The parent company of British Airways and Iberia, International Airlines Group, has today announced that British Airways and Iberia are to launch a joint-business with LAN and TAM Airlines on flights between Europe and South America.
LAN and TAM Airlines, which have hubs in Chile and São Paulo are owned by LATAM Airlines Group and are due to merge their operations under a single brand, LATAM.
The launch of the joint business will be subject to regulatory approval which, if granted, will allow the four airlines to co-ordinate routes, schedules, pricing and marketing of flights between Europe and South America.
Passengers will also benefit from reciprocal recognition of airline frequent flyer benefits (though that already happens to an extent as all airlines are members of the Oneworld alliance) and easier access to codeshare flights on the airlines’ respective local & regional networks.
The joint business is likely to operate on a similar basis as the current joint-venture between British Airways, Iberia and American Airlines on flights between Europe & North America.
Currently, the four airlines operate up to 45 flights a day between Europe and South America.
LAN & TAM currently have a small presence on London which TAM operating a flight to São Paulo.
However, the launch of the joint-business could prompt British Airways to extend its presence in South America beyond São Paulo, Rio de Janeiro, Buenos Aires and Lima.
We would speculate that the launch of a direct route from London Heathrow to Santiago is a good possibility after the launch of the joint-business.
LAN and TAM have a much larger presence in Europe at Madrid airport and more new routes from Madrid to secondary cities in South America are also a possibility.
Regulatory approval for the joint business is expected to take 12-18 months and the joint business should launch in stages shortly after regulatory approval is granted.
Cutrently, it is not proposed that fellow members of International Airlines Group, Aer Lingus and Vueling, will join the joint-venture.