In mergers, LAN Airlines and TAM have finally complete the merger of the two airlines into the LATAM group.
The group is estimated to control 40% of the Latin America Passenger market (and probably a fair lump of cargo at the same time), employing more than 51,000 workers open up routes to 150 destinations in 22 countries.
Meanwhile the cargo operation will connect 169 destinations in 27 countries.
The airlines will operate as separate brands, with LAN in Santiago de Chile and TAM in Sao Paul, and will probably merge back-office, maintenance and all the other things passengers don’t see in the foreground when rushing for a plane.
This leave the question of “which alliance” LAN and TAM will plump for. LAN is a member of Oneworld, whilst TAM is a member is a member of Star Alliance.
And it’s mostly decided by the Chilean regulators who authorities who have insisted that LATAM chooses one alliance over another
Earlier this week, Copa Airlines, and Avanica-TACA joined Star Alliance. During the ceremonies, TAM was noticeable by its absence. The official reason for TAM not turning up is that they were finalising the merger.
If LATAM decides to plump for Star Alliance, there will be no exit fee, however LATAM (who as TAM joined Star in May 2010), will have to face an exit fee of US$25 Million.
Whilst it is entirely possible for Star to sew up South America in one fell swoop, this could really make the competition authorities take a very hard and invasive look into what could be described as a stitch-up.
For those of you who have TAM redemptions planned, you’ve got time as it will take some time for TAM to unpick itself from Star Alliance (and in any case, I’d suspect a situation like the BMI/BA situation).
As LATAM is taking its time, relax for now – but be prepared to switch alliance if you hold those shiny cards.
I thought it was already decided that Latam and Avianca/Taca can’t be in the same alliance, so there’s not much of a question about which alliance Latam will end up in.
That’s correct, I think it was the Chilean authorities who said that LATAM and Avianca can’t be in the same alliance. This suggests that OW is likely to be the chosen alliance.