LATAM Airlines Brasil (JJ, São Paulo Congonhas) has announced it would not renew or extend its existing agreement with loyalty programme Multiplus once it expires at the end of 2024. The airline also said it will seek to purchase the shares currently held by other shareholders and subsequently delist Multiplus from the B3 Novo Mercado stock market in São Paulo.
Multiplus operates LATAM Fidelidade, a legacy loyalty programme inherited by LATAM after the merger with Brazil's TAM Linhas Aéreas (São Paulo Congonhas). The 15-year contract between TAM and Multiplus went into force on January 1, 2010.
LATAM Airlines Group also has a second loyalty programme, LATAM Pass, inherited from Chile's LAN Airlines (Santiago de Chile) and currently covering the group's Spanish-speaking markets. LATAM Pass has 14.7 million subscribers and is owned directly by LATAM.
"In spite of coordinated efforts by LATAM, LATAM Airlines Brasil, and Multiplus, this inherent product strength has not been sufficient to bolster Multiplus’s leadership in the increasingly competitive Brazilian loyalty points market. Despite several amendments to the Contract that have sought to reestablish competitiveness (including, as recently as this year, average reductions of 5% in domestic ticket prices and 2% in international ticket prices offered to Multiplus), Multiplus’s market share has not improved," the group said in a statement.
After the end of the current contract in 2024, LATAM Airlines Brasil intends to manage its loyalty programme in-house.
"In order to minimize transition costs and friction for all stakeholders, LATAM Airlines Group has decided to support LATAM Airlines Brasil in pursuing the complete acquisition of Multiplus," the group added.
LATAM currently controls 72.74% of shares in Multiplus, while the remainder is in a free float. Once the airline takes full control of the firm, it intends to delist it from B3 Novo Mercado.
