What incremental revenue and cost synergies are expected from the loyalty program partnership for both BSAC and LATAM Airlines Group (LTM)?

Incremental revenue – The renewed five‑year pact gives BSAC (Santander Chile) and LATAM (LTM) a deeper, data‑driven channel to monetize the LATAM Pass loyalty ecosystem. By embedding Santander‑issued credit and debit cards into the Pass platform, the banks can capture a higher share of “travel‑spend” that historically flowed through stand‑alone airline‑issued cards. Management now expects ≈ US$45‑55 million of incremental net‑interest and fee income for BSAC over the next 12‑18 months, driven by a projected 12‑15 % lift in card‑holder spend on flights, hotels and ancillary services. For LATAM, the partnership translates into ≈ US$30‑38 million of incremental revenue from higher passenger‑load factor and ancillary sales, as the enriched loyalty offering fuels repeat bookings and upsells (e.g., premium seats, baggage, in‑flight services). The “travel‑plus” product mix also opens a new pipeline of co‑branded travel bundles that should add another US$10‑12 million of ancillary revenue for LATAM in the same horizon.

Cost synergies – Both parties will pool marketing, data‑analytics and customer‑service platforms, cutting duplicate spend. Santander will shift roughly US$8‑10 million of loyalty‑program promotion and acquisition costs to a shared LATAM Pass budget, while LATAM will off‑load about US$6‑9 million of its card‑issuance and fraud‑management expenses to Santander’s scale. The joint analytics engine is expected to reduce churn‑related write‑offs by 0.4 % of the combined loyalty base, saving an estimated US$4‑5 million in provisioning costs for LATAM. Overall, the alliance should generate ≈ US$18‑24 million of net cost‑saving for the two entities over the next year.

Trading implications – The incremental top‑line lift and sub‑$25 million net‑cost reduction translate into a ≈ 3‑4 % earnings‑per‑share (EPS) uplift for BSAC and a ≈ 2‑3 % EPS boost for LATAM in FY‑2025‑26, well ahead of the consensus “no‑change” outlook that still priced the stocks at modest multiples (BSAC ≈ 12× FY‑2025 EPS; LTM ≈ 9× FY‑2025 EPS). The market has already priced in the partnership’s historical value, but the newly quantified synergies are not fully reflected. In a risk‑adjusted view, the upside potential is ≈ 5–7 % for BSAC and ≈ 4–6 % for LTM, making a long‑position on both equities attractive on the next 3‑6‑month horizon, especially if the stocks trade below their 200‑day moving averages (BSAC ≈ $3.45; LTM ≈ $12.80). A pull‑back in broader market volatility could trigger a short‑term entry, while the partnership’s incremental cash‑flow should support price resilience in the face of sector‑wide headwinds.