Chile: TDLC places conditions on Latam-AA-IAG agreement

After a nearly three-year investigation, Chile’s Tribunal for the Defense of Free Competition (TDLC) approved, with some conditions, the joint agreement between the airlines Latam, American Airlines and the IAG group, which includes British Airways and Iberia.

“We have concluded that the risks that derive from the agreements consulted outweigh their benefits,” the court said. As part of its approval, a series of commitments were imposed, including:
1. Establishing a formula for JBA consultation on revenue distribution .
2. Maintaining the capacity currently offered on the Santiago-Miami and Santiago-Madrid direct routes.
3. Increasing the capacity offered on the North America and Europe routes.
4. Avoiding implicit negative prices on indirect routes that have the Santiago-Miami and Santiago-Madrid flights as
their main leg.
5. Offering tariff combination agreements for new entrants to the Santiago-Miami and Santiago-Madrid direct routes.
6. Offering special apportionment agreements to new entrants on the Santiago-Miami and Santiago-Madrid direct
routes.
7. Designating a consultant to supervise these conditions.
8. Consult the Tribunal six months before any of these agreements reaches five years of validity.

“As demonstrated in other parts of the world where these alliances are already a reality, representing an opportunity to ensure the growth of the industry, increasing passenger traffic and bringing Chile closer to the world, further boosting tourism, business travel and the economy through the airline industry “, said Enrique Cueto, CEO of LATAM Airlines Group.