British Airways received a huge boost this week when LATAM, Latin America’s largest airline, announced that it had chosen oneworld over Star Alliance or Skyteam. LATAM was formed in 2012 after Chile’s Lan completed the takeover of Brazil’s TAM. As with both British Airways / Iberia & Air France / KLM, both LAN & TAM are set to retain their identity within a single holding company.
Before the merger LAN had already been a member of oneworld while TAM was signed up with Star Alliance; once the dominant force, Star Alliance will now control a reduced 16% of the Latin American market, while oneworld will have a near 30% share.
From both the oneworld and British Airways point of view, this development finally gives both organisations access to the dominant, fast growing and critically important Brazilian market. Although British Airways has tradionally been no more than a bit player in the Latin American market, recent years have seen strong growth in passenger traffic between Heathrow and both Rio & Sao Paolo. With access to a local partner, British Airways can now expect to significantly expand its reach to secondary Brazilian destinations that do not warrant their own dedicated service. Of perhaps equal importance, it will allow British Airways to compete with both Air France / KLM (Skyteam) & Lufthansa (Star Alliance) on a far more level playing field than before.
However, other than a single, additonal route to Buenos Aires in Argentina, British Airways has pretty much decided to leave South America to its IAG partner Iberia. With the current travails being endured by its Spanish partner however, it would come as no surprise if British Airways was to launch new routes in the near future. The most likely new destination must surely be Santiago de Chile; not only is it the headquarters and home base for LAN, it also currently lacks any direct flights to the UK (both LAN & Iberia currently operate between Madrid & Santiago). Having secured additional slots at Heathrow following the 2012 takeover of bmi, and with the airline set to take delivery of its fuel efficient Boeing 787 Dreamliners later this year, it must surely only be a matter of time.