LAN and TAM to merge — the sky is falling for either Star Alliance or OneWorld

It’s no longer speculation. LAN and TAM have announced the intention to merge into a new company called LATAM (which, on paper, looks like as much of a people pleaser as United’s new livery). They will continue to operate as distinct airlines, though I’m sure this means only one thing — either LAN is moving to the Star Alliance, or TAM is moving to OneWorld. While there’s not a huge amount to gain here for either alliance (as both airlines have decent coverage in South America), there’s a lot to lose here. Whichever alliance they ditch will almost completely lose South America coverage, especially on the flights within the continent.

Musings of the Global Traveller has a pretty thorough analysis on what’s up for grabs here. My thoughts? I have to imagine they’ll go with the Star Alliance, as it has much more reach and much more limited coverage in South America outside the two airlines, meaning they have more to gain. On the other hand, OneWorld is already stronger within South America, and maybe LAN doesn’t want to give up the connecting traffic they get from American. But I still have to imagine they’ll go with the Star Alliance at the end of the day.

It’ll be interesting to watch this, though I can’t say I’m terribly excited about the merger. I was happy using American miles for LAN and United miles for TAM.

Comments

  1. I think you are wrong. OneWorld is already on life support. With the end of Mexicana a given, if OW world loses LAM it will basically be out of Latin and South America. Skyteam which larger than OW and has AeroMexico, is in a better position to weather this change.

    Just like JAL this is another battle OW can ill afford to lose. That being said, I assume AA and BA will cut LAN a much better deal than *A will.

  2. As you can see its for both airline very bad. Star Alliance dont have any members for latin america except for TAM still UA, CO, etc.. Serve many latin americans cities. For OW is the same Mexicana is dying, please lucky blog about this, and if they dont have LAN they will dont have a major power as skyteam has but still American offers a lot of destinations

  3. Don’t know what will happened, but it’s important to keep in mind TAM just joined Star Alliance and the two brands aren’t yet as closely intertwined as LAN and oneworld. That said, the website now says that “frequent flyer program members [will] be able to earn and redeem miles on more flights, and be able to earn miles through more partners than ever before”, which strongly suggests that the combined entity will be a part of Star Alliance. And you’re right, lucky, losing LAN would severely devalue oneworld benefits.

  4. I’m not sure if it is that obvious but LATAM is also a nice twist on LATin AMerica – awesome name which describes the focus as well.
    Naturally I hope *A will come out as the winner of this but as already written AA/BA will fight to prevent this.

  5. I hope its the otther way around. The one place I love to go to is easter island, served primarily by LAN one/world.

    That being said, Star Offers much more revenue posibilites, AA is practically a south american carrrier. Rencife anyone?

  6. I think that AA and LAN have ATI with the Chile and Peru divisions, LAN is pretty entwined in this and there is probably a poision pill about dropping out. After looking through the information that is out there about this merger, it looks like LAN’s management is going to be running the new joint carrier. I don’t see anything big changes for a while

  7. I sincerely hope LATAM will be in OneWorld. This is the only effective airline alliance where service levels between carriers is quite similar. Tam is probably one of the better Star Alliance carriers in terms of service, however, as they are very new to Star, whereas LAN has been a OneWorld member for the last 10 years, it would not be so catastrophic for TAM to switch to LAN`s alliance. If LAN does leave OneWorld, companies such as BA will have to find new partners for flights to SCL and Qantas will no longer be able to code-share on the SCL-AKL-SYD route …Come on OneWorld ! Don’t abandon LATAM (i.e. Latin America).

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