 pm

Re: LATAM moving towards bankruptcy

Sun May 24, 2020 4:32 pm

FedexL1011 wrote:
flyinghippo wrote:
You see DL's major investments/partners go down one by one... LATAM, VA, VS. KE and AF/KL are also in trouble but less so.

I will add that VS is in trouble because the English government won't provide relief because of the 49% investment by DL. VA entered voluntary administration and they're still flying, albeit a heavily reduced schedule but to say that these airlines wont exist post COVID is poorly speculated.


Firstly, there is no such thing as the "English" government. Secondly, as VS is 49% owned by DL is quite correct to be very hesitant in support and to ensure safeguards will be in place to ensure not one penny goes to assist DL
 
Westerwaelder
Posts: 241
Joined: Fri Apr 03, 2020 12:27 pm

Re: LATAM moving towards bankruptcy

Sun May 24, 2020 4:51 pm

Vicenza wrote:
FedexL1011 wrote:
flyinghippo wrote:
You see DL's major investments/partners go down one by one... LATAM, VA, VS. KE and AF/KL are also in trouble but less so.

I will add that VS is in trouble because the English government won't provide relief because of the 49% investment by DL. VA entered voluntary administration and they're still flying, albeit a heavily reduced schedule but to say that these airlines wont exist post COVID is poorly speculated.


Firstly, there is no such thing as the "English" government. Secondly, as VS is 49% owned by DL is quite correct to be very hesitant in support and to ensure safeguards will be in place to ensure not one penny goes to assist DL


Their hesitation is about the fact that any money given to VS will have to be an unsecured loan as VS have no unencumbered assets. That means a substantial risk for tax payers. The ownership conversation has largely centred around the Virgin Group/Virgin Holding which ultimately is based in a tax haven.
 
Antarius
Posts: 2430
Joined: Thu Apr 13, 2017 1:27 pm

Re: LATAM moving towards bankruptcy

Sun May 24, 2020 5:24 pm

onwFan wrote:
Polot wrote:
TonyClifton wrote:
You make the best of the cards you’re dealt. DL is going all in on the 350 and it gave them the opportunity to dispose of the 777 fleet and probably see some major efficiency gains there. If DL was still partnered with Gol rather than LATAM, I don’t know if that would have been markedly better or worse.

Yes, from DL’s perspective the current situation doesn’t change much for them in terms of US-South America market dynamics, other than the fact that just wasted a billion dollars to get here. It’s not like the absence of the LATAM deal would mean DL would be offering a MIA hub.

The question is at this time who would LA rather be teamed up with, AA or DL, and if that will have any ramifications if LA does go bankrupt and reorganizes (which may dilute or eliminate DL’s stake/influence in the newly organized company).

Indeed. The deal never had negative implications for DL (except for the money and the responsibility for the A350s, which in retrospect was a bad decision). But it was npt impossible to see that the deal was a big downgrade for LATAM then or now; and it shows in the fact that we are discussing this thread now. Depending on how the situation at LA develops, this could be a nice case study for one of the biggest blunders in aviation strategy.


I agree with this. It was a downgrade for LA, however they had to weigh the downgrade against the 2 billion in cash. Given their financial position, they had to give up AA and in return got a nice capital infusion.

The deal, meanwhile was smart for DL. It was the best they could do to get a foothold in SA without having a strong operational history there and a key hub (MIA). My only objections are to the posts that act like DL can seamlessly replace AA and MIA.

In my opinion, all 3 parties lost with this deal in hindsight. But at the time, it made sense for DL.
2020: SFO DFW IAH HOU CLT MEX BIS MIA GUA ORD DTW LGA BOS LHR DUB BFS BHD STN OAK PHL ISP JFK SJC DEN SJU LAS TXL GDL
 
Antarius
Posts: 2430
Joined: Thu Apr 13, 2017 1:27 pm

Re: LATAM moving towards bankruptcy

Sun May 24, 2020 5:27 pm

fcogafa wrote:
Presumably Delta was aware of these points when they took the decision to partner with Latam and still decided that it was a good business proposition?


They were. They also didn't have a whole lot of other options. It was either continue to be a nobody in SA or make a move, which may not be perfect, to grow. The deal made perfect sense for DL.

That said, LA gave up some of the AA and MIA benefits in exchange for DL and their cash. That's all. ATL + DL at MIA cannot and will not replace AA at MIA. But that was a trade-off LA had to make.
2020: SFO DFW IAH HOU CLT MEX BIS MIA GUA ORD DTW LGA BOS LHR DUB BFS BHD STN OAK PHL ISP JFK SJC DEN SJU LAS TXL GDL
 
LawAndOrder
Posts: 262
Joined: Tue Oct 27, 2015 1:56 pm

Re: LATAM moving towards bankruptcy

Sun May 24, 2020 5:53 pm

It’s crazy how so many people here speak opinions as fact. LA would be able to recapture the AA feed with delta adding flights to the top 20 markets in MIA. I think people believe that AA brought more to LA than they really did. That was why it was so easy for DL to take them away. It wasn’t just the cash.

DL will never be AA at mia but I would argue they don’t have to. LA could stand on their own (mia is good because its mostly o/d). DL Service will be supplemental.
 
onwFan
Posts: 452
Joined: Wed Feb 03, 2016 4:02 am

Re: LATAM moving towards bankruptcy

Sun May 24, 2020 6:23 pm

LawAndOrder wrote:
It’s crazy how so many people here speak opinions as fact. LA would be able to recapture the AA feed with delta adding flights to the top 20 markets in MIA. I think people believe that AA brought more to LA than they really did. That was why it was so easy for DL to take them away. It wasn’t just the cash.

DL will never be AA at mia but I would argue they don’t have to. LA could stand on their own (mia is good because its mostly o/d). DL Service will be supplemental.

The thing is that it is even more crazy that some people think somehow DL can replace or will bring more to LA than AA did, and that too with ATL.
 
jordanh
Posts: 325
Joined: Fri Sep 08, 2017 11:56 pm

Re: LATAM moving towards bankruptcy

Sun May 24, 2020 7:14 pm

onwFan wrote:
LawAndOrder wrote:
It’s crazy how so many people here speak opinions as fact. LA would be able to recapture the AA feed with delta adding flights to the top 20 markets in MIA. I think people believe that AA brought more to LA than they really did. That was why it was so easy for DL to take them away. It wasn’t just the cash. DL will never be AA at mia but I would argue they don’t have to. LA could stand on their own (mia is good because its mostly o/d). DL Service will be supplemental.

The thing is that it is even more crazy that some people think somehow DL can replace or will bring more to LA than AA did, and that too with ATL.



Here at LA, we are very happy to have DL as a partner. The claims that AA brought a lot to us are myths; even when they were our "partner", we could rely on cooperation from Delta in case of IROP or other issues much more than we could count on AA. Everyone seems to overlook the fact that Miami connections are not the only important needs; we can feed Delta flights in SCL, LIM, GRU, and GIG, and their flights from there to ATL offer many more connections than AA ever offered from MIA.

I know an "owfan" might not like it, and might not like to admit it, but once this pandemic is gone, we will be in a much stronger position than we would have been with AA. Actually, you probably should be worrying a lot more about AA than about LA. We will be okay.


p.s. Just because someone does not agree with you does not make them "crazy".
 
onwFan
Posts: 452
Joined: Wed Feb 03, 2016 4:02 am

Re: LATAM moving towards bankruptcy

Sun May 24, 2020 7:58 pm

jordanh wrote:
onwFan wrote:
LawAndOrder wrote:
It’s crazy how so many people here speak opinions as fact. LA would be able to recapture the AA feed with delta adding flights to the top 20 markets in MIA. I think people believe that AA brought more to LA than they really did. That was why it was so easy for DL to take them away. It wasn’t just the cash. DL will never be AA at mia but I would argue they don’t have to. LA could stand on their own (mia is good because its mostly o/d). DL Service will be supplemental.

The thing is that it is even more crazy that some people think somehow DL can replace or will bring more to LA than AA did, and that too with ATL.



Here at LA, we are very happy to have DL as a partner. The claims that AA brought a lot to us are myths; even when they were our "partner", we could rely on cooperation from Delta in case of IROP or other issues much more than we could count on AA. Everyone seems to overlook the fact that Miami connections are not the only important needs; we can feed Delta flights in SCL, LIM, GRU, and GIG, and their flights from there to ATL offer many more connections than AA ever offered from MIA.

I know an "owfan" might not like it, and might not like to admit it, but once this pandemic is gone, we will be in a much stronger position than we would have been with AA. Actually, you probably should be worrying a lot more about AA than about LA. We will be okay.


p.s. Just because someone does not agree with you does not make them "crazy".

Good for you, and all the best with your future ventures with ATL! As for ‘crazy’, I was merely resonding to coments on craziness by the original poster, so please respond to them directly.
 
usflyer msp
Posts: 3811
Joined: Tue May 23, 2000 11:50 am

Re: LATAM moving towards bankruptcy

Sun May 24, 2020 8:04 pm

jordanh wrote:
onwFan wrote:
LawAndOrder wrote:
It’s crazy how so many people here speak opinions as fact. LA would be able to recapture the AA feed with delta adding flights to the top 20 markets in MIA. I think people believe that AA brought more to LA than they really did. That was why it was so easy for DL to take them away. It wasn’t just the cash. DL will never be AA at mia but I would argue they don’t have to. LA could stand on their own (mia is good because its mostly o/d). DL Service will be supplemental.

The thing is that it is even more crazy that some people think somehow DL can replace or will bring more to LA than AA did, and that too with ATL.



Here at LA, we are very happy to have DL as a partner. The claims that AA brought a lot to us are myths; even when they were our "partner", we could rely on cooperation from Delta in case of IROP or other issues much more than we could count on AA. Everyone seems to overlook the fact that Miami connections are not the only important needs; we can feed Delta flights in SCL, LIM, GRU, and GIG, and their flights from there to ATL offer many more connections than AA ever offered from MIA.

I know an "owfan" might not like it, and might not like to admit it, but once this pandemic is gone, we will be in a much stronger position than we would have been with AA. Actually, you probably should be worrying a lot more about AA than about LA. We will be okay.


p.s. Just because someone does not agree with you does not make them "crazy".


That is way overly rosy thinking.

AA offered way more connectivity at SCL, LIM, and GRU than DL - AA has multiple daily flights to MIA, DFW and often JFK. BTW, LA has been basically non-existent at GIG for quite some time.

I question whether DL is more helpful during IRRops than AA. Based upon experiences in the US, DL is generally the worst to deal with when interlining pax.

DL adding the top 20 markets at MIA. You speak as if that is something DL could do at the drop of a hat and AA is not going to ruthlessly retaliate. If DL did try this, AA will always have the benefit of much deeper schedule and a tight grip on the local MIA business pax.

Wishful thinking. LA is in trouble.
 
flyinghippo
Posts: 768
Joined: Thu Aug 11, 2005 12:48 am

Re: LATAM moving towards bankruptcy

Sun May 24, 2020 9:52 pm

usflyer msp wrote:
jordanh wrote:
onwFan wrote:
The thing is that it is even more crazy that some people think somehow DL can replace or will bring more to LA than AA did, and that too with ATL.



Here at LA, we are very happy to have DL as a partner. The claims that AA brought a lot to us are myths; even when they were our "partner", we could rely on cooperation from Delta in case of IROP or other issues much more than we could count on AA. Everyone seems to overlook the fact that Miami connections are not the only important needs; we can feed Delta flights in SCL, LIM, GRU, and GIG, and their flights from there to ATL offer many more connections than AA ever offered from MIA.

I know an "owfan" might not like it, and might not like to admit it, but once this pandemic is gone, we will be in a much stronger position than we would have been with AA. Actually, you probably should be worrying a lot more about AA than about LA. We will be okay.


p.s. Just because someone does not agree with you does not make them "crazy".


That is way overly rosy thinking.

AA offered way more connectivity at SCL, LIM, and GRU than DL - AA has multiple daily flights to MIA, DFW and often JFK. BTW, LA has been basically non-existent at GIG for quite some time.

I question whether DL is more helpful during IRRops than AA. Based upon experiences in the US, DL is generally the worst to deal with when interlining pax.

DL adding the top 20 markets at MIA. You speak as if that is something DL could do at the drop of a hat and AA is not going to ruthlessly retaliate. If DL did try this, AA will always have the benefit of much deeper schedule and a tight grip on the local MIA business pax.

Wishful thinking. LA is in trouble.


I'd say ALL airlines around the globe are in deep doo doo - the key is if they have enough cash reserve and cut down their cash burn rate to survive until the traffic returns to a point they can start to make a profit again.

Let's talk about scenarios pre-COVID. In terms of MIA vs ATL - I agree that it's much better to fly to a destination that has both O/D and connecting like MIA, however, I believe LA has enough O/D traffic to MIA on their own. Maybe LA would have downgraded from 77W to 787/767 to MIA for OD passengers, and DL can carry passengers to ATL for connecting to the rest of the US with a 330. Before everything changed, DL was also going to add more flights to MIA - they don't have to turn MIA into anything into a hub like AA, just enough to service cities that would require back trekking from ATL (i.e. MIA-MCO/FLL/TPA/MSY) DL has a lot of A220s that are perfectly suited for these kinds of routes.

LA still is the biggest airline for South America, their passengers will use them no matter who is connecting them in the US (In Atlanta) or in EU (AF/KL). The O/D market for JFK/MIA/MAD will remain strong and does not impact who LA teams up with.

Also - we should all remember that the JV between AA and LA was rejected, thus the value of the partnership was severely reduced before DL came into the picture.

Today - who knows what will happen. If LA survives and traffic goes back to pre-COVID in 2022, I still think LA made a good decision partnering with DL, and I'd still argue that for connecting passengers in the US, DL still offers more connections out of ATL than AA from MIA.
 
dcajet
Posts: 4693
Joined: Sun Aug 01, 2004 9:31 am

Re: LATAM moving towards bankruptcy

Sun May 24, 2020 10:24 pm

Not good news for LA; they are planning to restart GRU-MIA next month.

The US imposes a travel ban from Brazil, effective May 28th.


https://www.cnbc.com/2020/05/24/trump-s ... erica.html
Keep calm and wash your hands.
 
n9801f
Posts: 229
Joined: Tue Apr 13, 2004 8:29 am

Re: LATAM moving towards bankruptcy

Sun May 24, 2020 11:35 pm

flyinghippo wrote:
usflyer msp wrote:
jordanh wrote:


Here at LA, we are very happy to have DL as a partner. The claims that AA brought a lot to us are myths; even when they were our "partner", we could rely on cooperation from Delta in case of IROP or other issues much more than we could count on AA. Everyone seems to overlook the fact that Miami connections are not the only important needs; we can feed Delta flights in SCL, LIM, GRU, and GIG, and their flights from there to ATL offer many more connections than AA ever offered from MIA.

I know an "owfan" might not like it, and might not like to admit it, but once this pandemic is gone, we will be in a much stronger position than we would have been with AA. Actually, you probably should be worrying a lot more about AA than about LA. We will be okay.


p.s. Just because someone does not agree with you does not make them "crazy".


That is way overly rosy thinking.

AA offered way more connectivity at SCL, LIM, and GRU than DL - AA has multiple daily flights to MIA, DFW and often JFK. BTW, LA has been basically non-existent at GIG for quite some time.

I question whether DL is more helpful during IRRops than AA. Based upon experiences in the US, DL is generally the worst to deal with when interlining pax.

DL adding the top 20 markets at MIA. You speak as if that is something DL could do at the drop of a hat and AA is not going to ruthlessly retaliate. If DL did try this, AA will always have the benefit of much deeper schedule and a tight grip on the local MIA business pax.

Wishful thinking. LA is in trouble.


I'd say ALL airlines around the globe are in deep doo doo - the key is if they have enough cash reserve and cut down their cash burn rate to survive until the traffic returns to a point they can start to make a profit again.

Let's talk about scenarios pre-COVID. In terms of MIA vs ATL - I agree that it's much better to fly to a destination that has both O/D and connecting like MIA, however, I believe LA has enough O/D traffic to MIA on their own. Maybe LA would have downgraded from 77W to 787/767 to MIA for OD passengers, and DL can carry passengers to ATL for connecting to the rest of the US with a 330. Before everything changed, DL was also going to add more flights to MIA - they don't have to turn MIA into anything into a hub like AA, just enough to service cities that would require back trekking from ATL (i.e. MIA-MCO/FLL/TPA/MSY) DL has a lot of A220s that are perfectly suited for these kinds of routes.

LA still is the biggest airline for South America, their passengers will use them no matter who is connecting them in the US (In Atlanta) or in EU (AF/KL). The O/D market for JFK/MIA/MAD will remain strong and does not impact who LA teams up with.

Also - we should all remember that the JV between AA and LA was rejected, thus the value of the partnership was severely reduced before DL came into the picture.

Today - who knows what will happen. If LA survives and traffic goes back to pre-COVID in 2022, I still think LA made a good decision partnering with DL, and I'd still argue that for connecting passengers in the US, DL still offers more connections out of ATL than AA from MIA.


Maybe LATAM’s “best partner” is different in normal and high-demand environments (DL) than in low-demand times (AA)? A good business analysis will reveal this.

Also, while it’s true that ATL has more connecting destinations than MIA, that is not as valuable for South America as it is in other cases, because South American OD is heavily concentrated in NYC and Florida.
 
OB1504
Posts: 3966
Joined: Tue Jul 27, 2004 5:10 am

Re: LATAM moving towards bankruptcy

Sun May 24, 2020 11:44 pm

Antarius wrote:
fcogafa wrote:
Presumably Delta was aware of these points when they took the decision to partner with Latam and still decided that it was a good business proposition?


They were. They also didn't have a whole lot of other options. It was either continue to be a nobody in SA or make a move, which may not be perfect, to grow. The deal made perfect sense for DL.

That said, LA gave up some of the AA and MIA benefits in exchange for DL and their cash. That's all. ATL + DL at MIA cannot and will not replace AA at MIA. But that was a trade-off LA had to make.


They don't need to replace AA at MIA. Once a joint venture is approved, LA can focus on O&D to MIA and DL can take the onward connecting traffic via ATL. Passengers will in turn gain a much better connecting experience at ATL than at MIA, where AA/LA connections involved walking to the opposite side of the airport and having to reclear security without a dedicated lane for connecting passengers.

DL already serves the major South American cities from ATL so it's not like LA would have to duplicate any MIA routes to ATL when the flights already exist. MIA has strong enough O&D that they can get by with minimal feed, like Avianca already does.
 
tphuang
Posts: 5234
Joined: Tue Mar 14, 2017 2:04 pm

Re: LATAM moving towards bankruptcy

Sun May 24, 2020 11:49 pm

n9801f wrote:
flyinghippo wrote:
usflyer msp wrote:

That is way overly rosy thinking.

AA offered way more connectivity at SCL, LIM, and GRU than DL - AA has multiple daily flights to MIA, DFW and often JFK. BTW, LA has been basically non-existent at GIG for quite some time.

I question whether DL is more helpful during IRRops than AA. Based upon experiences in the US, DL is generally the worst to deal with when interlining pax.

DL adding the top 20 markets at MIA. You speak as if that is something DL could do at the drop of a hat and AA is not going to ruthlessly retaliate. If DL did try this, AA will always have the benefit of much deeper schedule and a tight grip on the local MIA business pax.

Wishful thinking. LA is in trouble.


I'd say ALL airlines around the globe are in deep doo doo - the key is if they have enough cash reserve and cut down their cash burn rate to survive until the traffic returns to a point they can start to make a profit again.

Let's talk about scenarios pre-COVID. In terms of MIA vs ATL - I agree that it's much better to fly to a destination that has both O/D and connecting like MIA, however, I believe LA has enough O/D traffic to MIA on their own. Maybe LA would have downgraded from 77W to 787/767 to MIA for OD passengers, and DL can carry passengers to ATL for connecting to the rest of the US with a 330. Before everything changed, DL was also going to add more flights to MIA - they don't have to turn MIA into anything into a hub like AA, just enough to service cities that would require back trekking from ATL (i.e. MIA-MCO/FLL/TPA/MSY) DL has a lot of A220s that are perfectly suited for these kinds of routes.

LA still is the biggest airline for South America, their passengers will use them no matter who is connecting them in the US (In Atlanta) or in EU (AF/KL). The O/D market for JFK/MIA/MAD will remain strong and does not impact who LA teams up with.

Also - we should all remember that the JV between AA and LA was rejected, thus the value of the partnership was severely reduced before DL came into the picture.

Today - who knows what will happen. If LA survives and traffic goes back to pre-COVID in 2022, I still think LA made a good decision partnering with DL, and I'd still argue that for connecting passengers in the US, DL still offers more connections out of ATL than AA from MIA.


Maybe LATAM’s “best partner” is different in normal and high-demand environments (DL) than in low-demand times (AA)? A good business analysis will reveal this.

Also, while it’s true that ATL has more connecting destinations than MIA, that is not as valuable for South America as it is in other cases, because South American OD is heavily concentrated in NYC and Florida.


Right, in normal times, probably 70% of O&D to south america are from NYC and Florida or other places that don't make sense to connect at ATL like SJU or LAX or LAS.

It's kind of ridiculous to say that losing dominant carrier partnership at the largest NA market and largest 2 European market is not a big loss.

Plenty of people buy connecting itineraries of code shared and interlined alliance partners in OW without JV. I used to always pick OW airlines when I was EXP regardless of whether or not they had JV with AA. That was a huge benefit of being in OW. And now all they got is DL.
 
User avatar
Gonzalo
Posts: 1855
Joined: Tue Aug 23, 2005 2:43 am

Re: LATAM moving towards bankruptcy

Mon May 25, 2020 12:11 am

PPVLC wrote:
Gonzalo wrote:
Well...yes...Every single privately owned airline in the whole planet is “towards bankruptcy” in the current scenario. Only the Airlines supported by endless flows of money like Emirates or Etihad can escape to the “towards bankruptcy” qualification. Same for Hotels, Cruise Ships and any leisure and travel related industry, since the demand will be literally flattened for several months, probably a couple of years, even after the borders re open and even after we start to have a vaccine available.
In the specific case of South America some Airlines could survive until August, others could reach October and Copa Airlines could resist until the end of the year, but that’s all.
The only way to avoid bankruptcy (if this current scenario remains unchanged in the continent ) will be through government loans or credits, the real question will be when, how much and under what kind of conditions this will be materialized...particularly in countries like Chile and Brazil where the uneducated and ignorant people doesn’t have a clue about the importance of aviation and the leftist will reject any loans ( unless they can impose some ridiculous and unfeasable conditions as usual ).


I'm intrigued by your statement " where the uneducated and ignorant people doesn’t have a clue about the importance of aviation and the leftist will reject any loans ( unless they can impose some ridiculous and unfeasable conditions as usual )" . Would you kindly elaborate on that? How would the uneducated interfere -either negatively or positively - in Latam's possible bankrupcy? Who would be the loan rejecting leftists in this case? :scratchchin:


Ok, first of all I recon that my word choosing was poor when I said uneducated and ignorant people without a clear boundary to aviation related things. All in all the vast majority of people is vastly ignorant regarding aviation and we ( the aviation nuts community ) are a very small group compared to the population. What I’m saying is, most of the people here in Chile thinks airlines are like any other company that tries to maximize earnings ( which is true ) but missing the relevance the airlines have in terms of connectivity, Jobs, etc. Etc. Here in Chile we had several months of social unrest well before the virus crisis and, politics aside, I’m completely sure that any kind of government aid to Latam will be blocked at the congress because it looks much more popular and Robin Hood-ish to let Latam fall and give that money to “feed the poor”. Specially considering that in the mental picture of the average citizen in Chile Latam is still a feud of current President S. Piñera and its partners. Like it or not, unlike other airlines in the world in similar situation, the chances of Latam of getting any support from the State/government are slim, simply because the money will be blocked by people in the Congress who are clueless regarding the aviation industry and the impact of Latam going out of bussines.

Rgds.
G.
Gear Up!!: DC-3 / EMB-110 / FH-227 / A318-19-20-21 / B732 / B763 / B789 / B788 / A343 / ATR72-600
 
Antarius
Posts: 2430
Joined: Thu Apr 13, 2017 1:27 pm

Re: LATAM moving towards bankruptcy

Mon May 25, 2020 12:22 am

OB1504 wrote:
Antarius wrote:
fcogafa wrote:
Presumably Delta was aware of these points when they took the decision to partner with Latam and still decided that it was a good business proposition?


They were. They also didn't have a whole lot of other options. It was either continue to be a nobody in SA or make a move, which may not be perfect, to grow. The deal made perfect sense for DL.

That said, LA gave up some of the AA and MIA benefits in exchange for DL and their cash. That's all. ATL + DL at MIA cannot and will not replace AA at MIA. But that was a trade-off LA had to make.


They don't need to replace AA at MIA. Once a joint venture is approved, LA can focus on O&D to MIA and DL can take the onward connecting traffic via ATL. Passengers will in turn gain a much better connecting experience at ATL than at MIA, where AA/LA connections involved walking to the opposite side of the airport and having to reclear security without a dedicated lane for connecting passengers.

DL already serves the major South American cities from ATL so it's not like LA would have to duplicate any MIA routes to ATL when the flights already exist. MIA has strong enough O&D that they can get by with minimal feed, like Avianca already does.


There's still a sizable scale gap between this and what was there before. DL serving SA is paltry compared to what AA has.

The key differentiator is the combination of O&D and connections. If it wasn't important, STL would still be a hub.
2020: SFO DFW IAH HOU CLT MEX BIS MIA GUA ORD DTW LGA BOS LHR DUB BFS BHD STN OAK PHL ISP JFK SJC DEN SJU LAS TXL GDL
 
n9801f
Posts: 229
Joined: Tue Apr 13, 2004 8:29 am

Re: LATAM moving towards bankruptcy

Mon May 25, 2020 12:35 am

Gonzalo wrote:
PPVLC wrote:
Gonzalo wrote:
Well...yes...Every single privately owned airline in the whole planet is “towards bankruptcy” in the current scenario. Only the Airlines supported by endless flows of money like Emirates or Etihad can escape to the “towards bankruptcy” qualification. Same for Hotels, Cruise Ships and any leisure and travel related industry, since the demand will be literally flattened for several months, probably a couple of years, even after the borders re open and even after we start to have a vaccine available.
In the specific case of South America some Airlines could survive until August, others could reach October and Copa Airlines could resist until the end of the year, but that’s all.
The only way to avoid bankruptcy (if this current scenario remains unchanged in the continent ) will be through government loans or credits, the real question will be when, how much and under what kind of conditions this will be materialized...particularly in countries like Chile and Brazil where the uneducated and ignorant people doesn’t have a clue about the importance of aviation and the leftist will reject any loans ( unless they can impose some ridiculous and unfeasable conditions as usual ).


I'm intrigued by your statement " where the uneducated and ignorant people doesn’t have a clue about the importance of aviation and the leftist will reject any loans ( unless they can impose some ridiculous and unfeasable conditions as usual )" . Would you kindly elaborate on that? How would the uneducated interfere -either negatively or positively - in Latam's possible bankrupcy? Who would be the loan rejecting leftists in this case? :scratchchin:


Ok, first of all I recon that my word choosing was poor when I said uneducated and ignorant people without a clear boundary to aviation related things. All in all the vast majority of people is vastly ignorant regarding aviation and we ( the aviation nuts community ) are a very small group compared to the population. What I’m saying is, most of the people here in Chile thinks airlines are like any other company that tries to maximize earnings ( which is true ) but missing the relevance the airlines have in terms of connectivity, Jobs, etc. Etc. Here in Chile we had several months of social unrest well before the virus crisis and, politics aside, I’m completely sure that any kind of government aid to Latam will be blocked at the congress because it looks much more popular and Robin Hood-ish to let Latam fall and give that money to “feed the poor”. Specially considering that in the mental picture of the average citizen in Chile Latam is still a feud of current President S. Piñera and its partners. Like it or not, unlike other airlines in the world in similar situation, the chances of Latam of getting any support from the State/government are slim, simply because the money will be blocked by people in the Congress who are clueless regarding the aviation industry and the impact of Latam going out of bussines.

Rgds.
G.

Those are very helpful perspectives, especially the insight into the Chilean political situation.

And it’s helpful to be reminded of the unrest preceding Covid.

So LATAM is wearied from a prolonged hardship. And from what you say, whatever help it gets is unlikely to come from the Chilean government.
 
User avatar
Gonzalo
Posts: 1855
Joined: Tue Aug 23, 2005 2:43 am

Re: LATAM moving towards bankruptcy

Mon May 25, 2020 1:43 am

n9801f wrote:
Gonzalo wrote:
PPVLC wrote:


Ok, first of all I recon that my word choosing was poor when I said uneducated and ignorant people without a clear boundary to aviation related things. All in all the vast majority of people is vastly ignorant regarding aviation and we ( the aviation nuts community ) are a very small group compared to the population. What I’m saying is, most of the people here in Chile thinks airlines are like any other company that tries to maximize earnings ( which is true ) but missing the relevance the airlines have in terms of connectivity, Jobs, etc. Etc. Here in Chile we had several months of social unrest well before the virus crisis and, politics aside, I’m completely sure that any kind of government aid to Latam will be blocked at the congress because it looks much more popular and Robin Hood-ish to let Latam fall and give that money to “feed the poor”. Specially considering that in the mental picture of the average citizen in Chile Latam is still a feud of current President S. Piñera and its partners. Like it or not, unlike other airlines in the world in similar situation, the chances of Latam of getting any support from the State/government are slim, simply because the money will be blocked by people in the Congress who are clueless regarding the aviation industry and the impact of Latam going out of bussines.

Rgds.
G.

Those are very helpful perspectives, especially the insight into the Chilean political situation.

And it’s helpful to be reminded of the unrest preceding Covid.

So LATAM is wearied from a prolonged hardship. And from what you say, whatever help it gets is unlikely to come from the Chilean government.


I would love to be corrected in the future, but the reality is, while the government is giving help to the most affected part of the population right now ( they are bringing boxes with essential food and cleaning products door by door across the country ), the opposition is claiming that the help is not enough and that the government should do a massive distribution of cash to help the people ( probably assuming the money comes from the sky in the form of a miraculous rain ). The answer of the government is “we have limited funds and we need to distribute the help over time because we don’t know for how many months in the future we’ll have this critical scenario”.
In summary, I can’t imagine any realistic scenario in which Latam ask the government for aid ( you must consider that to be relevant and useful, any Help from the state should be in the order of hundreds of millions of US dollars, otherwise it will not help for enough time ), and the opposition allowing that considering that they are criticizing almost every step taken by the authorities in order to distribute help right now.
However I don’t think Latam will disappear, but the Latam we’ll see in 2021 will be very different, probably a small fraction of the airline we knew until September 2019.
Rgds
G.
Gear Up!!: DC-3 / EMB-110 / FH-227 / A318-19-20-21 / B732 / B763 / B789 / B788 / A343 / ATR72-600
 
flyinghippo
Posts: 768
Joined: Thu Aug 11, 2005 12:48 am

Re: LATAM moving towards bankruptcy

Mon May 25, 2020 2:18 am

n9801f wrote:
flyinghippo wrote:
usflyer msp wrote:

That is way overly rosy thinking.

AA offered way more connectivity at SCL, LIM, and GRU than DL - AA has multiple daily flights to MIA, DFW and often JFK. BTW, LA has been basically non-existent at GIG for quite some time.

I question whether DL is more helpful during IRRops than AA. Based upon experiences in the US, DL is generally the worst to deal with when interlining pax.

DL adding the top 20 markets at MIA. You speak as if that is something DL could do at the drop of a hat and AA is not going to ruthlessly retaliate. If DL did try this, AA will always have the benefit of much deeper schedule and a tight grip on the local MIA business pax.

Wishful thinking. LA is in trouble.


I'd say ALL airlines around the globe are in deep doo doo - the key is if they have enough cash reserve and cut down their cash burn rate to survive until the traffic returns to a point they can start to make a profit again.

Let's talk about scenarios pre-COVID. In terms of MIA vs ATL - I agree that it's much better to fly to a destination that has both O/D and connecting like MIA, however, I believe LA has enough O/D traffic to MIA on their own. Maybe LA would have downgraded from 77W to 787/767 to MIA for OD passengers, and DL can carry passengers to ATL for connecting to the rest of the US with a 330. Before everything changed, DL was also going to add more flights to MIA - they don't have to turn MIA into anything into a hub like AA, just enough to service cities that would require back trekking from ATL (i.e. MIA-MCO/FLL/TPA/MSY) DL has a lot of A220s that are perfectly suited for these kinds of routes.

LA still is the biggest airline for South America, their passengers will use them no matter who is connecting them in the US (In Atlanta) or in EU (AF/KL). The O/D market for JFK/MIA/MAD will remain strong and does not impact who LA teams up with.

Also - we should all remember that the JV between AA and LA was rejected, thus the value of the partnership was severely reduced before DL came into the picture.

Today - who knows what will happen. If LA survives and traffic goes back to pre-COVID in 2022, I still think LA made a good decision partnering with DL, and I'd still argue that for connecting passengers in the US, DL still offers more connections out of ATL than AA from MIA.


Maybe LATAM’s “best partner” is different in normal and high-demand environments (DL) than in low-demand times (AA)? A good business analysis will reveal this.

Also, while it’s true that ATL has more connecting destinations than MIA, that is not as valuable for South America as it is in other cases, because South American OD is heavily concentrated in NYC and Florida.


Then LA's flight to MIA/JFK will remain robust solely relying on the O/D traffic to those cities. For those who wish to go beyond that, DL to ATL/JFK from major cities in SA can do the trick. (IF everything goes back to normal, that is...)
 
n9801f
Posts: 229
Joined: Tue Apr 13, 2004 8:29 am

Re: LATAM moving towards bankruptcy

Mon May 25, 2020 4:27 am

flyinghippo wrote:
n9801f wrote:
flyinghippo wrote:

I'd say ALL airlines around the globe are in deep doo doo - the key is if they have enough cash reserve and cut down their cash burn rate to survive until the traffic returns to a point they can start to make a profit again.

Let's talk about scenarios pre-COVID. In terms of MIA vs ATL - I agree that it's much better to fly to a destination that has both O/D and connecting like MIA, however, I believe LA has enough O/D traffic to MIA on their own. Maybe LA would have downgraded from 77W to 787/767 to MIA for OD passengers, and DL can carry passengers to ATL for connecting to the rest of the US with a 330. Before everything changed, DL was also going to add more flights to MIA - they don't have to turn MIA into anything into a hub like AA, just enough to service cities that would require back trekking from ATL (i.e. MIA-MCO/FLL/TPA/MSY) DL has a lot of A220s that are perfectly suited for these kinds of routes.

LA still is the biggest airline for South America, their passengers will use them no matter who is connecting them in the US (In Atlanta) or in EU (AF/KL). The O/D market for JFK/MIA/MAD will remain strong and does not impact who LA teams up with.

Also - we should all remember that the JV between AA and LA was rejected, thus the value of the partnership was severely reduced before DL came into the picture.

Today - who knows what will happen. If LA survives and traffic goes back to pre-COVID in 2022, I still think LA made a good decision partnering with DL, and I'd still argue that for connecting passengers in the US, DL still offers more connections out of ATL than AA from MIA.


Maybe LATAM’s “best partner” is different in normal and high-demand environments (DL) than in low-demand times (AA)? A good business analysis will reveal this.

Also, while it’s true that ATL has more connecting destinations than MIA, that is not as valuable for South America as it is in other cases, because South American OD is heavily concentrated in NYC and Florida.


Then LA's flight to MIA/JFK will remain robust solely relying on the O/D traffic to those cities. For those who wish to go beyond that, DL to ATL/JFK from major cities in SA can do the trick. (IF everything goes back to normal, that is...)


Yes, that can work in normal times.

But when traffic is weak, you can’t afford to split up the few passengers across two US gateways or you’ll get two half-full intercontinental flights. In those times LATAM might prefer AA.
 
jordanh
Posts: 325
Joined: Fri Sep 08, 2017 11:56 pm

Re: LATAM moving towards bankruptcy

Mon May 25, 2020 4:40 am

tphuang wrote:
It's kind of ridiculous to say that losing dominant carrier partnership at the largest NA market and largest 2 European market is not a big loss.
Plenty of people buy connecting itineraries of code shared and interlined alliance partners in OW without JV. I used to always pick OW airlines when I was EXP regardless of whether or not they had JV with AA. That was a huge benefit of being in OW. And now all they got is DL.


You must not know much about LA. We are very well know in southern Florida, and will continue to serve our loyal passengers there. Delta may add some connecting passengers, but that is what you say is "gravy". Delta's huge hub at Atlanta brings flights to all of our hubs in South America, and we will take those passengers throughout the continent.

We have our own flights to Orlando, Los Angeles, and JFK. If we add our own flights to ATL, we will have access to many more connections than AA gave at MIA. You are welcome to stick with OW; we have moved up from there.


n9801f wrote:
But when traffic is weak, you can’t afford to split up the few passengers across two US gateways or you’ll get two half-full intercontinental flights. In those times LATAM might prefer AA.



I don't know why people who are from other places (probably from AA employees) keep telling us what we might prefer. We didn't enter an agreement with Delta blindfolded; we knew what we were doing. We continue to handle traffic to Miami with many flights - we certainly don't need AA to do that - and we will receive some feed from DL there. Delta will continue to fly from ATL (and from all the places served via Atlanta) to South America, and we will happily take over from there.

Had we not partnered with Delta, and had they not helped us financially and by taking some of out aircraft orders, we would be in far worse shape than we are now.
Last edited by jordanh on Mon May 25, 2020 4:51 am, edited 1 time in total.
 
Antarius
Posts: 2430
Joined: Thu Apr 13, 2017 1:27 pm

Re: LATAM moving towards bankruptcy

Mon May 25, 2020 4:48 am

jordanh wrote:
n9801f wrote:
But when traffic is weak, you can’t afford to split up the few passengers across two US gateways or you’ll get two half-full intercontinental flights. In those times LATAM might prefer AA.



I don't know why people who are from other places (probably from AA employees) keep telling us what we might prefer. We didn't enter an agreement with Delta blindfolded; we knew what we were doing. We continue to handle traffic to Miami with many flights - we certainly don't need AA to do that - and we will receive some feed from DL there. Delta will continue to fly from ATL (and from all the places served via Atlanta) to South America, and we will happily take over from there.

Had we not partnered with Delta, and had they not helped us financially and by taking some of out aircraft orders, we would be in far worse shape than we are now.


:roll: It must be AA employees only who disagree with the rosy picture being painted here. No one is disagreeing with the fact that the money helped LA. The point is, that money came with consequences. It wasn't like DL gave LA the money AND the best route network.

Maybe those who aren't too close to LA, DL or AA can actually see the whole picture. Ever considered that?
2020: SFO DFW IAH HOU CLT MEX BIS MIA GUA ORD DTW LGA BOS LHR DUB BFS BHD STN OAK PHL ISP JFK SJC DEN SJU LAS TXL GDL
 
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qf2220
Posts: 1972
Joined: Fri Aug 16, 2013 9:16 pm

Re: LATAM moving towards bankruptcy

Mon May 25, 2020 4:51 am

I wonder how much of this is Brazil and how much is TAM related. Given that TAM were rumoured to be close to bankruptcy when LAN merged with them the underlying Brazil market might be a significant drag?
 
onwFan
Posts: 452
Joined: Wed Feb 03, 2016 4:02 am

Re: LATAM moving towards bankruptcy

Mon May 25, 2020 5:15 am

qf2220 wrote:
I wonder how much of this is Brazil and how much is TAM related. Given that TAM were rumoured to be close to bankruptcy when LAN merged with them the underlying Brazil market might be a significant drag?

I think you definitely have a point there. There were quite a few articles on how the LA/JJ merger was probably not as brilliant an idea as it seemed. TAM has not had a very good history of profitability (the nature of Brazilian economy is also perhaps a factor there, but they never seemed to be able to make their whole GRU/GIG network work). Not to mention TAM has been all over the place, with little direction in terms of strategy. While LA has been relatively stable and been an AA/oneworld partner for 20+ years, TAM have never been able to make any partnership work for long. First it was DL/AF. Then they joined Star and partnered with UA/LH. Then again they joined oneworld (albeit it was the LA/JJ merger) and partnered with AA/IB. Now they are back in bed with DL. It was anyway only a matter of 5 years before things were be back on the table, but COVID definitely seems to have hastened the process!
 
jordanh
Posts: 325
Joined: Fri Sep 08, 2017 11:56 pm

Re: LATAM moving towards bankruptcy

Mon May 25, 2020 5:30 am

onwFan wrote:
i think you definitely have a point there. There were quite a few articles on how the LA/JJ merger was probably not as brilliant an idea as it seemed. TAM has not had a very good history of profitability (the nature of Brazilian economy is also perhaps a factor there, but they never seemed to be able to make their whole GRU/GIG network work). Not to mention TAM has been all over the place, with little direction in terms of strategy. While LA has been relatively stable and been an AA/oneworld partner for 20+ years, TAM have never been able to make any partnership work for long. First it was DL/AF. Then they joined Star and partnered with UA/LH. Then again they joined oneworld (albeit it was the LA/JJ merger) and partnered with AA/IB. Now they are back in bed with DL. It was anyway only a matter of 5 years before things were be back on the table, but COVID definitely seems to have hastened the process!



Let us say that Brasil is not the strongest part of the economy. TAM partnered with Air France starting in 1999 so it could codeshare to Europe, but it was never a partner of Delta. You may be thinking of TransBrasil; they did codeshare with Delta on flights to the USA.
 
flyinghippo
Posts: 768
Joined: Thu Aug 11, 2005 12:48 am

Re: LATAM moving towards bankruptcy

Mon May 25, 2020 5:38 am

Antarius wrote:
jordanh wrote:
n9801f wrote:
But when traffic is weak, you can’t afford to split up the few passengers across two US gateways or you’ll get two half-full intercontinental flights. In those times LATAM might prefer AA.



I don't know why people who are from other places (probably from AA employees) keep telling us what we might prefer. We didn't enter an agreement with Delta blindfolded; we knew what we were doing. We continue to handle traffic to Miami with many flights - we certainly don't need AA to do that - and we will receive some feed from DL there. Delta will continue to fly from ATL (and from all the places served via Atlanta) to South America, and we will happily take over from there.

Had we not partnered with Delta, and had they not helped us financially and by taking some of out aircraft orders, we would be in far worse shape than we are now.


:roll: It must be AA employees only who disagree with the rosy picture being painted here. No one is disagreeing with the fact that the money helped LA. The point is, that money came with consequences. It wasn't like DL gave LA the money AND the best route network.

Maybe those who aren't too close to LA, DL or AA can actually see the whole picture. Ever considered that?


I think the route network is where DL has something better to offer than AA, at least between ATL and MIA. LATAM covers MIA/JFK/LAX for O/D traffic, while DL takes connecting passengers to their destinations via ATL - and again, I (and others here) feel DL can offer better connections than AA can at MIA (This is all under normal circumstances)

If LATAM stayed with AA, they'd be on the hook for the A350s, as well as a couple of billion dollars, and with a failed JV attempt - I think we can all agree that LATAM would've been in a worse situation now with AA.
 
onwFan
Posts: 452
Joined: Wed Feb 03, 2016 4:02 am

Re: LATAM moving towards bankruptcy

Mon May 25, 2020 5:46 am

jordanh wrote:
tphuang wrote:
It's kind of ridiculous to say that losing dominant carrier partnership at the largest NA market and largest 2 European market is not a big loss.
Plenty of people buy connecting itineraries of code shared and interlined alliance partners in OW without JV. I used to always pick OW airlines when I was EXP regardless of whether or not they had JV with AA. That was a huge benefit of being in OW. And now all they got is DL.


You must not know much about LA. We are very well know in southern Florida, and will continue to serve our loyal passengers there. Delta may add some connecting passengers, but that is what you say is "gravy". Delta's huge hub at Atlanta brings flights to all of our hubs in South America, and we will take those passengers throughout the continent.

We have our own flights to Orlando, Los Angeles, and JFK. If we add our own flights to ATL, we will have access to many more connections than AA gave at MIA. You are welcome to stick with OW; we have moved up from there.


n9801f wrote:
But when traffic is weak, you can’t afford to split up the few passengers across two US gateways or you’ll get two half-full intercontinental flights. In those times LATAM might prefer AA.



I don't know why people who are from other places (probably from AA employees) keep telling us what we might prefer. We didn't enter an agreement with Delta blindfolded; we knew what we were doing. We continue to handle traffic to Miami with many flights - we certainly don't need AA to do that - and we will receive some feed from DL there. Delta will continue to fly from ATL (and from all the places served via Atlanta) to South America, and we will happily take over from there.

Had we not partnered with Delta, and had they not helped us financially and by taking some of out aircraft orders, we would be in far worse shape than we are now.


Things are not just as straightforward as you make them appear. LA relied a lot on AA and IB’s network strength to provide numerous nonstop options to its customers. As part of oneworld, they were able to sell non-stop flights from almost every country/major city in South America to MIA and MAD; which have all disappeared. For example, by relying on their oneworld partners AA and IB, LA was able to sell competitive non-stop options on several big routes that it didn’t fly, like EZE-MAD, BOG-MAD, UIO/GYE-MAD, GIG-MIA/MAD, BOG/CLO/MDE/CTG/BAQ-MIA, UIO/GYE-MAD, BOG-MAD, etc. In addition, as far as LA’s routes to MAD and MIA are concerned, not only do IB and AA fly those routes, they offer higher frequencies. This crisis is only going to further reduce the number of options LA will have to the US and Europe. To say that by leaving most of its current fliers to either backtrack and connect to one of their hubs or ATL was a brilliant idea just doesn’t make much sense.
 
usflyer msp
Posts: 3811
Joined: Tue May 23, 2000 11:50 am

Re: LATAM moving towards bankruptcy

Mon May 25, 2020 5:56 am

qf2220 wrote:
I wonder how much of this is Brazil and how much is TAM related. Given that TAM were rumoured to be close to bankruptcy when LAN merged with them the underlying Brazil market might be a significant drag?


The former TAM operation (Brazil/Paraguay) was the most profitable part of the company the last two years. Its profits pretty much subsidized the rest of the company . LATAM Argentina is the big consistent money loser followed by LATAM Cargo and LATAM Colombia. Looking at their results, it may actually help LATAM that air traffic to Colombia and Argentina is essentially shut down until September.

2019 results
Image

2018 results
Image
 
dcajet
Posts: 4693
Joined: Sun Aug 01, 2004 9:31 am

Re: LATAM moving towards bankruptcy

Mon May 25, 2020 6:01 am

This thread has been hijacked by AA/OW & DL fanboys,,, Jeez... Can we focus on LATAM instead of discussing ad nauseaum if AA or DL was/is better for LA?
Keep calm and wash your hands.
 
Corpsnerd09
Posts: 580
Joined: Tue Mar 30, 2004 2:05 pm

Re: LATAM moving towards bankruptcy

Mon May 25, 2020 6:09 am

dcajet wrote:
This thread has been hijacked by AA/OW & DL fanboys,,, Jeez... Can we focus on LATAM instead of discussing ad nauseaum if AA or DL was/is better for LA?


There's not one thread in this forum that doesn't end in a DL vs AA and sometimes UA but always DL vs trend.
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