Santiago, Chile, September 5, 2018- LATAM Airlines Group S.A ("LATAM") (NYSE: LTM; IPSA: LTM) today announced that its consolidated affiliate TAM Linhas Aereas S.A. ("LATAM Airlines Brazil"), does not intend to renew or extend its operating agreement (the "Contract") with Multiplus S.A. ("Multiplus"), its loyalty coalition affiliate, after December 31, 2024. Concurrently, 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 (the "Delisting Tender Offer"), and to subsequently de-list Multiplus from the B3 Novo Mercado in Brazil and cancel its registration.

Since the business combination of LAN and TAM in 2012, LATAM Airlines Group’s affiliates have operated two separate and distinct frequent flyer programs.

In Brazil, LATAM Fidelidade (TAM’s legacy program), is operated by Multiplus – a separate, independently managed Brazilian corporation – under the 15-year exclusive Contract signed between TAM Linhas Aereas and Multiplus that has been effective since January 1, 2010. LATAM indirectly holds a 72.7% stake in Multiplus; the remainder floats in the B3 Novo Mercado in Brazil since its 2010 IPO –prior to the business combination of LAN and TAM– under the ticker MPLU3.

Separately, LATAM Pass –the legacy successor to LAN’s LAN Pass program– is the leading frequent flyer program in most of LATAM’s Spanish speaking markets. LATAM Pass is fully owned and operated in-house by LATAM, and currently has 14.7 million subscribers.

In spite of coordinated efforts by LATAM, LATAM Airlines Brazil, 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 re-establish 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, says the airline.

As a result, LATAM Airlines Brazil has notified the Board of Directors of Multiplus that it does not intend to renew or extend the Contract after December 31, 2024. In the future, LATAM Airlines Brazil intends to manage its frequent flyer program in-house, protecting the airline’s passenger yields and gaining full flexibility in the management of its revenue strategy.

In this context, in order to minimize transition costs and friction for all stakeholders, LATAM Airlines Group has decided to support LATAM Airlines Brazil in pursuing the complete acquisition of Multiplus. LATAM Airlines Group and LATAM Airlines Brazil say that they believe that this is the most viable solution to Multiplus’s current challenges (which would be exacerbated after the end of the Contract) and minimizes the impact on Multiplus’s minority shareholders. Furthermore, this transaction allows LATAM Airlines Brazil to enhance benefits to all passengers of LATAM Airlines Group.

The frequent flyer program is a strategic asset for the airline group, and a core source of value that differentiates LATAM from other carriers. The acquisition of Multiplus and its full integration into LATAM’s network will, together with LATAM Pass, create what LATAM estimates will be the fourth largest frequent flyer and loyalty program in the world (measured by member base), and will cement the LATAM Group’s relationship with 21.1 million members at Multiplus. Multiplus members’ points and redemption benefits will remain intact, and Multiplus's commercial partners will benefit from enhanced customer acquisition, retention and share of wallet.

This transaction is expected to yield significant benefits to LATAM Airlines Brazil and LATAM, including efficiency synergies, incremental passenger revenue, value generation from CRM and data analytics, strengthened brand consistency and positioning, as well as an improved, simplified experience for Multiplus members.

LATAM Airline Brazil’s decision is consistent with recent transactions in the industry, and with the strategy of in-house frequent flyer business models of the largest global airlines, including LATAM’s oneworld partners.