00:39 "...now that Lan is likely to exit its alliance"!!?
#16
Join Date: Jul 2005
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A. It's not drivel it's speculation. And both LAN and Star execs have in the past talked about possibilities despite the Chilean ruling.
B. As the *A accession for AV/TA is happening, I stand corrected on the accuracy of the immediate part of my speculation: that AV/TA would not join Star. Now, let's see who is in what alliance 1 to 3 years from now.
C. American is massively weakened. The amount of cash on hand during a US bankruptcy reorganization doesn't mean anything other than they mostly were able to do their own debtor-in-possession financing. Their US network is far weaker than UA or DL, and weakening further with all the ERJs. Until very recently the only AA between Denver and supposed hub LAX was an ERJ. Now it's CR7. BFD. Their unions hate them and are encouraging US' takeover effort directly against AA management's plans.
D. There are some weird cross-alliance and outside-alliance arrangements still extant in the AV/TA and other involved airlines scene. I would not count on status quo.
E. I will in the meantime enjoy using my brand-new LifeMiles account as my Star Alliance account, for when I have to travel on UA or other *A partners.
B. As the *A accession for AV/TA is happening, I stand corrected on the accuracy of the immediate part of my speculation: that AV/TA would not join Star. Now, let's see who is in what alliance 1 to 3 years from now.
C. American is massively weakened. The amount of cash on hand during a US bankruptcy reorganization doesn't mean anything other than they mostly were able to do their own debtor-in-possession financing. Their US network is far weaker than UA or DL, and weakening further with all the ERJs. Until very recently the only AA between Denver and supposed hub LAX was an ERJ. Now it's CR7. BFD. Their unions hate them and are encouraging US' takeover effort directly against AA management's plans.
D. There are some weird cross-alliance and outside-alliance arrangements still extant in the AV/TA and other involved airlines scene. I would not count on status quo.
E. I will in the meantime enjoy using my brand-new LifeMiles account as my Star Alliance account, for when I have to travel on UA or other *A partners.
#18
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You seem to cling on nothing more than a distant dream, and substantiate it with weak facts. Let me remind you few points:
- getting in two airlines only to dump them within 3 years is something that is gonna cost a lot of money even for a concern like Lufthansa that normally enjoys the full financial support of their country. Same could be said of LAN;
- EU antitrust,no matter how biased it is towards Franco-German interests will have hard times justifying a near monopoly between Europe and Latin America, should LAN "chooses" to switch to *;
- as repeatedly said in the past, the current alliance arrangement has made LAN the dominant force in its part of the world and they are on record saying they valued it a lot. Why they have to switch and incur significant expenses in light of above points does not made any sense.
the Chilean Antitrust decision was what sealed the alliance choice for LAN. Note that at this point neither Avianca nor COPA were near to *, rather to Skyteam, and LH with a clever move scooped them immediately. I suspect the real reason of what may be seen as murky situation could be regional politics: Brazil is a rising economic power and losing their major airline to a regional minnow like Chile is perceived as a snub, hence LAN has one thousand and one reason to keep quiet and let the situation slowly calming.
- getting in two airlines only to dump them within 3 years is something that is gonna cost a lot of money even for a concern like Lufthansa that normally enjoys the full financial support of their country. Same could be said of LAN;
- EU antitrust,no matter how biased it is towards Franco-German interests will have hard times justifying a near monopoly between Europe and Latin America, should LAN "chooses" to switch to *;
- as repeatedly said in the past, the current alliance arrangement has made LAN the dominant force in its part of the world and they are on record saying they valued it a lot. Why they have to switch and incur significant expenses in light of above points does not made any sense.
the Chilean Antitrust decision was what sealed the alliance choice for LAN. Note that at this point neither Avianca nor COPA were near to *, rather to Skyteam, and LH with a clever move scooped them immediately. I suspect the real reason of what may be seen as murky situation could be regional politics: Brazil is a rising economic power and losing their major airline to a regional minnow like Chile is perceived as a snub, hence LAN has one thousand and one reason to keep quiet and let the situation slowly calming.
#19
Join Date: Dec 2004
Posts: 7,897
Their US network is far weaker than UA or DL, and weakening further with all the ERJs. Until very recently the only AA between Denver and supposed hub LAX was an ERJ. Now it's CR7. BFD. Their unions hate them and are encouraging US' takeover effort directly against AA management's plans.
#20
Join Date: Jun 2012
Posts: 71
Y would LATAM Even care about DEN they don't even fly into DEN so y do they need to align with UA. LAN is stronger aligned with flying to Oneworld hubs in the States like JFK, MIA, LAX all AA hubs offering connections for them. The only UA Hub they fly into is SFO really cuz AA can do the connection at LAX and the only other us destination they fly to is MCO. And as far as US Traffic goes for TAM they will benefit more from partnering with Oneworld too as they only fly into 3 destinations in the states which are MIA, JFK Both oneworld hubs and MCO. So its absurd that these airlines would benefit on partnering with UA over AA as they fly primarily into AA HUBS.
#21
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As long as LAN (TAM) can get you one stop to pretty much anywhere in the USA, that is all they need. Between MIA/JFK/DFW/LAX/SFO and probably another city or two in the next few years, there you have it. They are also partners with AS on the West Coast, so the LAX and SFO connections provide a lot of regional access in addition to the AA connections.
#22
Join Date: Jul 2005
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Y would LATAM Even care about DEN they don't even fly into DEN so y do they need to align with UA. LAN is stronger aligned with flying to Oneworld hubs in the States like JFK, MIA, LAX all AA hubs offering connections for them. The only UA Hub they fly into is SFO really cuz AA can do the connection at LAX and the only other us destination they fly to is MCO. And as far as US Traffic goes for TAM they will benefit more from partnering with Oneworld too as they only fly into 3 destinations in the states which are MIA, JFK Both oneworld hubs and MCO. So its absurd that these airlines would benefit on partnering with UA over AA as they fly primarily into AA HUBS.
Note that airlines often change gateways when they change alliances. Continental downgraded service to Amsterdam when they left Delta-Northwest-KLM-AirFrance's SkyTeam with the old NW AMS hub, switching to Star. Continental got the heck out of ST and into Star the moment that the "Golden Share" contract stipulation with NW was voided by NW announcing its merger with DL.
So LAN flies to JFK. BFD. If Star looks better to LAN, LAN will fly that bird to UA's (ex-CO) primary European gateway of EWR a few miles away. LAN will easily if it wants add back its tag flight on that to Air Canada's primary Eastern Canada and European gateway, Toronto International (YYZ), which is probably the best major alliance hub for Europe in eastern or central North America in terms of facilities and connection convenience. LAN flies to Dallas; it can easily switch to United's Houston Intercontinental if Star makes sense. So we've dealt with NYC (JFK/EWR swap). LAX you mention, is a UA hub. With more TPAC connections on UA by far than on AA, and a larger number of *A Asian partners than ow Asian partners.
DEN isn't the point. Other than it's where I live in the USA, anymore than MVD is the point for where I live in South America.
The point is that the North American *A route network is far stronger than the North American ow route network. And the North American ow route network is based on very shaky, in turmoil, could be broken up coming out of bankruptcy, American Airlines. Even if US buys AA and US/AA stays in ow, the USA antitrust authorities will almost certainly make US/AA divest a lot of hubs and routes, or the bankruptcy trustee will do so to add value. Nobody knows what LAN partner and only-north-american-player AA will look like, whereas it is very clear what Air Canada/United look like. It's likely that at least some of AA will end up with Alaska Airlines, or with JetBlue, or Frontier, or Virgin America, in order to get approval for the bigger AA/US deal. Alternately, that AA/US will not happen and some JetBlue/Alaska/AA dealio will come out of the blue.
Not the thing upon which LATAM Airlines, who are very good airline managers and better money makers than any of their North American counterparts, want to count upon.
Add the UA/AC/Lufthansa (and minor airlines) Joint Venture to Europe, and the UA/ANA (NH) joint venture to Asia, and *A looks wicked more beneficial to LAN than does the increasingly marginal ow.
Stay in Oneworld: North American hubs of partner airlines in LAX, ORD, MIA, JFK, DFW (to which they only codeshare with AA anyway.) No partner hub in SFO.
Join Star: North American hubs of partner airlines in LAX (UA), ORD (UA), NYC (EWR instead of JFK, UA), IAH (UA), SFO (UA), YYZ (AC, and LAN has rights there, I've flown LAN to YYZ), YUL, YEG, YYC, YVR (all AC), with far heavier and wider Europe and Asian connectivity via a great number of partners. No hub but extensive ex-CO coverage of Mexico, complimenting or replacing the cross-alliance existing partnership with AM.
Also Central American hubs in BOG (Copa Colombia and Avianca part of AviancaTaca), PTY (Copa), SJO (LACSA part of AviancaTaca), SAL(Taca part of AviancaTaca). Plus a partner in Peru where LATAM has to lessen its own flights to as a merger condition, Taca Peru part of AviancaTaca.
Seriously, you can't argue that oneworld is better for LAN than would be Star. Certainly you can argue that LAN is better for American Airlines than not having LAN would be for AA. But I doubt that LATAM management in Chile and Brasil particularly care about what is good for American Airlines. Certainly you can argue that under the plain-Spanish wording of the Chilean court ruling, LAN cannot possibly join Star now that AviancaTaca did in fact join Star. But court rulings get appealed, politicians get bought off (at least in the USA they do, perhaps South America is less corrupt than 21st Century Corporatocracy USA jejeje), and airlines change alliances.
The very likely outcome that US will leave Star when it merges with AA and joins oneworld is probably more than enough argument to reopen the alliance issue with the antitrust authorities, because "Star has lost an airline in the Americas and oneworld has become stronger, thus we must join Star to restore the balance."
Or somebody throws a lot of money at AviancaTaca to get them to switch to SkyTeam. Or the other 5 countries involved in LATAM Airlines get tired of Chile throwing its weight around making all the rules, because LAN Argentina, LAN Ecuador, LAN Peru, and LAN Colombia, and TAM Brasil all might say they like the idea of Star and can make more money with it than being in oneworld. BTW, LAN Colombia is not in any alliance now. So that's a part of LAN that is already unaligned with oneworld.
Post merger, the LAN site's page on LATAM Airlines Holdings has this text:
Originally Posted by LATAM Airlines
Which alliance will LAN and TAM choose after the merge?
We’re carefully evaluating this issue and we will decide make a decision within an established deadline, taking into account the alternative that offers the best benefits to our clients. For the moment, LAN continues with oneworld and TAM in Star Alliance. We will inform you of any coming up changes.
We’re carefully evaluating this issue and we will decide make a decision within an established deadline, taking into account the alternative that offers the best benefits to our clients. For the moment, LAN continues with oneworld and TAM in Star Alliance. We will inform you of any coming up changes.
Oneworld fans, do not make assumptions. Much can change.
#23
Join Date: Jul 2005
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Posts: 2,673
- as repeatedly said in the past, the current alliance arrangement has made LAN the dominant force in its part of the world and they are on record saying they valued it a lot. Why they have to switch and incur significant expenses in light of above points does not made any sense.
the Chilean Antitrust decision was what sealed the alliance choice for LAN. Note that at this point neither Avianca nor COPA were near to *, rather to Skyteam, and LH with a clever move scooped them immediately. I suspect the real reason of what may be seen as murky situation could be regional politics: Brazil is a rising economic power and losing their major airline to a regional minnow like Chile is perceived as a snub, hence LAN has one thousand and one reason to keep quiet and let the situation slowly calming.
As long as LAN (TAM) can get you one stop to pretty much anywhere in the USA, that is all they need. Between MIA/JFK/DFW/LAX/SFO and probably another city or two in the next few years, there you have it. They are also partners with AS on the West Coast, so the LAX and SFO connections provide a lot of regional access in addition to the AA connections.
I don't know how all this will play out. But people on this board who are convinced they do know how it will play out, as status quo oneworld, are likely more certain than real-world facts and eventualities imply.
It would be very easy for LATAM to come out and say "As a merger condition, TAM will be leaving Star Alliance and joining LAN in oneworld." LATAM has never said that. Continental switched from SkyTeam to Star Alliance in three days. (obviously with a year's prep, but only a year's prep, and only 3 days to execute the switch.) LATAM could announce the same thing. They have not. There must be reasons why they have not. My speculation is about those reasons.
#24
Join Date: Jul 2005
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Datapoint: http://atwonline.com/airline-finance...ion-nears-0622
1. Star Alliance CEO still hopeful TAM remains: "Star Alliance CEO Mark Schwab told ATW in Bogota. “After that, then they’ll make a decision on how to continue [regarding alliance membership]. For Star Alliance, the situation still remains open [regarding] how TAM will decide," he said."
2. TAM has to pay $25 million USD to leave Star. LAN has to pay zero to leave oneworld. $25 million pays a lot of lawyers (or Chilean judges) to change or ignore or modify that ruling. "TAM will have to pay a $25 million fee to leave the alliance. Oneworld, on the other hand, does not have an exit fee."
1. Star Alliance CEO still hopeful TAM remains: "Star Alliance CEO Mark Schwab told ATW in Bogota. “After that, then they’ll make a decision on how to continue [regarding alliance membership]. For Star Alliance, the situation still remains open [regarding] how TAM will decide," he said."
2. TAM has to pay $25 million USD to leave Star. LAN has to pay zero to leave oneworld. $25 million pays a lot of lawyers (or Chilean judges) to change or ignore or modify that ruling. "TAM will have to pay a $25 million fee to leave the alliance. Oneworld, on the other hand, does not have an exit fee."
#25
Join Date: Mar 2007
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AviancaTaca to Enter Star Alliance Thursday
And from nasdaq.com:
"AviancaTaca's decision also means that Latam, the Latin American airline formed by the takeover of Brazil'sTAM SA (TAM, TAMM4.BR) by Chile'sLan Airlines SA (LFL, LAN.SM), won't be able to be part of the Star Alliance."
http://www.nasdaq.com/article/avianc...20120620-00974
"AviancaTaca's decision also means that Latam, the Latin American airline formed by the takeover of Brazil'sTAM SA (TAM, TAMM4.BR) by Chile'sLan Airlines SA (LFL, LAN.SM), won't be able to be part of the Star Alliance."
http://www.nasdaq.com/article/avianc...20120620-00974
#26
Join Date: Mar 2007
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Likely Scenarios
Also a good analysis on likely scenarios from Centre for Aviation:
"TAM legally cannot remain in Star and it is not feasible for LAN to leave oneworld for Star."
http://www.centreforaviation.com/ana...rt-lived-76504
"TAM legally cannot remain in Star and it is not feasible for LAN to leave oneworld for Star."
http://www.centreforaviation.com/ana...rt-lived-76504
#27
Join Date: Oct 2009
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Folha de S. Paolo reports in both english and portuguese that TAM's CEO admits that TAM will leave Star. It will then have to decide whether to join OW or remain independent. Perhaps independence will be preferable (I hope not) because it would be able to keep and enter into valuable codeshares? I still think OW is the most likely outcome but I had not really considered independence before reading this article.
#28
Join Date: May 2010
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Another thing we need to remember in this is that Delta has a stake in GOL. So that means GOL would be likely to join SkyTeam because of the Delta influence because it wouldn't make sense to have GOL and TAM in the same alliance. However if I was OW I'd be kissing the rear ends of LAN and TAM anyway.
#29
Join Date: Jun 2012
Posts: 71
I am a realist looking again at the total TAM route network right now they will benefit more from either being in Oneworld or unaligned as far as alliances goes. They service the AA Hubs in the US like MIA, LAX, JFK. In Europe they service LHR and MAD Both Oneworld Hubs and CDG, MXP which are sky team hubs and in Europe they only service FRA which is the only Star Alliance hub in Europe they service. FRA connections can be easily taken over by Air Berlin which granted doesn't have as big of a presence as LH at FRA but still have a presence there. As far as Canada goes Lan can easily sign a codesharing agreement with WestJet who is currently unaligned and have a great route connections out of YYZ and will only expand more next year with the launch of WestJet Regional starting (no official name given yet to WestJet regional partner). As far as Tams Hubs goes whatever is loss for Star Alliance by Tam as far as domestic markets concerned can be made up by Avianca Brazil which will join Star Alliance if Tam decides to exit Star Alliance which seems very likely. Avianca Brazil granted doesn't have as many routes right now as Tam but they are quickly expanding and with entry into Star Alliance and acting as a Brazil Feeder airline for the Alliance they can expand even more rapidly then they already are.
#30
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True that. But nothing that cannot be replaced easily by a US Airways-less-Star. And again, that ignores the entire darn country of Canada, which is not insignificant. Yes, AA runs some jungle jets into a few Canadian airports, and AS runs some Horizon Q400s turboprops. Air Canada runs real airplanes with lots of pax and cargo capacity. Air Canada also opens up a "partner in North America that isn't the paranoid security-invasive USA."
Although I have absolutely no evidence of same, I believe that *A is a more expensive and more restrictive alliance for its members. The folks running LAN are not stupid, and they are not short-sighted. They (along with policy in Chile) have revolutionized (mostly-western) South America air travel, where air travel was an expensive luxury, and most people took the bus. They have also consistently made money for quite some time.
As a "big boy" of OW, they are probably better positioned to formulate beneficial alliance policy (with their own self interest in mind), which might include revenue sharing on mixed-airline alliance tickets, and the like. In *A, the airline group will always be no higher than second, third, or fourth fiddle to LH, which will likely always occupy the majority of the strings section.