Delta buying 20% stake in LATAM

Old Sep 28, 19, 12:57 pm
  #91  
 
Join Date: May 2009
Location: Seattle, WA
Programs: DL Diamond 1MM, UX Suma Gold, Marriott Bonvoy™️ Gold, Hilton Gold, Avis Preferred, Hertz PC
Posts: 3,538
Originally Posted by MSPeconomist View Post
They could just be posturing until they see whether SkyTeam will admit them and on what terms.
This is exactly my thought. I suspect Ed’s public comments are a shrewd move to try to reshape SkyTeam into Delta’s vision for what they want it to become.

There are persistent rumors Virgin Atlantic has been looking at joining, but they haven’t yet. I suspect behind the scenes drama that could easily get worked out in favor of joining if the terms are favorable.

There are real and measurable benefits to LATAM from joining up with the SkyTeam carriers - coverage in Argentina, plus direct access to Europe via Air Europa and AFKL. Like China Southern, I think we’ll see a few years of independence, but if SkyTeam still exists in five years, I think LATAM will be in it.
moondog likes this.
BenA is offline  
Old Sep 28, 19, 1:16 pm
  #92  
Suspended
 
Join Date: Sep 2005
Location: SEA
Programs: UA Silver, BA Gold, DL Gold
Posts: 9,779
Originally Posted by BenA View Post
This is exactly my thought. I suspect Ed’s public comments are a shrewd move to try to reshape SkyTeam into Delta’s vision for what they want it to become.

There are persistent rumors Virgin Atlantic has been looking at joining, but they haven’t yet. I suspect behind the scenes drama that could easily get worked out in favor of joining if the terms are favorable.

There are real and measurable benefits to LATAM from joining up with the SkyTeam carriers - coverage in Argentina, plus direct access to Europe via Air Europa and AFKL. Like China Southern, I think we’ll see a few years of independence, but if SkyTeam still exists in five years, I think LATAM will be in it.
1) There have been rumors of VS joining SkyTeam for half a decade.

2) I would think AFKL would be amenable to some sort of tie-up outside of SkyTeam, just as they do now with VS.

Given DL’s recent comments minimizing the import of alliances, and the continued independence of VS (and VA for that matter), I find it odd that folks are doubting LATAM/DL when they say they will be independent.
pbarnette is offline  
Old Sep 28, 19, 1:47 pm
  #93  
FlyerTalk Evangelist
 
Join Date: Dec 2000
Location: Shanghai
Posts: 31,193
Originally Posted by pbarnette View Post

Given DL’s recent comments minimizing the import of alliances, and the continued independence of VS (and VA for that matter), I find it odd that folks are doubting LATAM/DL when they say they will be independent.

My view of the alliances --and their pros/cons-- has evolved over time. When the alliances were first launched, they provided an unprecedented means for people to travel somewhat seamlessly wherever they needed to go. IMO this was an improvement over the system it replaced (if there was one), from the standpoint of both airlines and passengers...a win-win.

But, about 10 years in, we started to see revenue sharing JVs between airlines, which established much stronger bonds (on a bilateral basis) than the alliances themselves. From the individual airlines' perspective, this was great evolution because it permitted much closer coordination wrt schedules and fares, and simultaneously shifted the focus away from aspects of the alliances that didn't directly benefit their bottom lines. On a semi-related note, independent airlines are free to operate without pandering to formal alliance rules or informal pressure from other member airlines. We're seeing this now with CZ; having been written off by DL, it decided to go it alone, inked a JV with AA, and is actively seeking other partners that suit its objectives...not so different from DL in a sense.

It should go without saying that the JV trend hasn't been nearly as well received by passengers; previously competitive markets have trended towards monopolistic pricing, and alliance benefits have steadily eroded.

But, as long as JVs continue to receive regulatory approval, I don't think turning back is especially likely. For DL flyers, I suppose this might not matter so much in the grand scheme, as long as the new partnerships (both in and out of ST) provide decide network coverage and benefits.
moondog is offline  
Old Sep 28, 19, 2:57 pm
  #94  
 
Join Date: Dec 2000
Location: MA
Programs: DL DM/2MM Marriott Platinum, HH Diamond,
Posts: 8,479
Originally Posted by moondog View Post
My view of the alliances --and their pros/cons-- has evolved over time. When the alliances were first launched, they provided an unprecedented means for people to travel somewhat seamlessly wherever they needed to go. IMO this was an improvement over the system it replaced (if there was one), from the standpoint of both airlines and passengers...a win-win.

But, about 10 years in, we started to see revenue sharing JVs between airlines, which established much stronger bonds (on a bilateral basis) than the alliances themselves. From the individual airlines' perspective, this was great evolution because it permitted much closer coordination wrt schedules and fares, and simultaneously shifted the focus away from aspects of the alliances that didn't directly benefit their bottom lines. On a semi-related note, independent airlines are free to operate without pandering to formal alliance rules or informal pressure from other member airlines. We're seeing this now with CZ; having been written off by DL, it decided to go it alone, inked a JV with AA, and is actively seeking other partners that suit its objectives...not so different from DL in a sense.

It should go without saying that the JV trend hasn't been nearly as well received by passengers; previously competitive markets have trended towards monopolistic pricing, and alliance benefits have steadily eroded.

But, as long as JVs continue to receive regulatory approval, I don't think turning back is especially likely. For DL flyers, I suppose this might not matter so much in the grand scheme, as long as the new partnerships (both in and out of ST) provide decide network coverage and benefits.
Moondog hits the nail on the head. For years, I have seen people make comments to the effect that various airline members of ST were partners of DL. On the contrary, unless there was a JV or codeshares in place, the other carriers were competitors. And obviously, there were multiple carriers not in ST that DL had cozy relationships with as evidenced by MQM earning charts such as VS, VS, GOL, Jet, WS. Carriers like VS and VS have had years to join ST if it was in their interest to do so.
moondog likes this.
RobertS975 is offline  
Old Sep 28, 19, 3:41 pm
  #95  
 
Join Date: May 2004
Location: formerly Gold now Diamond, formerly MSY, now LAX, formerly NW, now DL
Programs: Hyatt Plat, Hilton Gold, SPG Gold, Delta Diamond/1MM
Posts: 4,333
Yeah I guess it's good that the alliances didn't create huge monopolies at least to the point there wasn't competition.

I assume all of the major DL partners will come up with bilateral FF and code share agreements to benefit from the LATAM moves.

They do need to fix some of the issues that impact being non-ST, like say buying a KL/AF marketed flight on VS, but you can't get DL miles.
NOLAnwGOLD is offline  
Old Sep 28, 19, 8:59 pm
  #96  
 
Join Date: Jul 2005
Location: NYC
Programs: UA-1K MM, AA-Gold, DL-Silver, AS-MVP
Posts: 1,593
Originally Posted by fliesdelta View Post
Yes, I know, but I don't have status with AA (or any OW airline). I'd rather use DL/ST.
Can't you fly RDU-CDG-HKG? Long layover one-way but still 1-stop on ST.

Originally Posted by moondog View Post
It should go without saying that the JV trend hasn't been nearly as well received by passengers; previously competitive markets have trended towards monopolistic pricing, and alliance benefits have steadily eroded.

But, as long as JVs continue to receive regulatory approval, I don't think turning back is especially likely. For DL flyers, I suppose this might not matter so much in the grand scheme, as long as the new partnerships (both in and out of ST) provide decide network coverage and benefits.
That's mostly because there's been enough long-haul competition to at least put pressure on current JV, such as DY, previously WW, and a slew of subsidized Chinese airlines. I have nothing against DL or JV, but my prediction is that large aviation markets will slowly settle into a few mega-carriers (US3, ME3, EU3, China3, Japan2, Latam2, etc.) and only a few LCC/non-aligned carriers on high traffic/high yielding routes. Hopefully AA/UA and their Latin American partners can continue to compete with DL/LA and keep prices in check.
moondog likes this.
hirohito888 is offline  
Old Sep 29, 19, 5:27 am
  #97  
 
Join Date: Oct 2009
Location: TPA International
Programs: Priority Club Pl, Marriot Gold, Delta PM, National EE, Hertz PC, TSA Pre✓
Posts: 62
LATAM will not be in any alliance

The President of the "directorio" of LATAM, Ignacio Cueto stated that LATAM is leaving OneWorld and won't join another alliance. ("nosotros al salirnos de Oneworld quedamos sin alianzas y vamos a sequir avananzando sin alianzas" Rough translation: we are leaving Oneworld remaining without alliances and we are going forward without alliances)
From View from the Wing blog "Delta CEO Ed Bastian told Bloomberg that the SkyTeam, of which Delta is a part, hasn’t “brought a lot of great value to customers..[or] to member airlines” and so they’re trying to create their “own international network of carriers” with Delta “as the centerpiece.”
The full interview with Ignacio Cueto can be found at latercera.com.
See bastian says skyteam has failed for more information about Mr. Bastien's recent statement on alliances.

Last edited by davidlhanson; Sep 29, 19 at 5:48 am Reason: Additional information
davidlhanson is offline  
Old Sep 29, 19, 7:33 am
  #98  
FlyerTalk Evangelist
 
Join Date: Dec 2000
Location: Shanghai
Posts: 31,193
Originally Posted by davidlhanson View Post
they’re trying to create their “own international network of carriers” with Delta “as the centerpiece.”
To me, this is the most flawed, not to mention arrogant, aspect of DL's new plan.
moondog is offline  
Old Sep 29, 19, 8:25 am
  #99  
Suspended
 
Join Date: Sep 2005
Location: SEA
Programs: UA Silver, BA Gold, DL Gold
Posts: 9,779
Originally Posted by moondog View Post
To me, this is the most flawed, not to mention arrogant, aspect of DL's new plan.
I don’t think that is DL’s plan. Even if it were, I don’t think it arrogant at all. None of the alliances would be remotely viable without a major US and European carrier as the centerpieces.

To the extent DL has a plan to create a new alliance, it is really a question of depth of integration. As this very development shows, DL simply sees more value in deep ties with strategic partners rather than a loose confederation of carriers. Heck, it isn’t any different than the way the other big players see the landscape, whether they are as explicit about it or not.
CalebMCO likes this.
pbarnette is offline  
Old Sep 29, 19, 9:19 am
  #100  
 
Join Date: Mar 2010
Programs: DL GM, Bonvoy Gold
Posts: 8,039
Personally I think we will see alliances go away at some point. In the end they are limiting for airlines.
jdrtravel is offline  
Old Sep 29, 19, 2:36 pm
  #101  
 
Join Date: May 2012
Location: MCO
Programs: AA, B6, DL, EK, EY, QR, SQ, UA, Amex Plat, Marriott Tit, HHonors Gold
Posts: 7,006
Originally Posted by jdrtravel View Post
Personally I think we will see alliances go away at some point. In the end they are limiting for airlines.
I agree. The idea of having a bunch of airlines that only partner with one another seems antiquated and restrictive.
cmd320 is online now  
Old Sep 29, 19, 3:15 pm
  #102  
 
Join Date: Jun 2004
Location: ATL
Programs: Delta Plat
Posts: 5,811
Originally Posted by moondog View Post
To me, this is the most flawed, not to mention arrogant, aspect of DL's new plan.
Why? Sky team was formed by 4 airlines about 20 years with DL arguably at the center.

Every member of ST has some airlines they preferentially deal with. And probably all have agreements with airlines outside ST.

DL has major partners probably (as of LATAM) now handle more useful routes for DL than ST alone does. Why should each airlines not have partners as best suits their needs?

Just because the DL partners are what they want, does not imply every in it would have the same set of partners.
exwannabe is offline  
Old Sep 29, 19, 3:32 pm
  #103  
FlyerTalk Evangelist
 
Join Date: Dec 2000
Location: Shanghai
Posts: 31,193
Originally Posted by exwannabe View Post
Why? Sky team was formed by 4 airlines about 20 years with DL arguably at the center.
Delta took things a step further when it started placing other members into tier buckets, and adjusted benefits accordingly. This was definitely NOT part of the original vision for Skyteam. The idea of giving founding members more power than new entrants is a little easier to swallow, but DL asserting itself as de facto king is a bit over the top. What incentive does that give airlines that aren't in its circle of trust to cooperate? Should they simply roll over and accept that they are second class members?
moondog is offline  
Old Sep 29, 19, 4:12 pm
  #104  
 
Join Date: Mar 2013
Programs: DL PM, MR Titanium/LTG, Hilton Diamond
Posts: 7,627
Originally Posted by moondog View Post
Delta took things a step further when it started placing other members into tier buckets, and adjusted benefits accordingly. This was definitely NOT part of the original vision for Skyteam. The idea of giving founding members more power than new entrants is a little easier to swallow, but DL asserting itself as de facto king is a bit over the top. What incentive does that give airlines that aren't in its circle of trust to cooperate? Should they simply roll over and accept that they are second class members?
Except what is SkyTeam without DL and the partners it has stakes in? The answer is an irrelevant alliance of nobodies outside of a couple of regional players.

The incentive for the 2nd tier is that if they don't play ball they are left with nothing and OW and *A are pretty much tapped out (apart from of course this newly created hole in SA)
pbarnette and CalebMCO like this.
Duke787 is offline  
Old Sep 29, 19, 5:15 pm
  #105  
 
Join Date: May 2009
Location: Seattle, WA
Programs: DL Diamond 1MM, UX Suma Gold, Marriott Bonvoy™️ Gold, Hilton Gold, Avis Preferred, Hertz PC
Posts: 3,538
Originally Posted by moondog View Post
Delta took things a step further when it started placing other members into tier buckets, and adjusted benefits accordingly. This was definitely NOT part of the original vision for Skyteam. The idea of giving founding members more power than new entrants is a little easier to swallow, but DL asserting itself as de facto king is a bit over the top. What incentive does that give airlines that aren't in its circle of trust to cooperate? Should they simply roll over and accept that they are second class members?
While Delta is more explicit about categorizing into tiers than most, differential earning is nothing new across alliances. United offers 200% on top first and business fares on Lufthansa, but only 125-150% on many other Star Alliance carriers, for example.

The tier system only affects mileage earning, not benefits; while Delta has negotiated extra benefits with some of their close partners, the SkyTeam benefits like lounge access and SkyPriority boarding are more or less uniform across all ST carriers.
BenA is offline  

Thread Tools
Search this Thread
Search Engine: