Chile’s antitrust court will approve ’ merger with Grupo TAM but only if they drop at least one of their global alliances, support cabotage in Chile’s domestic market, return some slot allocations and open their frequent flyer program to other airlines for five years.
The court’s decision, which included some dissenting judgments, also calls for the release of four daily slots assigned to service between TAM’s Sao Paulo Guarulhos International Airport hub and Chile’s capital Santiago as well as restrictions on other services between the two cities and the loss of four fifth-freedom rights to Peru’s capital of Lima currently held by LAN, says the Tribunal de Defensa de la Libre Competencia, or TDLC, in an online statement.
Approval is also conditioned on several more commitments from the two carriers if they want to proceed with the creation of Latam Airlines, which will rank among the world’s largest operators. Among these, Oneworld’s LAN and’s TAM will have to cut ties with partners not affiliated with the alliance they choose to remain with, agree to maintain current fares from Chile’s capital to Rio de Janeiro and Sao Paulo and operate at least 12 weekly roundtrips between Chile and the U.S. and seven to Europe.
Both carriers have previously said they would address the alliance issue after the merger was completed.
The airlines in a joint statement, while noting the court’s approval, note, “The antitrust court’s resolution is complex and considers a series of mitigating measures. Therefore, both companies are currently analyzing in depth the implications and impact of the measures imposed by the court.
“LAN and TAM will publically communicate the companies’ position regarding the antitrust court’s resolution and its various mitigating measures as soon as possible,” they add.