Brazil’s competition watchdog gives Delta-LATAM JV final nod

Brazil’s competition watchdog (Conselho Administrativo de Defesa Econômica – CADE) has given its final approval of a joint venture between Delta Air Lines (DL, Atlanta Hartsfield Jackson) and LATAM Airlines Group, without conditions, the two partners announced in a joint statement. This follows CADE giving its initial approval in September 2020, which had in turn been the first regulatory green light for the JV since it was signed in May 2020. The approval covers only LATAM’s Brazilian operations. The Delta-LATAM agreement has also been approved in Uruguay, but the application process continues in other South American countries, including the group’s home country Chile. The proposed JV with Delta Air Lines – which holds a 20% stake in LATAM Airlines Group – aims to include LATAM Airlines Brasil, LATAM Airlines, LATAM Airlines Colombia, LATAM Airlines Ecuador, and LATAM Airlines Perú. It will allow, for example, codeshare deals between Delta and the LATAM subsidiaries; shared terminals at New York JFK’s Terminal 4 and Sao Paulo Guarulhos’ Terminal 3; reciprocal lounge access; and points to be redeemed on each other’s loyalty schemes. The agreement “seeks to enhance the route networks served by both airlines, delivering a seamless travel experience between North and South America,” the February 24 announcement said, while CADE’s final approval will bring “improved travel options, shorter connection times, and new routes between North America and Brazil.” Delta CEO Ed Bastian hailed the planned venture as an initiative to “create the premier airline alliance of the Americas.” In related news, Delta Air Lines has faced criticism this week that it made payments to management staff while workers remained on unpaid leave, Bloomberg reported following an initial report in View From the Wing. The latter cited a source at Delta who claimed that the payments ranged from USD8,000 for managers to USD250,000 or more for senior vice presidents. Delta acknowledged the payments, arguing that they were to help offset earlier cuts. While some managers’ salaries had been cut by 50%, the payments brought the reduction for employee groups below executive-officer levels to 20%-30%, Bastian explained in a memo to employees on March 1.