IAG, the parent company of British Airways and Iberia, and LATAM, the parent company of LAN Airlines and TAM Airlines, have today announced the signing of a joint business agreement for flights between Europe and South America. The full press release is here. The deal is subject to regulatory approval which IAG estimates to take between 12-18 months.
When joint ventures like this happen you will see codeshare agreements, where one airline sells you a seat the other airline's aircraft.
On the air miles front, this potentially opens fascinating arbitrage opportunities because Oneworld airlines calculate your air miles based on the marketing carrier and not the operating carrier. For instance if you were to fly the famous London City to New York British Airways all business class A318 flight, but your flight number was AA6229, then your marketing carrier is American Airlines and the operating carrier is British Airways.
So with this in mind observe the difference if you credit your miles to American Airlines AAdvantage, especially in deep discount economy, if your marketing carrier is LATAM…
compared with British Airways.
While it is a little too early to speculate the exact earnings on each airline, mergers and joint venture agreements are some of the best cans of worms to open for hobbyists like us. 🙂