South American airlines to merge
Two of Latin America's largest carriers move to form continent's biggest airline.
Last Modified: 14 Aug 2010 15:53 GMT
If the merger goes ahead, the airlines would have combined revenues of more than $8bn [Reuters] 

Two of South America’s biggest airlines have announced plans to merge in a move that could lead to the birth of the continent's largest carrier.

News of the planned merger, announced on Friday by Chile's LAN and Brazil's TAM, gave boost to the shares of the two companies.

TAM’s shares went up by 30 per cent on the Sao Paulo stock market while LAN's increased nearly eight per cent in Santiago, Chile's capital.

The airlines said in a joint statement that the new airline would be called LATAM Airlines, but the separate TAM and LAN logos would be maintained on aircraft in each country.

The deal, however, must still receive approval from the regulatory authorities and shareholders.

If the merger succeeds, the new airlines would have combined revenues of more than $8bn, and would fly passengers to 115 destinations in 23 countries.

New destinations

The new company would have a combined workforce of 40,000 employees and a total fleet of 241 aircraft.

"Together, LAN and TAM will be able to offer new destinations that neither company could have supported on its own,'' Marco Bologna, CEO of TAM, said.

"This will position us to compete with the foreign carriers that continue to increase service to our region, while creating new jobs in our home countries.''

TAM is Brazil's biggest airline, controlling 43 per cent of the domestic market in Latin America's biggest economy.

LAN, which also has operations in Peru and Argentina, is one of the biggest airlines in Latin America, with a strong network of international routes, which generate more revenue per passenger than domestic flights.

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