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Delta and LATAM's joint venture is tentatively approved by DOT

June 24, 2022
3 min read
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Delta and LATAM's joint venture is tentatively approved by DOT
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A proposed joint venture between Delta Air Lines and LATAM Airlines has been tentatively cleared by the Department of Transportation, paving the way for the deal to proceed.

Delta and LATAM announced the planned joint venture in 2019, and Delta recommitted to the deal in 2020 even as LATAM entered bankruptcy due to the COVID-19 pandemic.

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Although Chilean authorities cleared the deal last fall, the airlines continued to wait for the ruling from U.S. regulators. Airlines must typically receive approval from regulators before enjoying the anti-trust immunity offered by a joint venture. Delta has similar ventures in place with numerous airline partners, including Air France-KLM and Virgin Atlantic.

Still, in the ruling published on Thursday, the DOT attached conditions to its approval, arguing that without them, it found that granting the antitrust immunity could be anti-competitive in the U.S.-South America market.

"The Department proposes the following critical remedies and conditions to address these issues: maintenance of current third-party interline agreements, the removal of exclusivity provisions...a 10-year expiration and re-assessment requirement, and the removal of a capacity constraint clause located in the Joint Venture Agreement, which artificially limits growth during the initial stages of the proposed relationship," the DOT wrote in the filing.

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"With these conditions, we have tentatively determined that the alliance is likely to generate public benefits while the U.S.-South America market would remain sufficiently open to existing and new competition."

The ruling is now subjected to a 14-day comment period.

In September 2019, Delta made waves with the shocking announcement it would take a 20% stake in the Latin American carrier, valued at just under $2 billion, and form a joint venture, upending historical alliances in the region. LATAM, which was previously a member of the Oneworld alliance and a partner of American Airlines, left the alliance as part of the announcement.

The two airlines currently offer reciprocal frequent flyer benefits and codeshare on some routes, an arrangement that was expanded in November.

In a statement, Delta celebrated the decision.

"Delta Air Lines and LATAM Airlines Group applaud the U.S. Department of Transportation’s tentative decision to approve their Joint Venture," a spokesperson said.

"Once the DOT finalizes its decision, both airlines will work to quickly deliver the consumer benefits approval unlocks, including expanded capacity, increased routing options between the U.S./Canada and South America, superior frequent flyer benefits and shared airport facilities and amenities."

Featured image by (Photo by David Slotnick/The Points Guy)
Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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  • Get $200 back in statement credits each year on prepaid Fine Hotels + Resorts® or The Hotel Collection bookings, which requires a minimum two-night stay, through American Express Travel when you pay with your Platinum Card®.
  • $240 Digital Entertainment Credit: Get up to $20 back each month on eligible purchases made with your Platinum Card® on one or more of the following: Audible, Disney+, The Disney Bundle, ESPN+, Hulu, Peacock, SiriusXM, and The New York Times. Enrollment required.
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  • American Express has expanded The Centurion® Network to include 40+ Centurion Lounge and Studio locations worldwide. There are even more places your Platinum Card® can get you complimentary entry and exclusive perks.
  • $200 Airline Fee Credit: Get up to $200 in statement credits per calendar year in baggage fees and more at one select qualifying airline.
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  • Get up to $300 back per calendar year on the Equinox+ digital fitness app, or eligible Equinox club memberships when you pay with your Platinum Card. Enrollment required. Learn more.
  • Breeze through security with CLEAR® lanes available at 100+ airports, stadiums, and entertainment venues and get up to $189 back per calendar year on your membership when you use your Card. Learn more.
  • $695 annual fee.
  • Terms Apply.
  • See Rates & Fees