TDLC approves with attenuation the agreements between Latam and the American and British Airways-Iberia companies

Finally, there was white smoke almost three years ago that the National Economic Prosecutor's Office (NEF) learned of the signing of two joint trade agreements – also known as Joint Trade Agreements (JBAs) – signed by Latam Airlines with American Airlines and the IAG holding company, to which British Airways and Iberia belong.

The Court for the Defense of Free Competition (TDLC) states that the agreements concluded between the companies in the region comply with the regulations governing free competition and approve these agreements. . Its approval was one of the issues most Latina worried about, considering that the pacts had already been endorsed by authorities from other latitudes, such as Brazil, Colombia and Uruguay.

Latam Airlines CEO, Enrique Cueto, pointed out that "in This is an important precedent for commercial aviation in our region."

According to these airlines, these agreements are intended to compete more effectively with transport services than other companies and offer consumers a greater advantage. offer destinations at competitive prices. Following the lifting of the secrecy of the documents subscribed, it was also revealed that these agreements implied the sharing of certain receipts and the joint development of rules and conditions of services.

This decision of the TDLC is the subject of a consultation conducted by the Association of Chilean Societies. Tourism (Buyer), which accuses these agreements a sharp increase in the concentration of certain routes. The National Economic Prosecutor's Office joins the union, which foresees possible price increases, a possible reduction in the quality of service on some routes, such as Santiago-Miami, Santiago-Madrid and Santiago-London – and an unlikely entry of competitors on these links.

Regarding the mitigation measures of the TDLC, Latam said that she was badyzing its implications. However, company sources related to the process view the measures as "strict", although they are being evaluated.

In "the badysis"

the TDLC imposed on the companies nine measures: establishing an income distribution formula of the agreements maintain the capacity offered on the routes Santiago-Miami and Santiago-Madrid and increase the capacity available on routes to North America and Europe. In addition, the obligation to offer frequent transportation contracts, a special distribution and a combination of fares to new arrivals on routes Santiago-Miami and Santiago-Madrid. In addition, airlines will be required to appoint a consultant to verify these conditions and consult the TDLC six months before the expiry of one of the agreements, valid five years ago. Neither can apply implicit negative prices on indirect routes based on the Santiago-Miami and Santiago-Madrid routes.

Seven conditions are similar to those proposed by Latam in court, but there are two new conditions: establish a formula for payment on the fourth use condition, do not apply implicit negative prices on indirect routes involving flights Santiago-Miami and Santiago-Madrid as the main stretch. With regard to the first circumstance, it will essentially be a question of establishing objective conditions of distribution among the members of the JBA. An interpretation to the fourth condition is that there were no "subsidies" with the connection routes that flow from the main lines, which allows the companies to manage the losses on the connection routes. For example, Santiago-Miami flights do not subsidize a possible link, Miami-Boston, and allow companies to operate at "negative" or "prdida" prices.

There are now 10 days for each of the actors to file a complaint in the Supreme Court. In the case of Latam, you can do it if you feel that the conditions are too restrictive to execute the agreements. Consulted, the study Bravo and his collaborators evaluate, together with the National Corporation of Consumers and Users (Conadecus), if it files a claim.

Claims
The parties have a period of 10 working days. to file a complaint and bring the case to the Supreme Court.

"This decision, in principle, constitutes an important precedent for commercial aviation in our region." LATAM AIRLINES