LAN of Chile and TAM of Brazil set to merge

16 Aug 2010

The announced merger of leading Latin American airlines, LAN of Chile and TAM of Brazil, may have an impact on their status in Oneworld (LAN) and Star Alliance (TAM), but both companies said it was still too early say what this would be.

Over the weekend, the carriers announced plans to create the Latam Airline Group in a bid to position themselves for future expansion in a fast-developing region.

According to media reports, the two airlines, with combined 2009 revenues of US$8.5 billion, will each retain their own brands but operate under a merged parent company. It will be headed by Enrique Cueto, LAN CEO, who observed that they “were seeing dynamic growth in demand”, adding: “Now is our time to capitalise on this trend.”

Together, they will operate 115 destinations to 23 cities, with a fleet of 220 planes and 40,000 employees. Lan operates in Chile, Peru, Argentina and Ecuador, while TAM operates in Brazil and operates TAM Mercosur, also serving Paraguay.

Growth is expected to come from routes between Brazil and Europe and Africa and from Peru to North and Central America.

The move follows similar ones in the aviation industry, notably the proposed merger of United and Continental Airlines, which has just revealed their new branding identity as United Airlines (see news).

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Margie T Logarta

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