Brazilian airline TAM plans to merge with Chile’s LAN

Two major South American airlines are
planning to merge and create the biggest carrier in the region.

Brazil’s largest airline TAM Linhas
Aereas is looking to join with Chile’s LAN as demand for air travel in Latin
America continues to grow.

TAM said a combined airline would fly to
115 destinations in 23 countries, with a 40,000-strong workforce.

LAN confirmed the agreement, which it
said was non-binding. The new carrier would be called Latam Airlines Group.

If the tie-up goes ahead it would be
headed by LAN boss Enrique Cueto while TAM deputy chairman Mauricio Rolim would
be company chairman.

However, as was the case with the Air
France-KLM merger in Europe, the airlines’ brands would remain separate.

The new company would be created from an
all-share transaction.

At close of trade on Friday TAM shares
had risen by 27.6% and those of LAN by 7.7%.

TAM is a member of the Star Alliance
group of airlines, which includes BMI, Lufthansa, SAS and Air China.

Meanwhile LAN is a member of the
Oneworld airline alliance, which includes Iberia, British Airways, Qantas and
JAL.

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