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.

Posted on August 14th, 2010 by lucky
Filed under: LAN, Other Airlines | 12 Comments »

  1. August 14th, 2010 at 9:57 pm

    colpuck said,

    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. August 14th, 2010 at 10:26 pm

    Oscar said,

    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. August 14th, 2010 at 10:59 pm

    AJ said,

    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. August 15th, 2010 at 12:07 am

    Mateusz Pawlowski said,

    You know, LATAM in polish mean “I’m flying”, great name ;)

  5. August 15th, 2010 at 1:30 pm

    Hendrik said,

    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.

  6. August 15th, 2010 at 6:47 pm

    Possible demise of the LAN SYD-AKL status run said,

    [...] [...]

  7. August 16th, 2010 at 11:12 am

    Mike said,

    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?

  8. August 16th, 2010 at 1:19 pm

    eponymous coward said,

    I am guessing the combined entity stays in OW, because a) MIA is a bigger market for a Latin American carrier than IAH, and b) MIA is a much better connecting hub for US destinations for a South American carrier than IAH

  9. August 16th, 2010 at 6:48 pm

    edwards183 said,

    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

  10. August 20th, 2010 at 8:02 pm

    richard said,

    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).

  11. October 1st, 2010 at 8:53 am

    You can now redeem your American miles on British Airways between the US and UK (sort of) - One Mile at a Time said,

    [...] LAN is a great airline for South America, though let’s see what happens to them with their upcoming merger with TAM. This could be really good news for OneWorld or really good news for the Star Alliance, depending [...]

  12. November 10th, 2010 at 1:52 pm

    Avianca and COPA to join the Star Alliance - One Mile at a Time said,

    [...] the same time, this has other, more significant implications. With LAN and TAM merging, the question all along has been whether they will join the Star Alliance or OneWorld. This will [...]

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