The merger between TAM of Brazil and LAN of Chile offers some interesting possibilities for the new airline group that will be operating under separate names in South America.  One big question is which alliance will the group adopt.  Currently, TAM belongs to the Star Alliance and LAN is a member of Oneworld.  

This new airline will have a bit more bargaining power when it comes to alliances and they have a few choices to make going forward.  The first is to participate in both under the respective brands just as before.  I’m extremely doubtful that that will happen. 

The second is to pick an alliance between Star Alliance and Oneworld.  In this scenario, I would give Oneworld the upper hand simply because in this merger, LAN will control more and it is the Oneworld partner.  American Airlines won’t want to let them go since they fit nicely into the AA system.  In addition, TAM might offer Oneworld quite a bit of access to other parts of South America it really doesn’t have at this point.  However, the Star Alliance has a lot to lose and a lot to gain.  Especially with the Continental United merger going forward.  One could see the Star Alliance attempting to bring the LAN system over to the Star Alliance with some incentives.

Finally, there is SkyTeam who has a lousy representation in South America presently.  SkyTeam a la Delta lost a big fight on the trans-Pacific side when it failed to win over JAL.  A TAM/LAN entry into SkyTeam would be a huge win for that alliance and I suspect we might just see this dark horse try to bring them over to their side.  This is exactly the right time for SkyTeam to woo such a company because there will already be integration efforts going on between the two as they consumate their merger. 

In now way does this new merged company go ignored as a participant in an alliance.  I do think it will be a fight and I do think all 3 alliances will be offering significant incentives to win LATAM over.

Filed under: Airline News, Airlines Alliances by ajax
No Comments »