Company Update (NASDAQ:AAL): American Airlines Group Inc and LATAM Airlines Group Announce Plans for a Joint Business

American Airlines Group Inc (NASDAQ:AAL) and LATAM Airlines Group are applying for regulatory approval to enter into a joint business (JB) to better serve their customers. The JB, which is subject to securing regulatory approvals, will offer American and LATAM customers an expanded network with coordinated schedules providing seamless travel on the airlines’ flights between the United States and Canada and six South American countries – Brazil, Chile, Colombia, Paraguay, Peru and Uruguay.

If approved, the JB will enhance the existing strategic partnership between American and LATAM allowing closer commercial cooperation that will provide significant benefits for consumers. These include:

  • Expanded network offerings, with access to more routes, frequencies and destinations
  • More competitive fares
  • Increased choices for customers
  • Seamless connectivity

The airlines plan to file for antitrust immunity from the U.S. Department of Transportation and appropriate local authorities in South America. LATAM and American launched their first codeshare in 1999 and became oneworld partners when LAN Chile joined the alliance in 2000.

“When great airlines can work together, customers win with more choices for when and how they travel,” said Doug Parker, chairman and CEO of American Airlines. “Customers will gain seamless access to more frequent and convenient schedule options than either carrier could offer individually. In the eight countries covered by this new joint business agreement, customers will have access to nearly 330 destinations, including 100 more South American destinations than American’s network serves today.”

Enrique Cueto, CEO of LATAM Airlines Group added, “We’re bringing the United States, Canada and South America closer together than ever before, by providing both American and LATAM customers even greater benefits. This is a positive step in offering them the best connecting network in North and South America and it increases the possibility of adding new destinations to our networks in the future.”

Through the proposed joint business, American will provide LATAM customers greater access to cities in the U.S. and Canada via American’s key hubs in Miami, New York, Dallas/Fort Worth and Los Angeles. LATAM’s hubs in Sao Paulo, Santiago, Brasilia, Lima and Bogota will give American customers enhanced network connectivity to cities in South America. In addition, it is anticipated that if approved, this JB will create opportunities for new direct service to currently underserved destinations and additional frequencies on existing routes. (Original Source)

Shares of American Airlines closed today at $40.55, up $0.45 or 1.12%. AAL has a 1-year high of $56.20 and a 1-year low of $34.10. The stock’s 50-day moving average is $42.48 and its 200-day moving average is $42.01.

On the ratings front, AAL has been the subject of a number of recent research reports. In a report issued on January 7, Credit Suisse analyst Julie Yates upgraded AAL to Buy, with a price target of $57, which implies an upside of 41.8% from current levels. Separately, on December 21, Deutsche Bank’s Michael Linenberg maintained a Buy rating on the stock and has a price target of $55.

According to, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Julie Yates and Michael Linenberg have a total average return of 4.1% and 18.7% respectively. Yates has a success rate of 50.0% and is ranked #920 out of 3585 analysts, while Linenberg has a success rate of 53.7% and is ranked #68.

The street is mostly Bullish on AAL stock. Out of 4 analysts who cover the stock, 3 suggest a Buy rating and one recommends to Hold the stock. The 12-month average price target assigned to the stock is $56.00, which represents a potential upside of 39% from where the stock is currently trading.

American Airlines Group Inc, through its subsidiaries, operates in the airline industry. The Company has hubs in Charlotte, Chicago, Dallas/Fort Worth, Los Angeles, Miami, New York City, Philadelphia, Phoenix and Washington, D.C.


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