Star Alliance chief urges LATAM to consider growth opportunities

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While declining to be drawn into speculation on whether it can keep Brazilian carrier TAM in its grouping after the airline's merger with Chilean carrier LAN, Star Alliance's new chief appeals to the carriers to consider the growth opportunities the network can offer them.

"We think the combined company would be well served by Star but ultimately they have to make the decision as to what's best for their companies and shareholders," says chief executive Mark Schwab at an interview with Flightglobal Pro on the sidelines of Eva Air's future membership announcement in Taipei.

He adds that Star Alliance is in "active discussion" with the management team to evaluate its alliance options and that the merger is likely to be completed within weeks.

The two Latin American carriers are set to finalise their merger, which will create LATAM and become the region's largest operator. The partners must then also decide on the alliance strategy for the merged carrier.

LAN may have an inclination towards Oneworld, because its leadership were founding members of the alliance, says Schwab.

"We acknowledge that this is a hurdle for us to overcome. But by the same token, our fundamental argument to them is you need to look at the combined company coming together, you have to think not about your history, but what are your growth opportunities," he adds.

Star Alliance has a comprehensive network with more hubs in North America than the other two alliances, a strong position in Europe and an "unbeatable" position in the Asia-Pacific, argues Schwab.

He urged LATAM to think about the strong growth coming out of Africa and how the alliance's three members in the African continent can provide a strong base for its expansion into the territory.

"You can imagine over time, Latin America to Asia-Pacific has to be a big growth market. Would you rather partner with an alliance with a couple of people in the region or a full gamut, north to down south, a full comprehensive network?" adds Schwab.

Oneworld, meanwhile, has said that it remains confident that it will be able to retain long-time member LAN in its alliance once the merger is completed.

Securing LATAM would be a double win for Oneworld as besides keeping LAN in the camp, it would also give the alliance its first carrier in Brazil.