Delta Air Lines and Latam Airlines Group this week filed with the U.S. Department of Transportation an application for antitrust immunity for their planned joint venture. If granted, the move would allow the carriers to jointly plan service and set fares on flights between some South American countries and the U.S. and Canada. The carriers also noted plans for Delta to boost its domestic and international presence in Miami.
Delta in September 2019 took a 20 percent stake in Latam, and in May announced plans for its joint venture.
"Among other benefits, the JV will offer Delta/LATAM customers access to world-class airline products, superior frequent flyer benefits, and shared airport facilities and amenities, for a more seamless travel experience," according to the airlines' filing with DOT. "The JV will also create a more effective Latin network competitor to American Airlines, United Airlines, and their Latin American carrier partners, generating procompetitive benefits in the form of new and enhanced service, more convenient connections, and superior product offerings that will flow directly to consumers."
Latam last year had sought a joint venture with American Airlines, but that was blocked in May 2019 by Chile's Supreme Court. The carrier subsequently separated from the AA deal and formed a partnership with Delta.
Delta and Latam in the DOT filing noted that a Latam-AA joint venture would have produced overlapping nonstop service on six routes, but such overlap would occur on one Delta-Latam route: New York-São Paulo.
The carriers in the application also said Delta would "transform" Miami International Airport "into a new U.S.-South America gateway, in direct competition with American" and "a new domestic and international hub."
In the filing, the carriers said that "as demand recovers from the Covid-19 impact," Delta would add more than 20 domestic flights from Miami, including to "top corporate travel destinations," with their identities redacted.
Delta, which earlier this year announced increased service to Miami, said that with the JV fully implemented, it would offer nonstop service between Miami and 10 U.S. cities.
"This planned network expansion at Miami will enhance competition, leading to additional direct nonstop competition on five domestic routes and nine international routes," according to the filing. "The expansion is also likely to trigger strong responses from competitors, which will further benefit air travelers on both domestic and international routes.
At the core of this growth at MIA will be an enhanced joint corporate sales contracting capability. Delta and LATAM together provide strong coverage of markets that matter most to corporate customers in Miami."
The carriers would need approval not only from DOT but also relevant South American authorities to fully implement the joint venture.
Latam in May filed for Chapter 11 protection in U.S. bankruptcy court in order to maintain operations as it works to pay off creditors, which the carriers at the time said does not affect their joint-venture plans.