LATAM Airlines finally gets approval on long-proposed JVs with AA, IAG

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Chile’s Free Competition Defence Court (TDLC) has approved the joint venture agreements LATAM Airlines Group struck nearly three years ago with both American Airlines and the International Airlines Group (IAG), on both passenger and cargo businesses.

“This decision, in principle, is an important precedent for aviation in our region,” says Enrique Cueto, CEO of LATAM Airlines Group. “As has been demonstrated in other parts of the world where JBAs are already a reality, this is an opportunity to ensure growth for the industry, increase passenger traffic and bring Chile closer to the world, as well as promote tourism, business travel and the economy through aviation.”

The LATAM Group says it is currently analysing the implications of the TDLC’s mitigation measures and will communicate its position once they have been evaluated in depth.

Since the announcement of these agreements in January 2016, LATAM’s JBAs have been approved by the regulatory bodies of Brazil, Colombia and Uruguay.

The approval of the joint ventures hit a speed bump in November 2016, when Chile’s FNE competition regulator expressed concerns that the joint ventures risked increasing fares and lowering quality on some routes. This sparked fears that the country’s TDLC antitrust court might reject the deal.

The JBAs will allow the airlines to coordinate schedules and prices for flights, similar to the North Atlantic revenue-sharing agreement which already exists between IAG and American Airlines.

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