ALTA: LATAM likely to go with Oneworld

Panama City
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The chief of Latin America's largest airline group, LATAM Airlines, has indicated very strongly that the combined carrier will be a Oneworld member, ahead of an alliance membership decision that the airline expects to announce by year-end.

Chilean airline group LAN and Brazil's TAM closed on their merger on 22 June, creating one of the biggest carriers in the world with affiliates in various Latin American countries. LAN is a Oneworld member while TAM is in Star Alliance. Anti-trust regulators, in approving the merger, had stipulated that LATAM cannot be in the same alliance as AviancaTaca, the other major Latin American airline group. AviancaTaca joined Star Alliance in June, which means TAM would have to leave Star.

LATAM's chief executive Enrique Cueto says the merged carrier would "prefer" for both LAN and TAM to be in the same alliance. "It will be easier to manage them together in one alliance," he tells Flightglobal at the sidelines of the ALTA Airline Leaders Forum in Panama City.

Cueto says LATAM will likely make a final decision on the alliance by end-2012. Cueto had previously said that LATAM could keep TAM unaligned and independent of alliance membership, but he indicates that LATAM is likely to be in the same alliance.

He reiterates that LAN is "very happy" with its Oneworld membership. Cueto points out that LAN's Oneworld partner, American Airlines, has a hub in Miami, which is a gateway to Latin America from the USA. Another Oneworld member, Spain's Iberia, is also strategically important to LAN's interests in Spain, says Cueto.

"For LAN, our main partner is Oneworld," he adds.

While Cueto acknowledges that TAM has had some key partners in Star, such as Lufthansa, Cueto says there is "no way" TAM can remain a Star member with the anti-trust stipulations laid out by anti-trust regulators on LATAM. "Star is out of the picture, TAM must leave Star," he says.

LAN became a Oneworld member in 2000. LATAM's entry into Oneworld will give the alliance a substantial presence in the Latin American region and finally give it a share of the Brazilian market. LATAM has a combined fleet of more than 310 aircraft and operates to about 150 destinations in 22 countries. Besides TAM in Brazil and LAN in Chile, LATAM also has local subsidiaries in Argentina, Colombia, Ecuador and Peru.