The US Department of Transportation (DOT) has tentatively approved a proposed joint venture between Delta Air Lines and LATAM Airlines Group, more than two years in the making, but places certain conditions on final antitrust immunity for the deal.
The joint venture, which the companies have been pursuing since mid-2019, was approved by Chilean competition authorities in October 2021.
“The Department proposes the following critical remedies and conditions to address these issues: maintenance of current third-party interline agreements, the removal of exclusivity provisions,…a 10-year expiration and reassessment requirement, and the removal of a capacity constraint clause located in the joint venture agreement, which artificially limits growth during the initial stages of the proposed relationship,” the DOT writes in an order published on 23 June.
“With these conditions, we have tentatively determined that the alliance is likely to generate public benefits while the US-South America market would remain sufficiently open to existing and new competition,” it adds.
According to the filing, interested parties now have 14 days to respond to the tentative decision.
The two airlines, which have spent more than two years planning and preparing for the JV, express relief at the decision.
”LATAM Airlines Group and Delta Air Lines applaud the US Department of Transportation’s tentative decision to approve their joint venture between the US/Canada and South America (Brazil, Chile, Colombia, Paraguay, Peru, and Uruguay) that will vastly improve travel options and service for customers traveling between the two regions,” the companies say in a joint statement.
”Once the DOT finalises its decision, both airlines will work to quickly deliver the consumer benefits approval unlocks, including expanded capacity, increased routing options between the US/Canada and South America, superior frequent flyer benefits and shared airport facilities and…
