The Aviation industry was rocked this week by the shock announcement that Delta purchased a 20% stake in LATAM, Latin America’s largest carrier. What does this news, along with LATAM’s decision to leave Oneworld, mean for both Delta and American Airlines cardholders?
LATAM & Delta Join Forces
The world of travel was turned on its head with the recent news that Delta Airlines had agreed to purchase a 20% stake in South and Central America’s leading carrier, LATAM Airlines. If this story wasn’t big enough, it was followed soon after that by the not-so-surprising news that LATAM planned to leave Oneworld and join forces with its new partner. According to a press release from Delta, the world’s largest airline, their partnership with LATAM – South America’s largest airline – will serve to connect the Americas as never before and give the partnership a leading position in five of the top six Latin American markets served directly from the U.S. This partnership will be further boosted by Delta’s pre-existing Latin American connections – namely with fellow SkyTeam member Aeromexico. The news of Delta’s stake in LATAM, as well as LATAM’s impending departure from the Oneworld Alliance, has vast ramifications both in the worlds of travel and credit cards. Not only does the move strengthen the value of Delta, LATAM, and other SkyTeam co-branded airline rewards credit cards, but it also weakens the value of cards from Oneworld carriers that benefited from LATAM’s saturation in the Latin America market – namely, American Airlines.
LATAM, Delta, & SkyTeam Airline Credit Cards
One of the biggest winners in the Delta and LATAM merger is the business traveler who owns co-branded airline credit cards. LATAM has long been the preferred airline of business travelers to Latin America, thanks to the carrier’s impeccable service and frequent flights to, and from, the United States. The new partnership with Delta opens a wealth of travel opportunities for LATAM Visa Signature Cardholders, as they now have access to both Delta and other SkyTeam Alliance members, such as Korean Air, Air France, KLM, and more. The real winners, however, are those who hold Delta credit cards, as they now have more avenues into the South American market. While SkyTeam currently features both Aeromexico and Aerolineas Argentinas, adding LATAM to the mix gives substantial additional value to cards like the Platinum Delta SkyMiles Card (which recently upped its signup bonus to 75,000 miles), the Delta Reserve Card, the Gold Delta SkyMiles Card, and other Delta credit card offerings. This increased value comes from greater access to the South American continent, thanks to more routes – and more flights – between the U.S. and some of the biggest hubs in Latin America. In turn, the changes offer greater options for airline reward miles redemptions.
American Airlines & Oneworld Airline Cards
The gain felt by Delta and SkyTeam cardholders, however, is the loss of both American Airlines and Oneworld Alliance credit cardholders. American Airlines has long used its alliance with LATAM to position itself as a leader in trans-Americas travel from its hub at Miami International Airport (MIA), so the loss of its Oneworld partner is a massive blow to the carrier. It is especially hard for American Airlines credit cards – especially business travelers with cards such as the CitiBusiness® / AAdvantage® Platinum Select® Mastercard® or the Citi® / AAdvantage® Executive World Elite™ Mastercard®. LATAM leaving Oneworld restricts American’s access to Latin America greatly, meaning Oneworld travelers who frequent locations such as Rio de Janeiro, Santiago, Buenos Aires, Bogota, and other destinations, will experience much greater difficulty in booking reward flights to these hotspots than previously.
Stay on Top of the Latest News in the Credit Card and Travel Industries
LATAM’s decision to depart Oneworld and join forces with Delta Airlines is a game-changer not only in the aviation business world, but also for frequent flyers. If you want to stay on top of the latest news and views concerning credit cards and rewards programs, make sure you keep checking back with us. At BestCards, we have reviews on hundreds of cards in every category. Whether you are looking for a travel rewards card from a big issuer, such as Chase or American Express, or a cash back or balance transfer card from your local credit union, we have exactly what you are looking for.
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