LATAM Airlines Looks to Take Its Loyalty Program Private

Chilean airline LATAM Airlines Group SA has stated that it will not renew its contract with its loyalty program company Multiplus SA after 2024. It plans to take its loyalty program company Multiplus SA private in a $289 million acquisition deal.
 
LATAM Airlines Brazil announced its intention to offer to acquire all of the common shares in Multiplus that LATAM’s affiliates do not currently own, and to subsequently de-list Multiplus from the B3 Novo Mercado in Brazil and cancel its registration.
 
After the delisting, LATAM said it will merge Multiplus with its LATAM Pass loyalty program. LATAM said it has the goal of increasing Multiplus’ market share, as the merger should yield cost and revenue synergies.
The airline described the Brazilian loyalty points market as “increasingly competitive.” “This is the most viable solution to Multiplus’ current challenges,” LATAM said.
Since the combination of LAN and TAM in 2012, LATAM Airlines Group’s affiliates have operated two separate and distinct frequent flier loyalty programs: LATAM Fidelidade in Brazil and LATAM Pass in Spanish-speaking markets.
LATAM airlines Brazil is the leading airline in Brazil by over 40 percent ASKs (available seat kilometers). As a result, they offer the most comprehensive airline rewards offerings for frequent fliers in the Brazilian market.
However, the combined efforts of Multiplus and LATAM have not been effective in bolstering LATAM’s leadership in the marketplace. Multiplus’ market shares have not improved, and there has been an increase of competition in the market.
 
In the future, LATAM Airlines Brazil intends to manage its frequent flyer program in-house, gaining flexibility in the management of its revenue strategy.
 

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