CADE clears a joint venture between LATAM and Delta without conditions

This Wednesday (24 February), the Administrative Council for Economic Defense (CADE) unconditionally cleared the joint venture contract for a strategic alliance between LATAM and Delta. Through this transaction, the firms will work together on air transport services for travelling passengers and freight in routes connecting the US, Canada, and South America.

LATAM Airlines Group S.A. is the holding company of the Latam Group. The firm mainly operates in the freight and passenger transport segments. Delta Airlines is an American public company that provides the same services. However, it does not operate Brazilian domestic airways but only international routes between Brazil and the United States.

The contract was signed in May 2020, then notified to CADE. On its analysis, the General Superintendence has found no significant barriers regarding airport infrastructure and no regulatory restrictions. In addition, the General Superintendence mentioned the strong rivalry between companies in that relevant market. For these reasons, it cleared the joint venture without conditions.

CADE's Tribunal, on the other hand, expressed concern with competition in the relevant market and requested the case for adjudication by the board last October.

Decision

This Wednesday, the Rapporteur of the case, Commissioner Luis Braido, stated in his opinion that the transaction raises no competition concerns in any of the segments. After analysing the routes mentioned by the agreement, Mr. Braido found the transaction "does not seem to stiff competition in a considerable part of the relevant market, does not create or strengthens a dominant position, nor does it translate into dominance of a relevant market of goods or services".

Thus, the Tribunal affirmed the position of the General Superintendence, deciding to clear the transaction unconditionally.

Access the Administrative Proceedings 08700.003258/2020-34.