Chile approves LATAM’s tie-up with American and IAG

Chile has rubber-stamped LATAM Airlines Group joint business agreements (JBA) with American Airlines and International Airlines Group (IAG).

The Court of Free Competition (TDLC), the country’s anti-trust tribunal on Wednesday (31 October) approved the JBA for both the passenger and cargo businesses.

The approval comes with conditions and include requiring LATAM to maintain its capacity on direct routes from Santiago to both Miami and Madrid, and to add capacity on routes to North America and Europe.

The proposed LATAM-American joint venture (JV) will cover routes to Brazil, Chile, Colombia, Paraguay, Peru and Uruguay. IAG’s JV with LATAM will include routes to Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Paraguay, Peru and Uruguay.

American and LATAM both said they are now evaluating the mitigating conditions included in the agreement.

LATAM chief executive Enrique Cueto said JBAs are a “reality” and an “an opportunity to ensure growth for the industry”.

American chairman and chief executive officer, Doug Parker said he is confident that these types of agreements are the “future of the airline industry” as they have been proven to benefit consumers, local economies and tourism industries, while also encouraging market growth and competition.

Since the JBA with LATAM Group was announced in January 2016, the JBAs have been approved by Brazil’s Administrative Council for Economic Defense (CADE), the antitrust division of the Ministry of Justice; by Aerocivil, Colombia’s civil aviation authority; and by DINACIA, Uruguay’s civil aviation authority.