Delta Airlines is partnering with Chile-based LATAM Airlines and investing nearly $2 billion to form the leading airline partnership throughout the Americas, the company announced on Thursday.
The strategic partnership, which will bring together the leading airlines in both North and South America, will serve 435 destinations worldwide and carry more passengers between North America and Latin America than another other airline partnership in the world.
The investment is significant. Delta will invest $1.9 billion for a 20 percent stake in LATAM at $16 per share. Delta has also agreed to invest another $350 million in support of the partnership, and in return will acquire four A350 aircraft from LATAM with another 10 additional A350 aircrafts to be delivered beginning in 2020 through 2025.
Both sides expressed their delight over the landmark deal.
"This transformative partnership with LATAM will bring together our leading global brands, enabling us to provide the very best service and reliability for travelers to, from and throughout the Americas," said Ed Bastian, Delta's chief executive officer. "Our people, customers, owners and communities will all benefit from this exciting platform for future growth."
"This alliance with Delta strengthens our company and enhances our leadership in Latin America by providing the best connectivity through our highly complementary route networks," said Enrique Cueto Plaza, chief executive officer of LATAM. "We look forward to working alongside one of the world's best airlines to enhance the travel experience for our passengers."
The partnership is aimed at benefiting both carriers with LATAM expected to improve free cash flow generation which will reduce their forecasted debt by over $2 billion by 2025.
For consumers, the partnership will mean a more seamless travel experience, fewer flight connections, and better customer convenience.
Combined, Delta and LATAM will be the leading airline service in five of the top six Latin American markets from the U.S., according to a Delta press release on Thursday.