Brazilian authority approves agreement between LATAM and IAG

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Mar 09, 2017: The administrative court of economic defense of the CADE (Administrative Council for Economic Defense) in Brazil has approved the Joint Business Agreement (JBA) between LATAM Airlines Group and International Airlines Group (IAG), representing the final stage of its evaluation process that began in June 2016.

During the review, the CADE evaluated the scope of the agreement in terms of free competition and the benefits that it will bring to passengers, including improved connectivity, an expansion of the destination network and reduced prices.

“This is great news for Brazil, as passengers will be able to enjoy the benefits of better connectivity, new routes, greater competition and lower prices for travel between Brazil and Europe, which will also increase tourism and bilateral trade. This decision adds to the many approvals of this type of agreement globally and reaffirms the conclusion of free competition authorities about the benefits that they bring for both passengers and countries’ economies,” said Enrique Cueto, CEO of LATAM Airlines Group.

The approval granted by the Brazilian authority includes two types of commitments. First, LATAM is committed to launch two new routes between Brazil and Europe to improve connectivity and the travel alternatives between the two regions.

Second, a measure regarding the capacity offered between London and São Paulo, the transfer of slots as well as access to interline distribution for any new operator wanting to fly said route.

All the commitments will last for between seven and 10 years, during which time there will be an independent consultant who will review the fulfilment of these measures.

The company is confident that – like the CADE – the competition authorities of other jurisdictions will evaluate and take into account the substantial benefits that these agreements bring to passengers. Likewise, it reiterates that such agreements are part of the development of air transport to provide better quality services and lower prices, helping to promote tourism in the region.

LATAM will continue to actively collaborate with the relevant authorities and provide all background information necessary.

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