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7JetSet7 Code: TPR
Status: Operational
Country: BRAZIL
Employees 51000
Web: tam.com.br
Email: tamimprensa@tam.com.br
Telephone: +55 11 5033 2146
Fax: +55 11 50711080

Click below for data links:
TPR-2015-02 - A321 HAIL STRIKE.jpg
TPR-2015-09 - Top 12 INTNL Airlines Brazil.jpg
TPR-2016-01 - Sao Paulo to Bogota.jpg
TPR-2016-04 - New LATAM Livery 787-9.jpg
TPR-2016-08 - 1st A320neo Delivery.jpg
TPR-Cabin Attendants - 2015-09.jpg
TPR-LOGO - 2014-08




JANUARY 1997: 1996 = +$60 MILLION (NET PROFIT).















MAY 1998: 3 F 100'S (11512; 11517; 11527), EX-MERPATI (PNM), DEBIS AIRFINANCE (DEA) LEASED.

SEPTEMBER 1998: 2 F 100'S (11383; 11389), EX-CHINA EASTERN AIRLINES (CEA).


8 ORDERS F 100'S (11394; 11401; 11409; 11421; 11423; 11429; 11430; 11431), EX-CHINA EASTERN AIRLINES (CEA).



DECEMBER 1998: TO MIAMI (MIA) (A330-200) & TO PARIS IN 4/99.

A330-223 (PW4068A) (247) DELIVERY.

JANUARY 1999: F 100 (11301), (GPA) LEASED.









2 F 100'S (11409, PT-MQN; 11423, PT-MQO) DELIVERIES.

1 AMERICAN EAGLE 10.67; 2 COMAIR (COI) 6.17 (+16.5%); 3 CONTINENTAL
EXPRESS 5.64 (+15.6%); 4 SKYWEST 4.51 (+55.4%); 5 CROSSAIR (CSR) 4.43 (+19%); 6 KLM UK (UKL) 4.41 (+1.7%); 7 (DLH) CITYLINE 4.40 (+13.3%); 8 UNI AIRWAYS (MAK) 4.23 (+89.7%); 9 CANADIAN REGIONAL 4.19 (+23.1%); 10 HORIZON 4.09 (+18.2%); 11 MESABA 4.05 (+26.5%); 12 AIR CANADA
CONNECTOR 4.04 (+12.1%); 13 ATLANTIC SOUTHEAST 4.03 (+6.7%); 14 TAM LINHAS AEREAS (TPR) 3.94 (+17.9%); 15 MESA 3.39 (-22.5%).

JUNE 1999: A330-223 (259, PT-MVD) DELIVERY.



1 F 100 (11264), EX-SEMPATI (SEM), (GEH) LEASED.


SOLD 3 F 27-500'S (10341; 11632; 11640; TO FARNAIR EUROPE (TUL). 2 F 100'S (11421, PT-MQR; 11431, PT-MQS) DELIVERIES.

OCTOBER 1999: F 100 (11429, PT-MQT) DELIVERY.


A319 (V2524-A5) DELIVERY.


3RD Q = +$5.4M (+$171K) (NET PROFIT).

A319-132 (1139, PT-HZF) DELIVERY. 4 F 50'S (20182; 20192; 20202; 20210) RETURNED TO DASA.


2 A320-200'S DELIVERIES (V2500), 12C, 138Y PAX. 2 A319-132'S (1143, PT-MZG; 1158, PT-MZH) DELIVERIES.


APRIL 2000: 1999 = -$17.2M (+$6.3M).








(TAM) MERCOSUR (LAP) 1999 = 216M RPK (PASSENGER TRAFFIC) (-12.6%); 49.7% LF (LOAF FACTOR); 195K PASSENGERS (PAX) (-12.2%); 70 EMPLOYEES -$16.5M.

AUGUST 2000: 2 A320-232'S (1246, PT-MZI; 1251, PT-MZJ) DELIVERIES.


OCTOBER 2000: 2 F 100'S (11326, PT-MQV; PT-MQW), FOKKER LEASED.

NOVEMBER 2000: 1 A330-223 (361, PT-MVE) DELIVERY. 2 F 100'S (11326, PT-MQV; 11332, PT-MQW), DELIVERIES.








2 A320-232'S (1368, PT-MZK; 1376, PT-MZL) DELIVERIES.


1 F 50 (20254) RETURNED TO LESSOR.

MAY 2001: IN 11/01, TO MILAN.

2 A330-243'S (287; 334) & 1 A320-231 (243, PT-MZP), (GAX) LEASED.


1 A320-232 (1486, PT-MZT) DELIVERY. 1 A320-232 (V2500) (453), EX-AMERICA WEST (AMW), CIT AEROSPACE (TCI) LEASED. PARIS AIR SHOW, 30 ORDERS A318'S, & 20/80 ORDERS ERJ190-200'S, TO REPLACE 50 F 100'S (2/04).




1 A320-231 (335, PT-MZQ), EX-SOUTH AFRICAN AIRWAYS (SAA). 1 A320-232 (1518, PT-MZU) DELIVERY.


1 A320-200 (V2500) (758), EX-QATAR AIRWAYS (QTA), SALE (SIL) LEASED. 4 F 100'S, EX-AIR LIBERTE (ALB).




OCTOBER 2001: 1ST OF 5 A320-232'S (V2527), 12F, 150Y (1580, PT-MZW) DELIVERIES. +1 ORDER (2/03) A320.

NOVEMBER 2001: 3 A320-232'S (1593, PT-MZZ; 1595, PR-MAA; 1613, PT-MZX) DELIVERIES.

DECEMBER 2001: 1 A320-232 (1628, PT-MZY) DELIVERY.




MARCH 2002: IN 1/02, INTERNATIONAL MARKET SHARE: (VAR) 81.2%; (TPR) 18.8%; DOMESTIC MARKET SHARE: (VAR) 38.8%; (TPR) 37.4%; (GOT) 8.3%.

(TELEPHONE: (11) 55 82 88 22). (FAX: (11) 55 82 83 21).


APRIL 2002: 2001 = -$21.8M (+$242M). 5,590 EMPLOYEES.

(TELEPHONE: +55 (11) 5582 8675). (FAX: +55 (11) 5581 9671)

MAY 2002: 1ST Q = +#15M REAIS (-#100M REAIS).

1 A319-132 (1703, PR-MAI), DELIVERY.

July 2002: 2001 = -$23.99M (+$295K): 11.26B RPK (+33%); 54.5% LF; 13.03M PAX (+25.1%); 2.68M FTK (+34.4%); 7,994 EMPLOYEES (+36.3%).

2 A330-203'S (466, PT-MVF; 472, PT-MVG), 7F; 46C; 175Y, to replace 2 A330-243's (PT-MSD; PT-MSE), GECAS (GEF) leased. +2 A330-203'S (477, PT-MVH; 486, PT-MVK) deliveries.

August 2002: INCDT: F 100 (11512, PT-MQH), suffered fuel exhaustion, and was forced to make an emergency landing on farmland, near Aracatuba, Birigui. The airplane sustained substantial damage and was written-off (W/O). All 5/24 were OK and not injured.

INCDT: F 100 (11441, PT-MRL), a few hours later after the above incident, this airplane had a hydraulics probelm and was unable to lower the undercarriage. The flight diverted to Campinas and made an emergency, gear-up landing on a foamed runway. The airplane was substantially damaged. All 5/42 were OK and not injured.

Following these incidents, Tam Linhas Aereas (TPR) said it would return 21 of the 50 F 100's it operates to leasing companies, and eliminate service to 9 mid-sized Brazilian cities in an effort to reduce costs.

1 order (11/02) A320-200, SALE (SIL) leased. Also sold to (SIL) and leased back A320-232 (1818).

September 2002: 1st 6 months = -# 223.1M REAIS/$69.4M (-# 197 REAIS/-$62M). Will lay off -500 employees (-6%), and "temporarily" cut -12% of its capacity in response to weak demand, and end service to 7 destinations.

1 A319-132 (1801, PR-MAL); & 2 A320-232's (1832, PR-MAG; 1825, PR-MAK) deliveries.

September 2002: 2 A330-242's (287, 334), returned to Gulf Air (GUL). To return 21 F 100's to lessors.

October 2002: Buenos Aires to Sao Paulo, to code share with (KLM), to the Netherlands.

November 2002: Domestic Market share: 1 (VAR) 40.34%; 2 (TPR) 32.4%; 3 (GOT) 14.82% (+3.83%); 4 (VSP) 10.97% (-1.3%).

Contract with Air France Industries (AFA) for component maintenance for its Airbus fleet. In a related transaction, Tam Linhas Aereas (TPR) has a $13 Million deal with (AFA) Industries to transform its Technical Center in Sao Carlos into a major 3rd-party component maintenance and repair station for Boeing, Airbus, and Fokker airplanes.

2 A319-132's (1826, PR-MAM; 1831, PR-MAN) deliveries.

December 2002: A319-132's (1837, PR-MAO; 1855, PR-MAQ), deliveries; 1 A320-232 (1857, PR-MAP), CIT (TCI) leased; & 1 A320-232 (1888, PR-MAR), SALE (SIL) leased. F 100 (11422) returned to lessor.

January 2003: Domestic market share for month: VAR 35.91% (+.2); TPR 32.94% (-4.52); GOT 16.66% (+8.26); VSP 13.27% (-.82).

February 2003: Aided by the Brazilian government, struggling airlines Varig (VAR) and TAM (TPR), signed a "protocol of understanding" intending to combine services to form a new airline within 6 months, under an agreement reached between the two parties. The carriers did not go so far as to state that the deal will result in a full-fledged operational integration, but did say they will create a new publicly traded holding company, with private control shared among the partners. (TPR) is expected to post a -$173M loss for 2002. The combined carrier would operate 218 airplanes and employ 26,000. With (VAR), will reduce flights on key domestic routes by close to 30% under a new code share deal.

2 F 100's (11443; 51), returned to lessor.

March 2003: Code share with Varig (VAR)), Sao Paulo (Congonhas) and Rio de Janeiro (SDU) to Curitiba, Florianapolis, Pampulha, Porto Alegre, and Vitoria, reducing flts by 30%. On the Rio de Janeiro to Sao Paulo "air bridge" (VAR) and (TPR) will reduce flights from 66 to 42.

2002 = -$180 Million (-$16 Million) (net loss). Will lay off -450 employees (-6%).

2 A330-223's (232; 238) wet-leased 3 years to China Airlines (CHI) for flights to Australia, Hong Kong, and Italy.

July 2003: Varig (VAR) has delayed its merger with TAM (TPR) following a dispute over maintenance facilities. Varig (VAR)'s majority shareholder FRBPar wants the Engineering & Maintenance division spun off into a separate entity.

August 2003: Merger plans between TAM (TPR) and Varig (VAR) hit an unexpected bump with the surprise resignation of Daniel Mandelli Martin, (CEO), reportedly owing to a conflict with the airline's majority shareholder (70%), Noemy Amaro, widow of (TPR)'s late (CEO), Rolim Amaro. Martin is married to Rolim's sister, Lesy.

September 2003: 2002 = -$200.1 Million (-$24 Million) (net loss): 12.08 Billion (RPK) passenger traffic (+7.2%); +6.5% (ASK) capacity; 54.8% LF load factor (+.4); 13.8 Million passengers (PAX) (+5.6%); 7,624 employees (-4.6%).

46 (THY) 16.59; 47 (ATZ) 16.30; 48 (LTU) 16.10; 49 (JAA) 15.90; 50 (HAP) 14.40; 51 (JMA) 13.97; 52 (PAL) 13.52; 53 (AMX) 13.31; 54 (AIN) 13.25; 55 (FIN) 12.79; 56 (BER) 12.73; 57 (ELA) 12.54; 58 (TPR) 12.08; 59 (MON) 11.86; 60 (GUL) 11.84; 61 (CMA) 11.74; 62 (COR) 11.47.

Wet-leases 2 A330-223's (232; 238) to South African Airways (SAA) for flights to Paris and Zurich. Also, will wet-lease 2 A330-200's to Etihad Airways (EHD), a Middle-East start-up, for 3 months including flight attendants (CA).

December 2003: 2 F 100's (11383, CX-UAA; 11389, CX-UAB), leased to U Air.

January 2004: 4th Quarter = +BLR 86.1 Million/+$29.3 Million. 2003 = +BRL 173.8 Million/+$59.1 Million (-BLR 605.7 Million/-$206 Million).

February 2004: Requested Brazilian government to defer its merger with Varig (VAR) for 2 years.

To lease 2 A330-200's to Iberia Airlines (IBE) for 2 years in June. 4 F 100's (11296; 11441; 11473; 11290) returned to lessor in 2003.

March 2004: Marco Antonio Bologna, President, 48.

April 2004: 7,624 employees.

June 2004: F 100 (11441) to be displayed at a museum at Sao Carlos. A330-223 (232; 238) returned from South African (SAA), wet-leased to Etihad (EHD).

July 2004: 2003 = +$56.52 Million (-$207.07 Million): 10.92 Bilion (RPK) (-9.6%); 60.6% LF; 11.2 Million (PAX) (-18.6%); 890.94 Milliion (FTK) (-10.7%).

2 F 100's (11326; 11527) returned.

August 2004: Exercised options on 10 A320's and will option +10.

F 100 (11351) returned to lessor.

September 2004: 2 F 100's (11322; 11350) returned to lessor.

October 2004: Next month, Sao Paulo, Rio de Janeiro - Santiago.

November 2004: TAM (TPR) has added route to Campo Grande - Corumba at the request of the government of Matto Grosso do Sul. The route was dropped by Vasp (VSP) last month.

2 F 100's (11301; 11505) returned to lessor.

December 2004: Santiago - Sao Paulo - Rio de Janeiro.

F 100 (11322) to GIRjet.

March 2005: 2 A320-232's (V2500) (2372, PR-MAS; 2393, PR-MAT), Boullioun (BOU) medium-term leased.

June 2005: TAM Linhas Aereas (TPR) is a regional airline arm of the TAM Group, providing scheduled services from Sao Paulo-Guarulhos to major points within Brazil, as well as international flights to neighboring countries, to Miami in the USA, and to Europe.

7,374 employees (+16.9%).

(IATA) Code: JJ - 957. (ICAO) Code: BLC (Callsign - TAM).

Parent organization/shareholders: Amaro family (69%); Bank Garantia Funds (22%); & others (7%).

Owns: ARPA (100%); & Transportes Aereos del Mercosul (80%).

Alliances: Air France (AFA); American Airlines (AAL); (KLM); Pantanal Linhas Aereas; TAM Aereos del Mercosul (LAP); U Air; & Varig (VAR).

Domestic, Scheduled Destinations: Aracaju; Belem; Belo Horizonte; Brasilia; Campinas; Campo Grande; Corumba; Cuiaba; Curitiba; Florianapolis; Fortaleza; Goiania; Iguassu Falls; Ilheus; Imperatriz; Joao Pessoa; Londrina; Macapa; Maceio; Manaus; Maraba; Natal; Navegantes; Palmas; Porto Alegre; Porto Seguro; Porto Velho; Recife; Ribeirao Preto; Rio de Janeiro; Salvador; Santarem; Sao Jose do Rio Preto; Sao Luiz; Sao Paulo; Teresina; Uberlandia; Una; & Vitoria.

International, Scheduled Destinations: Buenos Aires; Chicago; Miami; Paris; & Santiago.

Recently completed a successful Initial Public Offering (IPO), raising $220 Million and signaling the dramatic recovery of the carrier.

At Paris Air Show, $2.6 Billion, 20/20 orders (2007-02) A320's and (MOU) 8/7 (11/12) orders A350-900's (GEnx).

5 F 100's (11320, F-OLLG; 11341, F-OLLN; 11470, F-OLLP; 11472, F-OLLQ; 11473, F-OLLR) sold to TAT Industries.

August 2005: A320-232 (2513, PR-MAZ), delivery. F 100's (11516; 11518), returned to lessor.

September 2005: TAM (TPR) will launch nonstop service from Sao Paulo to New York (JFK) four times per week from November using an A330-200. It will operate from Terminal 4 at (JFK).

3 F 100's (11511; 11516; 11518), sold to Chabahar Airlines.

October 2005: Airbus (EDS) received formal approval from its shareholders, (EADS) and BAE Systems for industrial launch of the A350 on the basis of 140 "firm order commitments" from nine customers, one of which is unidentified. In Washington, Airbus (COO) Charles Champion said the company is "confident" it will reach 200 commitments by year end, while Executive VP Procurement, Henri Courpron said that all 200 will be firmed within the same timeframe.

As previously announced, the airplane will be offered in two versions, the A350-800 seating 258 in a three-class configuration with a range of 8,800 nm and A350-900 seating 316 with a range of 7,500 nm. The A350-800 will enter service in mid-2010 while the larger A350-900 arrives later in the year.

Also, Rolls-Royce (RRC) announced that it finally had reached agreement with Airbus (EDS) to supply a new variant of its (Trent) engine series for the A350. The (Trent 1700) will be available for A350 deliveries from mid-2011. The airframe will launch with a version of the (GEnx). To date, (GEC) has captured all firm orders from identified customers, a total of 130 shipsets, plus 32 options.

Courpron said the delay in bringing Rolls (RRC) into the program was owing to both technical and commercial considerations: "We wanted to make sure we knew what Rolls (RRC) had to offer." Implying that the delay was partly due to (RRC)'s negotiating position, he said "it was not a coincidence" that (RRC) came aboard at virtually the same time Airbus (EDS) received authorization to build the jet. "We felt very comfortable going the whole way with just GE," he added. "We sold 140 of them without Rolls (RRC)."

The current customer list comprises Air Europa (ARE) (10), ALAFCO (12), CIT (TCI) (5), GECAS (GEF) (10), Kingfisher Airlines (KFH) (5), Qatar Airways (QTA) (60), TAM (TPR) (8), US Airways (USA) (20) and an unidentified customer (10).

The (Trent 1700) will offer a thrust rating of 75,000 lb and will run for the first time in mid-2009. The four-digit nomenclature is a departure for Rolls (RRC). A spokesperson told this website that the "1700" is a reference to the mid-70,000-lb thrust rating, not an homage to the Trent 700 that powers the A350's closest sibling, the A330.

"We have strong, market-leading or sole-source positions with the (Trent) on the A330, latest A340s and the A380, and we are equally confident that the (Trent 1700) will establish itself successfully on the A350," (RRC) President Civil Aerospace, Mike Terrett said.

A320-232 (2602, PT-MAX) delivery and A330-203 (700, PT-MVL), (GEF) leased.

November 2005: TAM (TPR) inaugurated service on the Rio - Sao - New York (JFK) route and now operates 4 flights a week using an A330-200.

December 2005: AirFrance (AFA) and TAM (TPR) signed an agreement this week to develop jointly Sao Paulo and Rio de Janeiro as connecting hubs to Brazilian and Latin American destinations on TAM (TPR)'s network. The accord covers an increase in frequencies from seven to 10 per week from Paris (CDG) to Sao Paulo and daily flights to Rio de Janeiro, with onward connections to 10 Brazilian destinations via Sao Paulo and seven through Rio. (TPR) will offer passengers departing from Brazil flights to eight French cities via (AFA)'s (CDG) hub.

TAM Brazilian Airlines (TPR) announced it selected the (CFM56-5B) to power 25 new A320s. The deal is worth $300 million at list prices, according to a (CFMI) spokesperson. (TPR) placed an order for 20 A320s plus 20 options at this year's Paris Air Show, at which time it had a backlog of 10 A320s. It will begin taking delivery of its 25 new A320s in 2007 and still holds the 20 options.

(TPR) also announced a 15-year OnPointSM Solutions service agreement with GE Aviation Services (GEC) for (CFM56-5B) Maintenance Repair & Overhaul (MRO) and a seven-year agreement covering 12 (CF6-80E)s powering its A330s.

(TPR) confirmed its A350-900 order announced at the Paris Air Show, increasing the number of firm orders to 10 from eight and decreasing the number of options to five from seven. Deliveries of the three-class airplanes will begin near the end of 2012. "The A350 is the ideal solution for our long-haul network development," (TPR) President, Marco Bologna said. The airline will be the A350's launch customer in Latin America. It already is the region's largest Airbus (EDS) operator.

January 2006: TAM Brazilian Airlines (TPR) selected the (GEnx) to power the 10 A350-900s it ordered last month. Delivery of the airplanes will begin in 2012.

A320-232 (2661, PR-MAY), CIT Group (TCI) leased.

February 2006: TAM (TPR) will operate special flights from 3 Brazilian cities to Miami this coming July and could possibly start regular service from these airports. The routes/dates are:
Fortaleza - Miami on July 1;
Miami - Fortaleza on July 14;
Natal - Miami on July 8;
Miami - Natal on July 20;
Recife - Miami on July 7, 14, & 15;
Miami - Recife on July 21, 28, & 29.
Each of these flights will operate with an A330 which originates and terminates in Sao Paulo.

March 2006: TAM (TPR) raised nearly BRL1.5 billion/$689.8 million through stock issues on both the Bovespa exchange in Brazil and the New York Stock Exchange, according to press reports.

(TPR) released more details about last week's global Initial Public Offering (IPO) in New York and Sao Paulo that netted the Brazilian carrier close to R$1.5 billion/$706.3 million, which will be used "entirely to finance its activities," the company said. Fleet renewal and expansion, through purchase and lease, will consume 80% of the proceeds. TAM (TPR) currently operates 59 A319s/A320s, eight A330s and 18 Fokker RJs. It has 29 additional A320s under firm order and expects to take delivery of 11 through 2009. The remaining 20% of equity funding will be used for working capital.

(TPR) sold 5 million new preference shares and existing owners sold 30.6 million shares. There is an overallotment provision for up to 15% of the total American Depositary Shares offered on the New York Stock Exchange (NYSE). The (IPO) was coordinated by Credit Suisse and Pactual Capital Corp. Merrill Lynch was the joint lead manager.

(TPR)'s 2005 net income fell -45.1% to +R$187 million. Revenues climbed +25% to R$5.65 billion and expenses rose +23.6% to R$5.22 billion. The profit decrease was owing to an accounting change reflecting removal of airplane lease contracts from the balance sheet. Minus that alteration, which occurred in the fourth quarter of 2004, the 2005 profit rose +73.1% while operating profit increased +44.4% to +R$426 million.

(TPR)'s arrival on the (NYSE) preceded by a few days the announcement that it will increase its four-times-weekly service to New York (JFK) to daily beginning May 30. Flights aboard A330-200s will leave Rio de Janeiro Galeao and stop at Sao Paulo Guarulhos before heading north. (TPR) said it is aiming "at selective expansion in the international market."

(TPR) will inaugurate direct service from Fortaleza to Miami via Belem and Manaus on June 1st and will operate a daily flight using an A320.

April 2006: TAM (TPR) closed its preferred shares, initial public offering (IPO) after distributing 37.1 million shares and raising BRL1.56 billion/$724.7 million. (TPR) said 54.7% of its capital now is held by TAM Empreendimentos e Participacoes SA and Aerosystem SA, with the remainder held by minority shareholders.

(TPR) received authorization from Brazil's National Civil Aviation Agency to operate seven weekly flights to London, its second European destination after Paris. It will announce service details "in the following months." (TPR) also received permission to increase capacity to Argentina by 172,166 seats per year. It currently operates six daily flights to Buenos Aires. The carrier further announced it will launch daily nonstop service to New York, aboard A330-200s from May 30 and daily Manaus - Miami service using A320s from June 1.

Brazilian low-cost carrier, Gol (GOT) likely will emerge a much more significant force in the domestic market owing to Varig (VAR)'s financial problems, according to a new report from JP Morgan forecasting that (VAR) will reduce domestic flying 50% - 100% within the year. JP Morgan's Jamie Baker pins the probability that (VAR) will downsize at 70%, but says a 20% probability exists that the airline will close its doors for good. (VAR)'s capacity share of the domestic market is estimated at close to 20% currently, with (GOT) having 26%, (TPR) around 43% and other operators 11%. Were (VAR) to cease operating, Baker estimates that the market could absorb around 80% of the displaced capacity, boosting (TPR)'s share to 53% and (GOT)'s to 43%.

A320-232 (2734, PR-MBA), Boullioun (BOU) leased and A320-232 (2737, PR-MBB), CIT Group (TCI) leased.

May 2006: TAM (TPR) becomes the 4th Latin American airline to list on New York's stock exchange.

A320-232 (2783, PR-MBC), SALE (SIL) leased.

June 2006: TAM (TPR) flew 1.49 billion domestic (RPK)s passenger traffic in May, a +33% increase over the year-ago month. Capacity climbed +20.3% to 2.03 billion (ASK)s and load factor rose +7 points to 73.4% LF. International traffic grew +45.8% to 461 million (RPK)s against a +28.2% increase to 623 million (ASK)s. Load factor improved +8.9 points to 73.9% LF.

(TPR) will inaugurate nonstop service from Sao Paulo Guarulhos to London Heathrow on October 28th and will operate a daily flight using an A330-200.

(TPR) signed an agreement with Boeing that will allow the carrier to have access to documents, standards and technical handbooks regarding the manufacturer's maintenance of components and airplanes with the intention of getting certified by Brazil's civil aviation authority to provide Maintenance Repair & Overhaul (MRO) services on Boeing airplanes at its Sao Carlos technical center.

(TPR) signed a Memo of Understanding (MOU) with Airbus (EDS) to acquire 37 airplanes, boosting both (EDS)'s flagging fortunes and the airline's hopes for domestic dominance as Varig (VAR) lingers on the verge of shutdown. The order comprises 15 A319s, 16 A320s and six A330s to be delivered through 2010. Last year, (TPR) ordered 29 A320s for delivery in the same time frame, plus 20 options. The announcement comes on the heels of a March Initial Public Offering (IPO), that netted the airline approximately $700 million, which it said it would funnel mainly into fleet renewal and expansion.

"The decision is aligned with our proposal to be a low-cost company with differentiated services and competitive prices," (TPR) (CEO), Marco Antonio Bologna said. "The increase in traffic density justifies that we operate larger airplanes, which will also result in a lower [unit cost]." In the first five months of 2006, the carrier posted +21.2% year-over-year growth on its domestic services.

(TPR) expects to be operating 41 A320s, 13 A319s, 22 F 100s and 10 A330s by year end. It will phase out the F 100s by 2010, at which time, it will fly 111 A319s/A320s and 16 A330s.

July 2006: TAM (TPR) will begin service on the following domestic routes on July 17th:
Sao (GRU) - Maceio (Daily);
Sao (GRU) - Manaus - Porto Velho (Daily);
Sao (GRU) - Brasilia - Goiania - Sao (CGH) (Daily);
Rio - Brasilia - Manaus - Boa Vista (Mondays - Saturdays);
Boa Vista - Manaus - Brasilia (Saturdays);
Brasilia - Manaus - Boa Vista (Sundays);
Boa Vista - Manaus - Brasilia - Rio (Sundays - Fridays).

(TPR) will begin daily Sao Paulo Guarulhos (GRU) - London Heathrow service on October 28 with an A330-200. It is (TPR)'s second European destination after Paris Charles de Gaulle. (TPR) launched the following daily routes: (GRU) - Brasilia - Goiania - Congonhas and Rio de Janeiro Galeo - Brasilia - Manaus - Boa Vista. TAM Mercosur, based in Paraguay, started twice-daily flights from GIG to Asuncion (via GRU) and Buenos Aires.

(TPR) and AirFrance (AFA) strengthened their code share agreement to include six new Brazilian destinations.

(TPR) filed a request with Brazilian regulators to sell BRL500 million/$228.4 million worth of debentures.

A320-232 (2838, PR-MBD) delivery.

August 2006: TAM (TPR) notified Brazilian authorities it would no longer honor Varig (VAR) tickets on international flights. (VAR) reportedly owes (TPR) $1.5 million.

(TPR) announced that it will retake three A330s over the next two months that it had subleased to an undisclosed Middle East airline. The airplanes will be reintegrated into (TPR)'s fleet for intercontinental flights, which could provide a further increase in international operations. While known as the leading domestic carrier in Brazil, it nearly doubled its international market share among Brazilian airlines to 30% in the second quarter from 16.6% in the year-ago quarter. It expects its fleet to reach 96 airplanes by the end of 2006 and 107 by the end of 2007.

(TPR) took delivery of an A320, the eighth of the type delivered to it this year, and the 89th airplane in its fleet.

A320-232 (2859, PR-MBE), delivery.

September 2006: TAM (TPR) concluded the public distribution of R$500 million/231.3 million worth of nonconvertible debentures. The three banks coordinating the operation, the first public offer of debentures of an airline company in Brazil, reported that the 50,000 debentures offered were subscribed and integrated by a total of 140 investors. "The purpose of the issue is to use the resources to finance airplane components for future fleet expansion," TAM (TPR) said. "As previously announced, the expectation is to end 2006 with at least 96 airplanes, reaching 127 airplanes at the end of 2010."

A320-232 (2896, PR-MBF), delivery.

October 2006: TAM (TPR) will inaugurate nonstop service from Minas Gerais to Buenos Aires Ezeiza on October 18th. The airline will operate a daily flight using an A320.

(TPR) will double the frequency of flights on its Sao Paulo Guarulhos to New York (JFK) route from December 15th. In addition to the daily evening overnight flight departure from both cities, the airline will add a morning day flight departure, both using A330-200s.

(TPR) will double the frequency on its Sao Paulo Guarulhos to Santiago service from 1 to 2 flights a day from January 2nd. In addition to the daily morning A330 departure from Sao, the airline will add a new late evening A320 departure. This new flight will originate from Rio de Janeiro's Galeao Airport.

(TPR) will inaugurate nonstop service from Rio de Janeiro to Paris (CDG) on January 12th and will operate a daily flight using its A330s. As a result, (TPR) will have 3 daily flights into (CDG) Airport, including 2 a day from Sao Paulo; 13 of those are nonstop and 1, on Fridays, makes a stopover in Recife.

(TPR) took back an A330 subleased to an unnamed Middle East airline and will use it on routes from Brazil to London Heathrow. (TPR) now operates 10 A330s.

2 A320-232's (2904, PR-MBH; 2924, PR-MHA), deliveries.

November 2006: Third-quarter expenses climbed +26% to BRL1.73 billion, including a +30.2% jump in fuel costs to BRL601.5 million, and operating income more than doubled to BRL349.7 million from BRL169.9 million in the year-ago quarter.

Brazil's largest airline, TAM (TPR) reported that it more than doubled its third-quarter net profit to +BRL212.7 million/+$99.2 million from +BRL93.3 million in the year-ago quarter on a +34.8% jump in revenues to BRL2.08 billion.

(TPR) received the official authorization yesterday from the National Civil Aviation Agency (ANAC) to initiate regular daily flights to Italy. The Brazilian airline is planning to announce service to Milan shortly to begin in the first half of 2007.

The airlines of Latin America and the Caribbean region are enjoying strong traffic demand and face a bright future, Merrill Lynch airline analyst, Michael Linenberg told attendees at the third annual Latin American Airlines Leaders Forum sponsored by Asociacion Latinoamericana de Transporte Aereo (ALTA) in Cancun.

"The [stock] market has recognized opportunities in Latin America," Linenberg said, pointing to the successful Initial Public Offerings (IPO)s of Copa Airlines (COP), Gol (GOT), (LAN) Airlines and TAM (TPR) over the past decade and the strong stock performance. He noted that Latin American traffic growth, at +6.9% per year, "is second only to China," while +4% (GDP) growth for the region is slightly ahead of the world average.

He compared the situation to the one USA airlines enjoyed in the 1960s, a period he described as "the golden era" of the USA airline industry, with strong growth matched by strong profitability. Airline equities "were the tech stocks" of the period, he said.

Also at the conference, (ALTA) Chairman & Copa Airlines (COP) (CEO), Pedro Heilbron noted that while the Latin America/Caribbean region generates just 4.9% of world airline passengers, its population is 9.2% of the world total, suggesting ample room for additional growth. Traffic growth has exceeded +12% in each of the past two years, and although it was down nearly -1% through the first nine months of 2006, this was owing to Varig (VAR)'s downsizing. Excluding (VAR), growth would be around +9%. Domestic traffic represents 67% of the total, with intra-region traffic accounting for 16%.

Among the challenges facing the region's airlines is improving safety, which (ALTA) is addressing by mandating that members pass an (IATA) Operational Safety Audit. Fuel costs also are an issue. Carriers pay an average of +15% more for their fuel than those in North America and Europe, Heilbron said. Airport and air navigation charges also are a concern.

Nevertheless, air transport in the region "is a growing industry at a rate above other parts of the world," he concluded. (ALTA) has more than doubled its membership since 2003, growing from 15 airlines to 33, Executive Director Alex, de Gunten said.

(TPR) has changed its approach to ticketing, launching a new "fare profiles" system yesterday that will allow passengers to purchase tickets based on specific needs. For flights to Brazilian destinations, passengers "will be able to choose promotional prices or other benefits pertaining to a given profile," the carrier said in a statement. Each of the five profiles (Promo, Light, Flex, Max and Top) presents "clear characteristics and rules" from which customers can choose. Variables include change/cancellation fees, discounts for children and loyalty points.

"We are applying a modern system, that will allow us to attend to passengers more clearly, assuring an appropriate product for the needs and demands for each of our customers' trips," (TPR) (CEO), Marco Antonio Bologna said. "It is a way to further personalize our services." The airline said it conducted surveys in several Brazilian airports "to understand the specific needs of different travelers." Added Bologna: "The customer, the passenger, will choose the fare that corresponds to his/her needs at the time."

(TPR) said that it placed a firm order for four 777-300ERs, the first Boeing jets it has ever purchased, and will take delivery of the airplanes in mid-2008.

(TPR), which continues to benefit from downsizing at Varig (VAR), said the airplane order, valued at $1 billion, signaled its "future growth in the long-haul international market." It also marked a departure from a fleet strategy that heavily favored Airbus (EDS). (TPR) is Airbus's biggest Latin American customer, operating 10 A330-200s, 45 A320s and 13 A319s as well as 22 F 100s, that it plans to phase out. It has orders for 56 more A320 family airplanes.

But (CEO), Marco Antonio Bologna said Boeing (TBC) offered a "complete solution" that includes (TPR) leasing three MD-11s, to be delivered over the next six months, until the 777-300ERs arrive. (TPR) said it will configure the 777-300ERs in three classes to seat 370 passengers. It also has purchase rights for four additional 777-300ERs. No other Latin American carrier operates or has orders for the 777-300ER.

Boeing VP Sales, Latin America & the Caribbean, John Wojick, said the airplane type offers "unmatched fuel efficiency" that will "enable (TPR) to successfully serve passengers on long-range routes at lower costs."

The demand for new airplanes is made possible by the airline's surging growth, evidenced by a +30.1% rise in passengers carried for the first nine months of 2006 to 18.4 million. It had a 51.1% domestic market share and a 54.9% international market share in the third quarter.

A319-132 (1575, N475TA), EX-(TAC), IEM Finance leased. (TPR), already the largest Airbus (EDS) operator in Latin America, signed a contract for 12 A319s, 16 A320s, three A321s and six A330s that brings the number of A320 family airplanes on firm order to 56. It also took 12 options. The deal finalizes a Memo of Understanding (MOU) signed in June. (TPR) currently operates 14 A319s, 48 A320s and 10 A330-200s. The new purchase closely follows its first Boeing order, which comprises four 777-300ERs.

(TPR) placed an order for (V2500)s to power 11 A319s and four A321s, (IAE) partners Rolls-Royce (RRC) and Pratt & Whitney (PRW) announced. The deal includes a "V2500Select" aftermarket services package and is worth $160 million in business to each engine maker. Japanese Aero Engines Corp and (MTU) Aero Engines also are part of (IAE). (TPR) firmed an order for 37 Airbus (EDS) airplanes and 12 options earlier this month. It currently operates 38 (V2500)-powered A320 family airplanes.

December 2006: TAM (TPR) Director of Institutional Relations, Paulo Castello Branco has thrown cold water on recent reports that (TPR) is set to join one of the three major airline alliances. Speaking to reporters at the (ALTA) Latin American Airline Leaders Forum in Cancun, Branco joked that "Everyone wants to marry (TPR) and we just want a date." He explained that the carrier is interested only in airline-to-airline agreements on specific routes and declined to speculate on when it might reconsider its opposition to joining oneworld (ONW), SkyTeam (STM) or Star (SAL) Alliance.

Branco also said he expects that a little relief is on the way for Brazil's airlines and customers, who have suffered through extensive Air Traffic Control (ATC) delays this fall, owing to a work slowdown by controllers protesting the removal of some colleagues in the wake of the September 29 midair collision between a Gol (GOT) 737-800 and a business jet. Controllers also are concerned about rising workloads. Hirings have not kept pace with traffic growth and Brazil needs at least 300 new controllers in addition to the 3,000 currently working, he confirmed. As a temporary measure, the government will add 43 controllers this week and is inviting another 60 former controllers to return after currency training.

Since the slowdown began in late October, (TPR) has seen average daily aircraft utilization fall from 13 to 11.3 hours. It has not cancelled flights, but is accepting 20 to 30 minutes average delays "on each flight, every day," Branco said. He stressed that (ATC) problems are not owing to a lack of money - - airlines will pay $500 million this year for (ATC) services - - but the government has kept funding level despite double-digit traffic growth over the past few years, laying the groundwork for the current situation.

(TPR) launched daily Confins - Buenos Aires service via Rio de Janeiro Galeao aboard 156-seat A320s. It is (TPR)'s first international flight from Minas Gerais. Starting January 2nd, Sao Paulo (GRU) - Santiago, incresed to 2/day, using A320s. Starting January 12th, launches Rio de Janeiro - Paris (CDG), 1/day, using A330-200s. It currently flies to (CDG) from Sao Paulo Guarulhos.

A320-214 (2740, PR-MHF), Virgin America (VUS) leased. A320-233 (789, PR-MBK

January 2007: 2006 = +29.8% (RPK) passenger traffic; +23.8% (ASK) capacity; 74% LF.

TAM (TPR) launched a second daily flight to Santiago, a night-time A320 service originating at Rio de Janeiro Galeao and stopping at Sao Paulo Guarulhos.

A320-214 (3002, PR-MHG), CIT Group (TCI) leased.

February 2007: TAM (TPR) reported full-year unit revenues of BRL0.21 ($0.10), a +2.5% improvement over its 2005 performance. Yields fell -1.9% to BRL0.29 and load factor rose +3.3 points to 73.9% LF. Unit cost dropped -4.3% to BRL0.18, or -5.9% to BRL0.12, excluding fuel. The airline said it exceeded its 2006 guidance in all categories, save (CASK), which it forecast cutting by -5%. It said the +6.7% year-over-year rise in fuel costs was the cause. Fourth-quarter (RASK) decreased -6.3% to BRL0.19 against a -9.8% decline in (CASK) to BRL0.17, or -6.5% to BRL0.11, excluding fuel. Yield fell -6.7% to BRL0.28 and load factor inched up +0.2 point to 71.5% LF.

TAM (TPR) selected Globe Air Cargo as its General Services Agent (GSA) in the UK and Ireland. The airline expects to carry 4 million kg of freight per year on its London Heathrow - Sao Paulo service.

March 2007: While its domestic competitors suffered through a difficult 2006, TAM (TPR) established itself as the dominant airline in Brazil with a +BRL808.8 million/+$389 million profit that represented a +89.6% surge over 2005 net earnings of +BRL426.5 million according to USA (GAAP) accounting standards. Varig (VAR)'s near-liquidation, auction and barebones operation and Gol (GOT)'s lower-than-expected earnings in a year touched by tragedy, opened the door for TAM (TPR), which added 11 net new airplanes, transported +27.9% more passengers and enjoyed a full-year revenue increase of +30.1% to BRL7.33 billion. Costs climbed +24.2% to BRL6.24 billion and operating profit soared +54.3% to +BRL1.09 billion. Fuel expense was up just +2.4% to BRL875.3 million.

During the fourth quarter, the carrier's average domestic market share reached 50.3% compared to 42.1% in the last quarter of 2005, and its international share rose to 60% from 20.9% as it launched flights to New York (JFK), London Heathrow and Miami.

TAM (TPR) flew 26.29 billion (RPK)s last year, up +32.8% from 2005. Capacity rose +26.9% to 35.56 billion (ASK)s and load factor climbed +3.3 points to 73.9% LF. Unit revenue grew +2.5% to BRL0.21, despite a -1.9% fall in yield to BRL0.29. A +5.9% gain in international yield partly offset a -7.5% decline in domestic yield. Unit cost fell -4.2% to BRL0.18 and -5.8% excluding fuel.

Fourth-quarter profit of +BRL165.9 million represented a reversal from a -BRL48 million loss in the final quarter of 2005. Revenue rose +24.3% to BRL1.95 billion and costs climbed +22% to BRL1.72 billion, lifting operating profit +44.8% to BRL228.5 million.

TAM (TPR) said it expects to increase annual average domestic market share from last year's 47.8% to more than >50% in 2007 while launching a third frequency to Paris Charles de Gaulle and two new international destinations, one of them Milan.

General Electric (GE) has ruled out a variant of the Engine Alliance (GP7000) powerplant, which powers the A380, for the A350 XWB-1000. A (GE) spokesperson said that "it is not being considered." The engine, a joint venture of (GE) and Pratt & Whitney (P&W), is currently offered only on the A380. The A350 XWB-1000 is to be powered by a (Trent 1000) at 95,000 lbs thrust. There had been brief discussions between (GE) and Airbus (EDS) on a possible 105,000-lbs (GEnx) derivative, but those talks lapsed. Meanwhile, the status of existing orders for the (GEnx)-powered A350 XWB-800/-900 remains up in the air, with (GE) stating that "we are still doing technical studies but are not close to a business agreement." Six customers for the original A350 - - Air Europa (10), US Airways (20), ALAFCO (12), GECAS (10), TAM (10) and Qatar Airways (60) - - ordered the (GEnx) and most analysts considered it a formality that new agreements will be concluded. But according to a spokesperson, "(GE) does not have a deal with Airbus (EDS) on any A350 model and previous contracts we had, are for an airplane that doesn't exist."

TAM (TPR) secured a $331 million syndicated loan led by Calyon and Natixis Transport Finance to finance pre-delivery payments on the four firm 777-300ERs ordered last fall.

TAM (TPR) took delivery of its fifth A320 this year, bringing its total fleet to 100. It expects to be flying 109 by year end.

A320-214 (3058, PR-MHK), delivery.

April 2007: TAM (TPR) flew 1.77 billion domestic (RPK)s passenger traffic in March, up +26.5% from the year-ago month. Capacity rose +26.3% to 2.56 billion (ASK)s and load factor lifted +0.1 point to 69% LF. International (RPK)s grew +68.7% to 807 million against an +85.9% increase in (ASK)s to 1.15 billion, dropping load factor -7.2 points to 70.5% LF.

Brazil's air traffic control (ATC) system will transfer from military to civilian control following a one-day walkout by top-level (ATC) officials, that forced the temporary closure of airports throughout the country and again highlighted the nation's ongoing (ATC) woes, which Brazilian airlines claim have cost them more than $48 million since September. Brazilian (ATC) has been troubled for months, with workers staging periodic slowdowns and walk-offs that have resulted in delays and cancellations becoming routine. Airlines are seeking government compensation for the money lost from system failures since last September, when protests over pay and work rules began following the mid-air collision of an ExcelAire Legacy 600 and a Gol (GOT) 737-800 that resulted in the deaths of all 154 aboard the airliner. While the ExcelAire pilots face criminal charges, investigative authorities in Brazil have conceded that (ATC) was at least partly responsible for the crash. Among the controllers' complaints is that the Brazilian Air Force, subject to rigorous regulations, lacked the flexibility to manage and modernize (ATC) successfully. Ceding to workers' demands, the air force issued a statement saying it would relinquish (ATC) to a new civilian agency that will report to the Defense Ministry but will not be bound by military rules. No date for the new agency's establishment was set. The government also agreed to give controllers a one-time bonus and begin negotiations on work rules and compensation.

President Luiz Inacio Lula da Silva said in his weekly radio address that he backed the new civilian (ATC) agency and negotiations with controllers, but he criticized the workers' methods. "I think it's serious and irresponsible [for] people with essential and delicate jobs [to stage walk-outs], because they are dealing with thousands of passengers flying across the country," he said. "If they want to discuss a salary increase, let's talk, but without endangering humans."

TAM (TPR) received its (IATA) (IAT) Operational Safety Audit Registration.

Goodrich Corp (BFG) unveiled "Prime Solutions," a full-service nacelle system aftermarket Maintenance Repair & Overhaul (MRO) program, that it said "will give airline customers the option of no longer having to invest in nacelle maintenance infrastructure." Prime Solutions customers can tailor packages to include (MRO), spares management, rotables and other assets and dedicated technical support. Goodrich (BFG) Aerostructures Aftermarket Services General Manager, Bob Gustafson said the company is "moving away from traditional supplier-customer relationships" in order to forge longer-term commitments, adding that as the Original Equipment Manufacturer (OEM), it was positioned to offer a "thorough understanding of our product life cycle."

Goodrich (BFG) reached a deal with TAM (TPR) to provide nacelle and thrust reverser service for the Brazilian carrier's A320 fleet. In conjunction with the agreement, Goodrich (BFG) will open a 30,000-sq-ft repair station in Sao Carlos later this year. Technicians will work on IAE/(V2500-A5) engine inlets, fan cowls and thrust reversers. Eventually, the facility will be capable of servicing the same components on (CFM56-5B)s and (CF6-80E1)s. Gustafson called the Sao Carlos facility "a significant milestone in our regional marketing strategy." TAM (TPR) currently flies 70 A320 family airplanes.

TAM (TPR) said it contracted Passaredo Transportes Aereos (PDO) to operate regional services to Barreiras and Vitoria de Conquista from Brasilia, Salvador and Ribeirao Preto.

(TAP) Portugal and TAM (TPR) signed a partnership agreement under which they will codeshare on flights between Portugal and Brazil and onward to destinations in each carrier's network as well as link their loyalty programs. Specific routes or effective dates were not announced.

The TAM (TPR) board elected Maria Claudia Amaro, Chairman, and Mauricio Rolim Amaro, Vice Chairman.

A320-214 (3111, PR-MHE), delivery.

May 2007: TAM (TPR) reported first-quarter net income of +BRL59.2 million/+$29.2 million, down -53.3% from +BRL126.7 million in the year-ago quarter, a drop mainly attributable to a +37.4% year-over-year increase in airplane costs and a +40.9% rise in personnel expenses as the fast-growing Brazilian carrier continued to expand into the vacuum created by the near demise of Varig (VAR). Revenue increased +15% to BRL1.83 billion as costs jumped +24.8% to BRL1.68 billion, producing operating income of +BRL146.1 million, down -38.6% from +BRL237.7 million in the year-ago quarter. Traffic grew +33.2% to 7.77 billion (RPK)s on a +36.5% lift in capacity to 10.97 billion (ASK)s, as it added 18 A320s and two A319s to its fleet. Load factor dropped -1.7 points to 70.8% LF.

Chairman & CEO, Marco Antonio Bologna touted the recent announcement of a "full codeshare agreement within the full South American region" with (LAN) Airlines and pointed to existing codeshare accords with American Airlines (AAL), Air France (AFA), and (TAP) Portugal, as evidence of TAM (TPR)'s expanding global reach. He said the carrier will continue to pursue bilateral codeshare agreements and does not currently have plans to join an alliance. CFO, Libano Miranda Barroso noted that Brazil's Air Traffic Control (ATC) problems added $7.5 to $8 million in fuel burn costs during the quarter, because inefficient traffic management means that "sometimes airplanes have to circulate more or wait longer on the ground with engines running." He added, "We believe the government will solve this. All the government institutions are aligned to reach a solution." For the full year 2007, Bologna projected a +30% increase in domestic capacity and a +60% to +70% lift in international (ASK)s. TAM (TPR)will operate 112 airplanes by year end.

TAM (TPR) and (LAN) announced agreement on a formalized business alliance for services in South America, to be implemented "within the next months," that apparently will include codesharing, linking loyalty programs and lounge sharing. "TAM (TPR) will expand its flight [offerings] in South America to include a more complete and diversified network for its passengers. In addition, clients of (LAN) Alliance companies will enjoy the ease of traveling routes operated by TAM (TPR) and TAM Mercosur (LAP), with multiple hours and frequency options," the companies said. Passengers will be able to travel "with a single ticket from the beginning to the end of the route." The alliance apparently will not cover flights to the USA and Europe. TAM (TPR) has a 50.7% market share in the Brazilian domestic market, where its network comprises 48 destinations. It also operates to Buenos Aires and Santiago, and plans to launch daily flights to Caracas in the next six months. TAM Mercosur (LAP) serves Asuncion and Ciudad del Este in Paraguay, Cordoba in Argentina, Montevideo in Uruguay, and Santa Cruz de la Sierra and Cochabamba in Bolivia. The (LAN) Alliance serves 15 destinations in Chile, 12 in Peru, 10 in Argentina, two in Ecuador, and 15 in other Latin American countries and the Caribbean.

Starting August 9th, Salvador - Paris (CDG), using A330-200s.

TAM (TPR) and United Airlines (UAL) signed a Memo of Understanding (MOU) to "develop an agreement that enables the airlines to offer codeshare flights." The proposed agreement will include reciprocal frequent-flier programs. TAM (TPR) President, Marco Antonio Bologna said the accord will give TAM (TPR) passengers access to (UAL)'s USA network, adding, "We anticipate that this partnership will result in more traffic and more revenue for TAM (TPR)." (UAL) Executive VP & Chief Revenue Officer, John Tague said, "Our complementary route networks will deliver many codeshare and frequent-flier benefits to our customers. The agreement will enable us to improve our service to customers while supporting our strategy of international growth." Implementation of the (MOU) will require execution of formal agreements and is dependent upon approval from relevant government agencies in Brazil and the USA. TAM (TPR) earlier this month announced a codeshare agreement with (LAN) on flights within South America.

(TAM) signed a Memo of Understanding (MOU) with Lufthansa (DLH) to explore "possible close cooperation," that will include "the implementation of codesharing on domestic and international routes" as a first step. The deal marks the third codeshare agreement inked by the Brazilian airline with a Star Alliance carrier in the past month. Star lost its only Latin American partner last year, when it expelled Varig (VAR) and, while there has been no known offer to TAM (TPR), the airline's recent string of codeshare deals with (TAP) Portugal, United Airlines (UAL), and now (DLH) likely will raise speculation that it is targeting Star membership.

TAM also this month reached a codeshare deal with Oneworld (ONW) member (LAN), but that agreement covers services only within South America.

The carrier said the (DLH) deal could go beyond codesharing, to include reciprocal loyalty program benefits and shared airport lounges. "We are happy to find a trusted and professional partner in TAM (TPR) in the growing Brazilian market," (DLH) VP Alliances, Strategies & Subsidiaries, Gotz Ahmelmann said. Added TAM (TPR) President, Marco Antonio Bologna: "We are going to explore possible synergies between the two companies' networks, and in doing so, we can offer new choices for flights in both Brazil and Germany."

(DLH) and Swiss (CSR) currently offer a combined 20 weekly flights to Sao Paulo Guarulhos from Frankfurt, Munich and Zurich. Bologna said this month that TAM (TPR) will continue to pursue bilateral codeshare agreements, but does not currently have plans to join an alliance.

A320-214 (3037, PR-MHL), Virgin USA (VUS) leased. A320-233 (1339, N463TA), ex-TACA International (TAC), leased.

June 2007: TAM (TPR) flew 1.83 billion domestic (RPK)s passenger traffic in May, up +23.8% from the year-ago month. Capacity climbed +30.9% to 2.64 billion (ASK)s and load factor fell -4 points to 69.4% LF. International (RPK)s were up +102.1% to 931 million, against a +117.7% rise in (ASK)s to 1.36 billion, that dropped load factor -5.3 points to 68.6% LF.

SITA was selected by TAM (TPR) to provide a comprehensive IP-based telephony architecture and Local Area Network (LAN) environment across 92 global sites under a five-year, $6.6 million contract.

TAM (TPR) converted purchase rights for four 777-300ERs into firm orders. It announced the initial order for four firm airplanes and four purchase rights last fall. TAM (TPR) said its share of the international market among Brazilian carriers last month was 72.4% and it intends to grow "by increasing flights to countries where it already operates in Latin America, the USA and Europe, as well as launching other potential destinations to attract leisure and business passengers."

July 2007: TAM (TPR) flew 1.79 billion domestic (RPK)s passenger traffic in June, up +15.2% from the year-ago month. Domestic capacity rose +24.4% to 2.47 billion (ASK)s and load factor fell -5.8 points to 72.6% LF. International (RPK)s grew +66.5% to 905 million against an +80.3% climb in (ASK)s to 1.3 billion, dropping load factor -5.8 points to 69.4% LF.

Macquarie AirFinance leased a new (IAE) (V2500)-powered A320-214 (3156, PR-MBO) to TAM (TPR). A320-232 (3180, PR-MHF), delivery.

ACCDT: A TAM (TPR) A320-233 (789, PR-MBK) skidded off a wet runway at Sao Paulo Congonhas (CGH), crashing into buildings and bursting into flames, killing all 181 passengers and six crewmembers, plus 12 killed on the ground, according to Sao Paulo State Governor, Jose Serra. The accident reportedly occurred during a driving rainstorm as the airplane attempted to land on a runway that has been criticized as being too short. The Sao Paulo fire department said there also were injuries and possibly fatalities among people on the ground. The A320 was arriving from Porto Alegre as Flight 3054, TAM (TPR) said in a statement. Leonardi Mota, a spokesperson with airport authority Infraero, said it barreled over a busy highway into a gas station and a cargo building owned by the airline.

Brazilian President, Luiz Inacio Lula da Silva attempted to assure a shaken nation that its air traffic system is safe, despite two crashes in less than 11 months that combined to kill more than >340 people, insisting in a televised address that "our aviation system is compatible with all the international standards." Extensive flight delays and cancellations resulting from ongoing (ATC) problems also have frustrated airlines and passengers in Brazil, where authorities are trying to determine the cause of the recent accident in which a TAM (TPR) A320 skidded off a rain-slickened runway at Sao Paulo.

The airline admitted later that the A320's right thrust reverser was deactivated during a maintenance check several days before the crash. But TAM (TPR) emphasized that turning off the thrust reverser was in accordance with regulations "stipulated by the maintenance of the manufacturer Airbus and approved by [Brazil's] National Civil Aviation Agency."

Silva conceded that Brazil's aviation system "is passing through difficulties." He said a new Sao Paulo airport will be built, with a site to be chosen within three months. In the meantime, he said, the number of flights and the weight of airplanes operating into Conganhas will be restricted, although specific rules were not outlined. Federal prosecutors reportedly have asked a court to issue an order to close the airport.

Further complicating a situation widely described in Brazilian media outlets as a "national crisis" was a Saturday (ATC) radar failure that forced more than a dozen international flights heading to Brazil to be turned away and also led to widespread domestic delays and cancellations.

Silva, who was criticized in Brazil for waiting three days after the A320 crash to address the country, promised the investigation into the disaster would be thorough and urged against reaching conclusions too quickly.

The International Federation of Air Traffic Controllers (ATC) Assns (IFATCA) said "numerous warning signs, multiple risks and relevant safety reports were ignored" by the Brazilian government prior to the recent TAM (TPR) A320 crash at Sao Paolo Congonhas and that air safety in Brazil "is currently compromised and is a danger to the traveling public." Citing ongoing (ATC) problems leading to extensive flight delays and cancellations, (IFATCA) President, Marc Baumgartner encouraged civilian authorities to take over (ATC) oversight from the military and suggested experts from outside the country may need to be brought in to help. He said Brazil is "continuing to ignore internationally agreed standards on air traffic management and airport design."

Jose Carlos Pereira, head of national airport authority Infraero, told reporters that the recent fatal (TPR) accident and another last year involving a Gol (GOT) 737 were "totally unrelated" events and that Brazil can solve its air safety problems without outside intervention. "This crisis is ours. The dead are ours. The problem is ours, and we are going to have to resolve it here in Brazil," he said. "Brazil does not need international help. Let others worry about their airspace and we will worry about ours."

Flight delays and cancellations continue to be pervasive throughout Brazil, particularly at Sao Paulo Congonhas (CGH), where the main runway has been closed since the recent TAM (TPR) A320 crash and major restrictions on future operations are being mandated by the government. The Brazilian national airport authority Infraero said 58% of all scheduled domestic flights in the country were cancelled (20%) or delayed at least 1 hour. At (CGH), 60% of flights were cancelled and plans to reopen the main runway were postponed until at least the end of this month.

According to TAM (TPR) CFO, Libano Miranda Barroso, speaking in a conference call, the government has informed airlines that connecting flights, charter flights and corporate/general aviation flights all will be banned at (CGH) within 60 days. The airport, Brazil's busiest prior to last week's accident, will be restricted to point-to-point flights under 2 hours flying time, he said. It will be allowed to handle just 33 flights per hour, down from 46 prior to the accident and a high of 62 earlier this decade, he added. A portion of TAM (TPR) flights will be reallocated to other airports, he said, with domestic operations going primarily to Sao Paulo Guarulhos and international flights to Rio de Janeiro. A third Sao Paulo airport will be built, according to Barroso, with a site to be chosen within 90 days. He said A320s and 737NGs "will be able to continue operating into Congonhas," but added that belly cargo may be restricted. He said TAM (TPR)'s executives are in a state of "sorrow" and are working to meet the needs of victims' families as they await results of the ongoing investigation. "What we can assure you of is that the [flight] crew . . . were a seasoned crew," he said, adding that the A320 entered TAM (TPR)'s fleet in December 2006 and "was in perfect condition." Maintenance on the airplane was in "full compliance with Airbus (EDS) manuals and according to Brazilian Civil Aviation Agency standards," he stressed.

New Brazilian Defense Minister, Nelson Jobim, in charge of reforming the country's troubled air traffic control (ATC) system, inspected the main runway at Sao Paulo Congonhas and cleared its reopening, 10 days after the fatal TAM (TPR) A320 crash, that killed 199 people. Jobim took charge of the military-run (ATC) system in the aftermath of the accident, and as thousands of passengers were stranded at airports plagued by rampant flight delays and cancellations.

With the country's two worst-ever air disasters occurring in a span of 10 months, Brazilian officials are scrambling to restore public confidence in air travel. But in an extraordinary public admission during Jobim's swearing-in ceremony last week, President, Luiz Inacio Lula da Silva confessed that he fears for his life, when flying under the current conditions. "It's no secret to any Brazilian, that we have an aviation crisis," he said. "Personally, when the airplane door closes, I deliver myself to God. Even with my luck in the hands of God, I confess I'm afraid. I confess this publicly, because I am not embarrassed to say we are afraid." Silva vowed to "do what has to be done and spend what has to be spent" to make air travel safe in Brazil.

Jobim said safety would be his top priority, and passenger amenities at airports will take a back seat. "If discomfort is the price of safety, we will stick with discomfort," he said. Referring to complaints from air traffic controllers that have escalated into several temporary work actions disrupting air traffic in Brazil over the past 10 months, he insisted he will take a no-nonsense approach. When he issues orders for reforms, he said, he will tell controllers and other aviation officials: "Act or leave. Do it or get out."

Moments before their jetliner skidded off a runway and exploded as it slammed into a building, pilots (FC) of a TAM Airlines (TPR) Flight 3054 screamed "slow down!" and "turn, turn, turn," flight recorder transcripts revealed. The horrific details read before a congressional commission investigating air safety, suggest mechanical failure or pilot error contributed to last month's accident in Sao Paulo, taking some heat off a government widely blamed for failing to improve the challenging runway, which pilots worldwide liken to landing on an aircraft carrier. The pilots (FC) were unable to activate the spoilers, aerodynamic brakes on the Airbus (EDS) A320's wings as they touched down on the short, rain-slicked runway at Sao Paulo's Congonhas airport, according to the transcripts.

"Only one reverser. Spoiler nothing," 53-year-old pilot (FC), Henrique Stephanini Di Sacco says in the transcript, giving the first indication that something is wrong. "Look at that. Slow down, slow down," says co-pilot Kleyber Lima, 54. Di Sacco replies: "I can't. I can't. Oh my God! Oh my God!" Lima's last words are: "Go! Go! Turn! Turn! Turn!" The recording ends with screams and a woman's voice, followed by an explosion.

The July 17 crash killed all 187 aboard the jetliner and 12 people on the ground in Brazil's deadliest air disaster. The Brazilian daily "Folha de S Paulo" reported that according to the flight data recorder, one of the plane's throttles was in the wrong position as it touched down, causing it to speed up instead of slowing down.

The congressional commission did not review that data publicly. But putting the throttle in the wrong position would have only complicated an already challenging landing for the pilots. TAM (TPR) previously acknowledged that one of the jet's two thrust reversers, used to slow planes during landings, was inoperative. And speculation also has focused on the urban airport's runway, which is so short that pilots are warned to abort landings if they make any errors while touching down.

"That is the classic aircraft accident," said J A Donoghue, Editor-In- Chief of Aerosafety World. "There is not just one thing that causes it, but rather it is a cascading series of events."

The commission's president, Rep Marco Maia, said that he believes mechanical failure was a factor. "From what we have determined, we can confirm that the machine failed," Maia told reporters in Brasilia. But he added that investigators must still "thoroughly examine all the possibilities."

Donoghue said that while it is too early to draw conclusions, the government's public probe hasn't helped matters. "The accident investigation process is not going along according to international standard practices. Holding an accident investigation in public is usually not the way it's done. It's usually done in a quiet, academic way, as quickly as possible, but also taking time to get a complete picture," Donoghue said.

TAM (TPR)'s press office declined to comment on the crash until the investigation is finished. Airbus (EDS) spokeswoman, Barbara Kracht said the airplane manufacturer also could not comment on the probe, citing international aviation rules.

President Luiz Inacio Lula da Silva's administration has been widely criticized for failing to do more to address aviation problems, since last September, when a Gol (GOT) jetliner went down in the Amazon, killing 154 people. That crash touched off months of flight delays, cancelations and work stoppages.

These recent revelations "will probably take the pressure off the government a bit, but the demand to improve the country's airport infrastructure will not go away," said Alexandre Barros, a political risk consultant for the Early Warning Institute in Brasilia. The runway at Congonhas had been shut earlier this year for renovations, but was opened before it could be grooved, a process that helps water run off and provides better traction in rain.

August 2007: Brazilian Defense Minister, Nelson Jobim announced that Jose Carlos Pereira, head of national airport authority Infraero, will be replaced by Space Agency President, Sergio Mauricio Brito Gaudenzi effective immediately as the shakeup of the nation's aviation leadership continued in the aftermath of last month's TAM (TPR) A320 crash. Pereira becomes the second high-profile official to lose his job since the accident, following former Defense Minister, Waldir Pires, who was replaced by Jobim as head of the ministry with oversight of Brazil's troubled air traffic system. Jobim has promised a no-nonsense approach and said that safety will be the top priority, indicating that too much attention and money was spent on passenger amenities at Brazilian airports while airside infrastructure languished. Pereira gained notice following the TAM (TPR) crash by saying that accident and one involving a Gol (GOT) 737 last year were "totally unrelated" and dismissing suggestions that Brazil needed international assistance to fix its (ATC) problems. "Let [other nations] worry about their airspace and we will worry about ours," he told reporters.

TAM (TPR) told a Brazilian congressional panel holding hearings on last month's A320 crash, that it no longer allows airplanes to land at Sao Paulo Congonhas (CGH) or Rio de Janeiro Santos Dumont (SDU) without both thrust reversers activated, a change in policy put in place after the accident. The airline has admitted that the right thrust reverser was deactivated during a maintenance check several days before the July 17 crash at (CGH), that killed 199 people, including all 187 aboard. But it downplayed that as a potential cause and said turning off the reverser was in accordance with regulations "stipulated by . . . Airbus (EDS) and approved by [Brazil's] National Civil Aviation Agency."

Marco Aurelio Castro, TAM (TPR)'s head of security, testified that shortly after the accident, the carrier mandated that airplanes landing at (CGH) and (SDU), which have short runways, must have both thrust reversers activated, the Associated Press reported. Castro said that despite the policy change, the airline doubts the inoperative thrust reverser caused the crash. It had not revealed the policy change publicly. Airbus (EDS) VP Flight Safety, Yannick Malinge testified before the same committee, that "there was no mechanical error or malfunction of the computers onboard" leading to the crash, and said it was "premature" to cite the deactivated thrust reverser as a cause.

Legislators serving on the panel expressed outrage, when it was revealed by Brazil's air force that in contrast to government regulations covering commercial airplanes, the A319 that transports President, Luiz Inacio Lula da Silva must have both thrust reversers activated at all times. The "security rule" was in place long before the accident, but covers only the President's airplanes, air force officials testified.

Brazil's National Civil Aviation Council imposed new rules for airline operations at Sao Paulo Congonhas (CGH) beginning October 1, changes that were anticipated in the wake of the fatal TAM (TPR) A320 crash in July that killed 199 people. According to TAM (TPR), from October 1, flights departing from Congonhas can only fly to destinations within 1,000 km of the airport. In addition, all flights to and from (CGH) must be direct, eliminating all stopovers and connections at the airport. Operations will be restricted to 33 movements per hour, down from 46 prior to the accident, and a high of 62 earlier this decade.

With costs growing at twice the rate of revenue, TAM (TPR) reported a second-quarter net loss of -BRL28.6 million/-$15 million, reversed from a +BRL97.1 million profit in the year-ago quarter. The carrier noted that costs and claims related to the July 17 A320 crash at Sao Paulo Congonhas, which occurred after the June reporting period ended, are unknown, as it does "not have sufficient information" on the cause and potential damages.

TAM (TPR)'s second-quarter loss and a negative result for Gol (GOT) demonstrate the toll Brazil's ongoing Air Traffic Control (ATC) problems and airport congestion were having, even prior to the nation's worst air accident.

Second-quarter revenue rose +13.7% to BRL1.97 billion, but expenses climbed +28.5% to BRL1.94 billion owing to a +26.2% jump in fuel costs, a +42.5% surge in takeoff, landing and navigational charges, and a +50.7% increase in personnel expenditures. Gross profit dropped -85.4% to +BRL33 million from +BRL225.6 million in the year-ago quarter. The carrier continued its rapid growth, with traffic increasing +38% to 8.33 billion (RPK)s on a +45.5% lift in capacity to 11.73 billion (ASK)s, producing a load factor of 74.9% LF, down -3.8 points. Yield declined -18.4% to 24.64 cents as (RASK) dipped -21.8% to 16.8 cents and (CASK) fell -11.6% to 16.52 cents.

(TAP) Portugal and TAM (TPR) revealed details of their previously announced codeshare accord, saying that an operating agreement will take effect September 1, allowing TAM (TPR) passengers to purchase tickets for (TAP) flights between Brazil and Lisbon, and Porto and to connect to Faro, Funchal and Porto Santo. (TAP) will add its code on several TAM (TPR) domestic flights beyond Rio de Janeiro, Sao Paulo and Brasilia. The agreement also links the airlines' loyalty programs and provides for interline e-ticketing, lounge access and through check-in.

TAM (TPR) placed an order for four additional 777-300ERs, taking its commitment to the type to eight. Its first airplane is scheduled for delivery in June 2008. Boeing (TBC) said the order pushed all-time sales of the 777 past >1,000.

TAM (TPR) decelerated its A320 family fleet plan for 2008 to 2011, based on lower "demand growth expectations in the domestic market" resulting from Brazil's ongoing Air Traffic Control (ATC) challenges. Its 2008 fleet will contain 98 Airbus (EDS) narrow bodies, down from 103 originally planned. A320 family airplanes in TAM (TPR)'s fleet will total 101 in 2009, down from 106; 107 in 2010, down from 112, and 110 in 2011, down from 115.

A320-214 (3211, PR-MHM), delivery. A320-232 (1652, PR-MBQ), ex-JetBlue (JBL), leased. 2 A340-541s (PT-MSN - see photo), ex-Air Canada (ACN) - - to be used for Rio de Janeiro to Frankfurt, Germany.

September 2007: TAM (TPR) said it will launch daily Sao Paulo Guarulhos - Montevideo service from November 5.

A320-231 (249), returned, leased to Air Moldova (MOL). A320-214 (3240, PR-MHN), 2 A320-231s (3222, PT-MXA; 3228, PT-MXB), and A320-232 (1802, PR-MBR), ex-JetBlue (JBL), deliveries.

October 2007: TAM (TPR) flew 1.67 billion domestic (RPK)s passenger traffic in September, up +0.3% from the year-ago month, against a +11% increase in capacity to 2.52 billion (ASK)s, and load factor fell -7 points to 66.1% LF. International traffic rose +62.7% to 919 million (RPK)s as capacity climbed +76.2% to 1.29 billion (ASK)s, and load factor dropped -5.9 points to 71% LF.

AWAS (AWW) completed its first sale/leaseback deal with TAM Brazil (TPR) for an A320. The lease is for six years. VGS Aircraft Holding (Ireland) through its wholly owned subsidiary VGS Investments One Ltd acquired an A320 from JetBlue Airways (JBL), that is leased to TAM (TPR) until February 2014.

TAM (TPR) took delivery of an A340-500, its first of the type, and said it will use the airplane to launch daily service between Brazil and Frankfurt from November 30.

3 A320-214s (3266, PR-MHP; 3278, PR-MHO, RBS Aerospace leased, 3284, PR-MHQ), deliveries.

November 2007: TAM (TPR)'s third-quarter net income plunged -77.2% to +BRL48.5 million/+$27.8 million from +BRL212.7 million in the year-ago quarter, as it contended with rising costs and flat revenue, in the aftermath of July's fatal A320 accident at Sao Paulo Congonhas.
TAM (TPR)'s profit decline was nearly identical to that of rival Gol (GOT), with both carriers' load factors noticeably dropping as domestic demand fell far short of matching large capacity increases. The TAM (TPR) A320 crash that killed 199 people came just nine months after a Gol (GOT) 737-800 was involved in a midair, that resulted in the deaths of all 154 aboard. The accidents and an ongoing Air Traffic Control (ATC) crisis have contributed to a fear of flying among Brazilians, that has hit the nation's fast-growing carriers hard. "The domestic market demand increased +4.1%, comparing 3rd quarter 2007 with 3rd quarter 2006, while there was an increase in supply of +20.2% in the same period," TAM (TPR) said. "As a result, the [Brazilian airline] industry's load factor decreased +10 points to 65% LF in 3rd quarter 2007." TAM (TPR)'s third-quarter revenue dipped -0.7% to +BRL2.06 billion, while expenses climbed +16.1% to BRL2 billion, producing an operating profit of +BRL57.2 million, a -83.6% drop from +BRL349.5 million last year. Traffic rose +15.5% to 8.32 billon (RPK)s on a +29.3% boost in capacity to 12.12 billion (ASK)s, producing a load factor of 68.6% LF, down -8.2 points. Yield fell -14.6% to BRL25.8 cents, as (RASK) decreased -23.2% to BRL17 cents, and (CASK) lowered -10.2% to BRL16.5 cents. TAM (TPR)'s domestic market share declined -1.7 points year-over-year to 49.3%, as of September 30, while its international share rose +11.1 points to 66.2%.

1st 6 months = 15.95 billion (RPK)s (+37.8%).

(TAM) (TPR) and United Airlines (UAL) launched their new codeshare agreement, enabling both carriers' customers to earn and redeem frequent-flier miles/points on the partner. "By combining the two networks, (TAM) (TPR) customers may now purchase tickets on United Airlines (UAL) operated flights between Brazil and the United States . . . [and also] connect to several destinations in the United States," (UAL) said. "United Airlines (UAL) will offer service on flights operated by (TAM) (TPR) from Miami and New York [JFK] to the cities of Sao Paulo and Manaus, enabling passengers to connect to several points in Brazil."

TAM (TPR) CEO, Marco Antonio Bologna resigned to join TAM Empreendimentos e Participacoes, which the airline described as "a company pertaining to the Company's controlling block." He will be succeeded by VP Operations, David Barioni Neto, who in turn will be succeeded by Fernando Sporleder Jr.

A320-214 (3313, PR-MHR), A321-231 (3294, PT-MXC), and A330-223 (869, PT-MVM), deliveries.

December 2007: TAM (TPR) flew 1.9 billion domestic (RPK)s passenger traffic in November, up +15.5% on the year-ago month, against a +9% rise in capacity to 2.63 billion (ASK)s, that lifted load factor +4.1 points to 72.1% LF. International (RPK)s climbed +58.4% to 960 million, while capacity grew +65% to 1.41 billion (ASK)s. Load factor fell -2.9 points to 68% LF.

Lufthansa (DLH) and TAM (TPR) signed an agreement to codeshare, beginning in the first half of next year, and link loyalty programs. TAM (TPR) passengers will have access to (DLH) flights from Sao Paulo Guarulhos (GRU) to Frankfurt (FRA) and Munich, and onward to German destinations, Zurich and Geneva. (DLH) passengers will have access to TAM (TPR)'s (FRA) - (GRU) service and onward connections to nine domestic destinations, Buenos Aires, Montevideo and Santiago. TAM (TPR)'s A340-500 Frankfurt service launched November 30.

TAM (TPR )said it will adjust its domestic schedule, as further restrictions take effect at Sao Paulo Congonhas (CGH). Its daily slots will be reduced to 106 from 117, with total movements at the airport dropping from 33 to 30 per hour between 6 am and 10 pm, and to 16 between 10 pm and 10:30 pm. Adjustments include the transfer of frequencies to Brasilia, Goiania, Caxias do Sul, and Maringa from (CGH) to Guarulhos, and new service from the latter to Joinville, Uberlandia, Ribeirao Preto, Sao Jose do Rio Preto, Salvador, and Recife.

(ILFC) (ILF) announced a leasing deal with TAM (TPR) for one A320-200 powered by (CFM56-5B4)s, to be delivered next March under a six-year lease.

A320-214 (3325, PR-MHS), RBS Aerospace leased and A330-223 (876, PT-MVN), delivery.

January 2008: TAM (TPR) flew 2.06 billion domestic (RPK)s passenger traffic in December, up +13.2% from the year-ago month. Capacity rose +13.8% to 2.86 billion (ASK)s and load factor dropped -0.4 point to 71.9% LF. International traffic grew +68.6% to 1.2 billion (RPK)s against a +77% lift in (ASK)s to 1.68 billion, lowering load factor -3.5 points to 71.3% LF.

2007 statistics: 33.12 billion (RPK)s passenger traffic +32.2%; +38.5% capacity (ASK)s; -3.3 load factor for 70.6% LF. SEE ATTACHED COMPARISON CHART TO SELECTED OPERATORS - "TPR-2007-STATS."

TAM (TPR) launched daily, Sao Paulo Guarulhos - Madrid service aboard an A330. The Spanish capital is its fifth European destination.

TAM (TPR) and LAN Peru (LPU) launched a codeshare arrangement under which TAM (TPR) will place its code on LAN Peru (LPU) flights between Sao Paulo and Lima, and onward to Cuzco and Arequipa, while LAN Peru (LPU) will have access to "multiple flight options" operated by TAM (TPR), the Brazilian carrier said. It already codeshares with (LAN) Airlines.

TAM (TPR) signed a loan agreement with BNP Paribas to finance up to $117.1 million in pre-delivery payments on 30 Airbus (EDS) airplanes, scheduled to arrive through 2010.

(IATA) (ITA) blasted the Brazilian government's proposal to raise per-hour airplane parking fees at Sao Paulo Guarulhos (GRU), significantly, asserting that the hike could cost international airlines operating there, as much as $90 million per year, and likely violates bilateral aviation accords. It is not uncommon for airplanes operated by international carriers to land at (GRU) early in the day and remain parked before departing again that night. In an effort to ease congestion at the crowded airport, Brazil is trying to either force carriers to keep airplanes moving or pay large fees for leaving them parked for extended periods.

(IATA) (ITA) Director General & CEO, Giovanni Bisignani argued in a letter sent to Brazilian President, Luiz Inacio Lula da Silva that a significant rise in parking fees likely would lead to reduced international service to the country by airlines unwilling or unable to pay. He added that the fee increase would violate "various bilateral aviation agreements" and "provoke strong international protests," that could include other nations "applying similar measures to Brazilian airlines operating overseas."

TAM (TPR) firmed its order for 22 A350 XWBs announced last summer and converted options for four A330-200s and 20 A320s. The 46 airplanes are worth approximately $9.6 billion at catalog prices, the airline said. The first A350 delivery is scheduled to commence in 2013; the A330s will arrive beginning 2010. TAM (TPR) currently operates 102 Airbus (EDS) airplanes, including 12 A330-200s and two A340-500s on its long-haul routes.

February 2008: TAM (TPR) flew 2.19 billion domestic (RPK)s passenger traffic in January, a +9.8% rise from the year-ago month. Capacity increased +11% to 2.98 billion (ASK)s and load factor fell -0.8 point to 73.4% LF. International (RPK)s rose +76.8% to 1.41 billion, against a +65.1% increase in (ASK)s to 1.77 billion, sending load factor up +5.3 points to 79.9% LF.

At Congonhas Airport, Sao Paulo, TAM Linhas Aereas (TPR) unveiled a new corporate identity - SEE ATTACHED - "TPR-NEW IDENT-FEB08."

(TPR) expects to sign an agreement with one of the three major global alliances by mid-year.

A320-214 (3391, PR-MHU), delivery.

March 2008: TAM (TPR) flew 1.88 billion domestic (RPK)s passenger traffic in February, up +21.8% from the year-ago month, against a +17.2% rise in capacity (ASK)s to 2.67 billion. Load factor lifted +2.7 points to 70.5% LF. International traffic was up +65.2% to 1.22 billion (RPK)s, capacity grew +55.1% to 1.65 billion (ASK)s and load factor increased +4.5 points to 73.9% LF.

TAM (TPR) suffered precipitous drops in full-year unit revenue and yield in 2007, according to select operating indictors released this week. Yield declined -13.6% year-over-year to BRL25.3 cents and (RASK) fell -17.1% to BRL17.08 cents, according to USA (GAAP). Load factor dropped -3.5 points to 70.4% LF, while unit cost improved +7.6% to BRL16.22 cents, or +5.8% to BRL10.89 cents, excluding fuel. On domestic services, yield fell -19.4% to BRL23.42 cents and unit revenue declined -22% to BRL15.51 cents. Internationally, yield was down -17% to BRL17.66 cents and (RASK) plunged -23.3% to BRL12.44 cents. In the fourth quarter, TAM (TPR)'s unit revenue fell -7.6% year-over-year to BRL17.82 cents, while yield decreased -13.6% to BRL26 cents. Load factor was down -0.5 point to 71% LF.

JetBlue (JBL) founder & Chairman, David Neeleman is trying his hand at starting yet another airline and signed a contract for 36 EMB-195s to operate in Brazil. The new carrier will be based in Sao Paulo, where Neeleman was born, and is targeting a 2009 launch. It eventually will serve most major Brazilian markets, flying up to 76 EMB-195s by 2013. The agreement with Embraer includes options on 20 airplanes, plus 20 purchase rights. The firm order is valued at $1.4 billion and the 118-seaters will feature LiveTV satellite InFlight Entertainment (IFE), a first for a Brazilian airline. Neeleman has raised $150 from unnamed investors in the USA and Brazil to fund the venture. "The EMB-195 is the perfect airplane for the Brazilian market," he said. "Our target market is the 150 million passengers, who travel annually by long-distance bus as well as those who, for lack of a convenient alternative, don't travel at all." The airline, as yet unnamed, has applied for its air operating certificate (AOC). It plans to take delivery of its first airplane this year. "It's a market that is overpriced and underserved," Neeleman spokesperson Gareth Edmonson-Jones said. "Fares in Brazil are about +50% more expensive than comparable flights in the USA. Cost efficiencies and a focus on the bottom line will bring those fares down." The discount fares offered by the new carrier could triple or quadruple enplanements in the coming years, he added. Neeleman acknowledged the stiff competition the startup will face from Gol (GOT) and TAM (TPR), which are well established. "We respect TAM (TPR) and Gol (GOT) as well-run companies with deep pockets," he said. "We believe, however, that the Brazilian market is ready for a third major airline, and that there is sufficient untapped potential to support all of us."

April 2008: TAM (TPR)'s 2007 net income dropped -78.9% to +BRL128.8 million/+$74 million from +BRL611.8 million in the prior year, as it contended with both the aftermath of the July A320 crash that killed 199 people and ongoing Air Traffic Control (ATC) problems in Brazil.
The carrier called 2007 "a year of many challenges," and said the accident, combined with Brazil's aviation "infrastructure" issues and "high volatility" in the global economy drove the poor result, but it expressed optimism about future prospects. Full-year revenue increased +11% to BRL8.15 billion, but expenses jumped +24.3% to BRL7.89 billion, producing operating income of +BRL262 million, down -73.7% from +BRL996.6 million in 2006. Costs increased across a range of categories: Fuel expense rose +19.1%, personnel costs leaped +48.9% and landing/takeoff and navigation charges grew +33.7%. Traffic was up +27.4% to 33.5 billion (RPK)s passenger traffic on a +33.8% lift in capacity to 47.6 billion (ASK)s, producing a load factor of 70.4% LF, down -3.5 points. (RASK) fell -17.1% to BRL17.12 cents and yield decreased -13.6% to BRL25.30 cents.

Fourth-quarter net income declined -63.5% to +BRL49.8 million from +BRL136.2 million in the year-ago period.

TAM (TPR) said it will grow domestic capacity by +14% in 2008, "mainly from the substitution of F 100s with A320 family airplanes." It added that international (ASK)s will rise +40%, "mostly due to flights launched throughout 2007 having full impact in 2008 [including services to Milan, Cordoba, Caracas, Montevideo, Frankfurt, and Madrid] in addition to the substitution of MD-11s by the newer and larger 777-300ERs."

May 2008: TAM (TPR) reported first-quarter net income of +BRL2.6 million/+$1.6 million, down -95.7% from +BRL59.2 million earned in the year-ago quarter, as escalating expenses offset revenue increases.
Total revenue rose +22.7% to BRL2.35 billion, but costs lifted +28.5% to BRL2.24 billion, including a +48.1% leap in fuel expense to BRL844.8 million. Fuel costs were more than double any other expense category. Operating income was +BRL8.5 million, down -89.8% from +BRL83.4 million last year.

Traffic increased +30% to 10.1 billion (RPK)s on a +25.8% lift in capacity to 13.8 billion (ASK)s, producing a load factor of 70.8% LF, up +2.4 points. Yield fell -5.7% to BRL23.2 cents, as (RASK) decreased -2.1% to BRL16.4 cents, and (CASK) increased +2.1% to BRL16.3 cents, largely reflecting fuel expense increases as the carrier took delivery of two A340s and two A330s, and began operating them on long-haul services and fuel prices escalated. (CASK) ex-fuel, decreased -5.5%.

June 2008: TAM (TPR) flew 2.11 billion domestic (RPM)s passenger traffic in May, up +16% year-over-year, against a +10.2% increase in (ASM)s to 2.89 billion. Load factor rose +3.7 points to 73.1% LF. International traffic climbed +34% to 1.25 billion (RPM)s, while capacity rose +23.5% to 1.68 billion (ASM)s. Load factor was up +5.8 points to 74.5% LF.

(TPR) and Swiss International Air Lines (CSR) signed a Memo of Understanding (MOU) establishing a codeshare agreement and loyalty program link-up. It is expected to be implemented in the second half of this year.

The USA and Brazil announced an enhanced air services agreement that will provide for a nearly +50% increase in passenger flights between the countries, while eliminating restrictions on the number of airlines that can fly the routes. "This agreement will help air carriers meet the growing demand for passenger and cargo services between the USA and Brazil," USA Secretary of Transportation, Mary Peters said. "Now more than ever, it is crucial that we give USA carriers every possible opportunity to compete and succeed wherever passengers want to fly." The previous agreement allowed only four airlines from each country to fly to the other, while the new deal removes those limits. In addition, the number of permissible weekly flights between the nations will increase in four stages to 154 from the current 105 between next month and October 2010.

USA carriers will gain access to Fortaleza, Curitiba, and three additional new cities to be selected by USA authorities. At present, American Airlines (AAL), Continental Airlines (CAL), Delta Air Lines (DAL), and United Airlines (UAL) fly to Sao Paolo and Rio de Janeiro Galeao. USA and Brazilian carriers also now will be permitted to provide certain codeshare services with partners from third countries.

Weekly cargo flights will increase to 35 from 24 immediately, and to 42 in 2010, while the number of cargo charters allowed, also will rise. USA cargo companies now will be permitted to transfer freight from airplanes to ground vehicles for home and office delivery in Brazil. The terms of the agreement will be applied on a reciprocal basis until it enters into force.

(TPR) will operate twice-weekly, Sao Paulo Guarulhos - San Carlos de Bariloche service July 3 to August 10 aboard an A320. The route currently is served only by charter flights, according to TAM (TPR), which said it will evaluate the viability of the route for scheduled service.

(AWAS) (AWW) announced the lease of two 767-300ERs to TAM (TPR). The airplanes will operate in South America this summer, before entering new service to Miami.

July 2008: TAM (TPR) flew 1.96 billion domestic (RPK)s traffic last month, up +9.3% year-over-year, against an +18.3% hike in capacity to 2.91 billion (ASK)s. Load factor dropped -5.6 points to 67.1% LF. International (RPK)s rose +32.9% to 1.2 billion, while capacity (ASK)s climbed +26.8% to 1.65 billion, lifting load factor +3.4 points to 72.6% LF.

VEM Maintenance & Engineering (VAR) reached agreement with TAM (TPR) for maintenance of 767-300 components across its fleet. The contract includes provisioning of exchange and repair components including Auxilliary Power Units (APU)s, landing gears, avionics, pneumatics, and hydromechanical systems.

(TPR) chose (PW4000-100)s to power two A330-200s in a deal Pratt & Whitney valued at more than >$100 million. The contract includes installed and spare engines and a 12-year service agreement.

GMT Global Republic Aviation announced the acquisition of four A320-200s worth $68 million from Aercap Holdings (DEA). The airplanes are on lease to TAM (TPR) until 2012. Dublin-based, GMT now owns 16 airplanes.

August 2008: TAM (TPR) flew 2.16 billion domestic (RPK)s traffic in July, up +8% from the year-ago month. Capacity rose +13.8% to 3.07 billion (ASK)s, and load factor fell -3.8 points to 70.4% LF. International traffic jumped +37.5% to 1.48 billion (RPK)s against a +27.2% hike in capacity to 1.82 billion (ASK)s. Load factor rose +6.1 points to 81.5% LF.

(TPR) posted second-quarter net income of +BRL50.2 million/+$31.1 million, reversed from a -BRL28.6 million loss in the year-ago period, riding a big boost in the domestic market driven by the replacement of 15 F 100s with 13 A320s and three A321s, and an expanded international network.

Revenue for the three months ended June 30, increased +27.7% to +BRL2.51 billion, including a +30.8% jump in domestic passenger revenue to +BRL1.53 billion, as it took advantage of bigger, more efficient new airplanes and raised fares. Expenses grew 26.4% to BRL2.45 billion, including a +54.2% leap in fuel costs to BRL988.6 million. Operating profit was +BRL67.1 million, more than double the BRL33 million last year.

Traffic increased +15.5% to 9.62 billion (RPK)s, on a +16.5% lift in capacity to 13.67 billion (ASK)s, producing a load factor of 70.4% LF, down -0.6 point. Yield rose +10.3% to BRL27.17 cents, as (RASK) increased +9.5% to BRL18.4 cents, and (CASK) lifted +8.6% to BRL17.58 cents.

(TPR) is still not quite the hugely profitable carrier it once was, but a 4% operating margin in a fuel crisis is very good.

(TPR) said it plans to continue to grow its international network, filling a void left by the former Varig (VAR)'s retreat to South America under Gol (GOT)'s ownership. (TPR) started service to Madrid, Frankfurt, Caracas, and Montevideo at the end of 2007.

(TPR) Cargo opened a new 2,160-sq-m airfreight terminal in Manaus with 80 tons of storage capacity. The facility has exclusive areas for different types of cargo and cold storage for perishables, TAM (TPR) said. "The new terminal can handle nearly 35% more freight than its predecessor in addition to allowing for expansion in coming years depending on market demand," according to the airline.

(TPR) announced a revision to its international growth plan comprising the addition of two 767-300s to its fleet before year end, meaning it will close the year with 125 airplanes in operation. During the remainder of 2008, it will launch Sao Paulo Guarulhos (GRU) - Lima, (GRU) - Orlando International, Belo Horizonte - Miami, and Rio de Janeiro Galeao - New York (JFK).

(TPR) took delivery of the first of eight 777-300ERs - - SEE ATTACHED - - "TPR-777-300ER-AUG08." The airplanes seat 365 in three classes and will operate to Santiago initially before transitioning to transatlantic service.

September 2008: TAM (TPR) began flying nonstop from Rio de Janeiro to Miami with 767-300s. Rio - New York (JFK) flights, also with 767-300s, begin November 1.

(TPR) signed a contract with OnAir, a joint venture between Airbus (EDS) and (SITA), that will enable its passengers to use cell phones or other mobile devices in flight on its A320s for voice, Short Message Service (SMS) messaging or e-mail on South American routes.

October 2008: The Star Alliance (SAL) returned to Latin America, formally inviting Brazil's TAM (TPR) to be its 24th member, and said it will look to increase its presence further in the region next year.
Without a member south of the USA since Varig (VAR) was expelled in 2006, the (SAL) believes TAM (TPR)'s inclusion will turn Latin America from a "white spot" into a "hot spot" on its map, according to CEO, Jaan Albrecht. (TPR) currently flies to 42 domestic and 16 international destinations with a fleet of 116 airplanes. It will add 36 destinations to the (SAL)'s network and has codeshare agreements in place with (TAP) Portugal, Lufthansa (DLH), and its mentor United Airlines (UAL), plus a new partnership with Air Canada (ACN). "We are talking about a country and a region of the world, which cannot be ignored," Albrecht said, claiming that Brazil accounts for 30% of commercial aviation revenue in South America. TAM (TPR) holds a 20% market share on the continent, a massive 73.9% share of Brazil's international traffic (in August), and 54.2% of its domestic market.

TAM (TPR) CEO, David Barioni said Star (SAL) membership will help it grow even stronger. "Eight years ago we were Brazil's fourth-biggest carrier. Now we are . . . number one," he said. "This is a very important step forward for TAM (TPR), as through our alliance membership we will gain further international brand recognition." He said the airline will become a full Star (SAL) member within 12 to 18 months and should realize an additional $60 million in revenue during its first year of membership. It intends to work with the alliance and Sao Paulo Guarulhos to establish a dedicated Star (SAL) terminal next year.

TAM (TPR) will end its cooperation with SkyTeam (STM)'s Air France (AFA) by October 31, but will continue working with Oneworld (ONW) member (LAN) for the time being. "But after a certain time, we will have to rethink that situation," Barioni said.

If Albrecht has his way, TAM (TPR) should not lack regional partners for long. "The alliance system has been proven, especially in difficult times. We see a lot of interest to join us," he said in Sao Paulo. "TAM (TPR), which mainly covers the southern part of the continent, is just one step. We are looking at Avianca (AVI), Copa (COP) [Airlines], and TACA (TAC). Don't be surprised when we make an announcement in 2009."

The Star Alliance (SAL) is active in Europe as well. It is in talks with Russia's S7 Airlines (SBR) and Rossiya about possible membership (AiRUnion had been considered Star (SAL)'s Russian target until its collapse last month) and may find itself in Italy. "It is no surprise that our member Lufthansa (DLH) is a serious bidder for Alitalia (ALI)," Albrecht said. "If (DLH) buys (ALI), then of course we would have to hold talks for (ALI) to join the Star Alliance (SAL)." Star (SAL) currently has 21 members and is preparing to welcome Air-India (AIN), and Continental Airlines (CAL).

(TPR), which formally was invited to join the Star Alliance (SAL), also hopes to play a major role in Latin American maintenance, repair and overhaul (MRO). The carrier's Technology Center (TC) is located in Sao Carlos, some 230 km northwest of Sao Paulo. It has invested $185 million in the 4.6-million-sq-m, six-hangar facility since it opened in 2001 at the site of a former truck factory. "We want to make a more aggressive move in third-party business," VP MRO, Ruy Amparo said. (TPR) currently can perform all major checks, including "C" and "D" maintenance checks, on A320 family airplanes, A330s and F 100s. It eventually wants to offer (MRO) on EMB-170s/190s. It will decide before year end whether its pursuit of third-party work will necessitate the spinoff of its (MRO) center into a separate subsidiary. "We don't want to exclude partnerships," Amparo said, adding that the company would consider working with (VEM), the former (MRO) division of Varig (VAR) now owned by (TAP) Portugal, which is its largest competitor. Lufthansa Technik (DLH)/(LTK) and Air France Industries (AFI) also are candidates to invest in TAM (TPR), which is looking to make an international splash. "The (MRO) market in Latin and South America is very strong and expecting an overall growth rate of +5% per year," he said.

(TPR) owns the airfield at Sao Carlos and operates up to three weekly maintenance flights to/from the two Sao Paulo airports. It prefers to operate in the interior, where it has more space and flexibility than at the constrained airports in the state capital. It intends to construct a two-bay hangar to accommodate the 777 and extend the runway at Sao Carlos to 3,000 m. The Technology Center employs 860 and is the beneficiary of TAM (TPR)'s $300 million annual investment in fleet maintenance.

(TPR) will launch daily, Sao Paulo Guarulhos - Lima on October 17 aboard a two-class A320. (TPR) will launch daily, A330 Sao Paulo Guarulhos - Orlando International on November 21.

VGS Aircraft Holding acquired two A320-200s from JetBlue Airways (JBL) and leased them to (TPR) through September/October 2014.

November 2008: TAM (TPR) flew 1.96 billion (RPK)s traffic in October, up +7.3% from the year-ago month. Capacity rose +15.8% to 3.02 billion (ASK)s and load factor fell -5.2 points to 64.7% LF. International (RPK)s grew +35.2% to 1.41 billion against a +26.3% lift in (ASK)s to 1.82 billion, sending load factor up +5.1 points to 77.8% LF.

(TPR) suffered a -BRL112.7 million/-$52.2 million loss in the third quarter, reversed from a +BRL48.5 million profit in the year-ago period, despite a +40.5% surge in operating revenue to BRL2.9 billion. (TPR)'s costs grew +36.2% to BRL2.73 billion, but BRL301.5 million in financial charges, owing mainly to losses on fuel hedges, dragged its operating result into the red. Its operating loss was -BRL152.9 million compared to a +BRL78.3 million profit last year. Passenger numbers rose +17% to 7.9 million as traffic (RPK)s jumped +25.2% to 10.41 billion. Capacity climbed +19% to 14.43 billion (ASK)s, lifting load factor +3.5 points to 72.2% LF. International load factor soared +8.6 points to 79.6% LF. Unit revenue was up +18% to BRL20.07 cents, and yield increased +11.9% to BRL28.88 cents. It took delivery of two A319s, four A320s, one 767, and one 777 during the quarter. As of September 30, it was operating a fleet of 118, comprising 98 A320 family airplanes and 20 wide bodies.

Nine-month net loss was -BRL59.9 million compared to a +BRL79.2 million profit in the first nine months of 2007. The operating result swung to a -BRL67 million loss from a +BRL122.7 million profit. (TPR) said it plans to raise 2009 domestic capacity by +8% (ASK) and international capacity by +20% (ASK) year-over-year, while maintaining a 70% LF load factor.

IBM reached a deal with (TPR) for technology services, including installation of Information Technology (IT) infrastructure and associated help desk and field support. The contract is expected to improve the carrier's server as well as its check-in system and tickets and reservation software.

Worldwide Flight Services won a contract from (TPR) to provide cargo handling services including documentation management and processing, security screening and customs clearance at Orlando International. The carrier operates A330s between Orlando and Sao Paulo.

(TPR) took delivery of the second of eight 777-300ERs it has on order and plans to use it to operate six-times-weekly, Sao Paulo Guarulhos - Frankfurt flights.

December 2008: TAM (TPR) flew 1.95 billion domestic (RPK)s traffic in November, a +3.4% increase from the year-ago month. Capacity rose +13.4% to 2.96 billion (ASK)s and load factor fell -6.4 points to 65.8% LF. International traffic jumped +36.3% to 1.32 billion (RPK)s against a +32.4% rise in (ASK)s to 1.88 billion, sending load factor up +2 points to 70% LF.

(TPR)'s Technological Center in Sao Carlos received (EASA) 145 certification for Maintenance Repair & Overhaul (MRO) services including "C" and "D" checks on A321s and A330s. The center also has been approved for A319s, A320s and F 100s.

2 A319-112s (3737, PR-MYB; 3733, PR-MYC), (BOC) Aviation (SIL) leased, and 1 A320-214 (3662, PR-MYA), delivery.

January 2009: TAM (TPR) flew 2.15 billion domestic (RPK)s traffic in December, up +5% year-over-year, against a +14.3% rise in capacity to 3.25 billion (ASK)s. Load factor dropped -5.8 points to 66.1% LF. International traffic climbed +22.1% to 1.46 billion (RPK)s, capacity rose +21.9% to 2.05 billion (ASK)s and load factor was up +0.1 point to 71.4% LF.

2 A320-214s (3750, PR-MYD), RBS Aerospace leased, (3761, PT-MXD, delivery and A330-223 (977, PT-MVR), delivery.

February 2009: TAM (TPR) flew 2.44 billion domestic (RPK)s traffic in January, up +11.8% year-over-year, against a +13.8% rise in capacity (ASK)s to 3.39 billion. Load factor fell -1.3 points to 72.1% LF. International (RPK)s rose +16% to 1.64 billion, while capacity climbed +18.9% to 2.1 billion (ASK)s, lowering load factor -1.9 points to 77.9% LF.

(TPR) took delivery of its fifth A321-231 (3816, PT-MXE). The airplane seats 220 and will operate Porto Alegre - Sao Paulo Guarulhos - Recife.

March 2009: TAM (TPR) flew 1.84 billion domestic (RPK)s traffic in February, down -1.9% year-over-year. Capacity climbed +13.6% to 3.02 billion (ASK)s, dropping load factor -9.6 points to 60.9% LF. International (RPK)s rose +12.6% to 1.37 billion against a +16.9% lift in capacity to 1.92 billion (ASK)s. Load factor was down -2.7 points to 71.3% LF.

(TPR) sank to a -BRL1.34 billion/-$577.4 million) loss in 2008, a reversal from the +BRL468.6 million profit the Brazilian carrier earned in 2007, as its fuel hedges and the depreciation of the real eclipsed operational improvements. Operating revenue rose +29.7% year-over-year to BRL10.96 billion while expenses were up +27.8% to BRL9.86 billion. Operating profit improved +65% to +BRL688.6 million from +BRL417.4 million in 2007. But financial losses of -BRL2.61 billion, compared to earnings of +BRL260.3 million on a similar basis in 2007, were critical. The company incurred -BRL1.96 billion of those losses in the fourth quarter, comprising -BRL815 million in exchange fluctuations, -BRL919 million in non-cash fuel hedge losses and -BRL145 million in realized losses. (TPR) said it renegotiated its hedge contracts for 2009.

It transported 30.1 million passengers last year, up +8.2%, and flew 40.52 billion (RPK)s traffic, a +20.9% increase. Capacity was up +19.9% to 57.1 billion (ASK)s and load factor rose -0.6 point to 71% LF. Average fare climbed +19.2% to BRL298. Yield rose +6.8% to BRL24.67 cents on a +8.2% increase in unit revenue to BRL18.48 cents. The carrier finished the year with 129 airplanes (four 777s, two A340s, 16 A330s, three 767s, three A321s, 81 A320s and 20 A319s), compared to 115 on December 31, 2007.

In the fourth quarter, which featured (TPR)'s invitation to join the Star Alliance (SAL), it lost -BRL1.12 billion. It earned +BRL118.5 million in the final three months of 2007. (EBIT) more than tripled to BRL326.8 million from BRL90 million.

(TPR) expects to add three A320 family airplanes this year and finish the year with 132 planes in its fleet. Three more narrow bodies and two A330s are scheduled to join in 2010. It said it has arranged financing for pre-delivery payments for all those airplanes. "We believe we will grow at a lower pace in 2009," (TPR) said. Subsequently, it lowered its projected full-year (RPK) traffic growth from the +5% to +9% announced last November to +1% to +5%. Load factor, originally anticipated to be 70% LF, now is forecast at 67% LF.

Less than <20% of (TPR) sales are direct (via website, storefronts and call center).

May 2009: TAM (TPR) CEO, David Barioni said at a conference in Sao Paulo that the company's "financial result is going to be positive this year" and that "the worst is over," "Reuters" reported. The carrier posted a -BRL1.34 billion/-$628.3 million loss in 2008. Barioni also said, "We might ask [Airbus (EDS)] to push the deliveries back, but no way would we cancel them."

(TPR) reported first-quarter net income of +BRL56.9 million/+$26.7 million, up +21.8% from +BRL46.7 million in the year-ago period, citing increased revenue generated by new long-haul flying and lower fuel costs. First-quarter revenue lifted +17.1% to BRL2.74 billion including a +29.9% hike in gross international passenger revenue to BRL796.9 million. Expenses heightened +13.1% to BRL2.45 billion owing to higher maintenance costs and real depreciation. (TPR) said operating profit more than doubled to +BRL187.8 million from +BRL83.4 million last year.

Compared to its year-ago fleet, the carrier operated three 767s, four 777s and four additional A330s in the quarter, and no longer operated three MD-11s, the last of the type in its fleet to be retired, allowing it to start high-yield daily, Rio de Janeiro Galeao - Miami service; daily, Sao Paulo Guarulhos (GIG) - Orlando flights; and four weekly, (GIG) - New York (JFK) services. Scheduled service international yield jumped +17.4% year-over-year to BRL17.4 cents.

Traffic rose +6.9% to 10.81 billion (RPK)s on a +16.7% capacity boost to 16.1 billion (ASK)s, producing a load factor of 67.1% LF, down -6.1 points. Yield was ahead +6.5% to BRL22.65 cents as (RASK) increased +0.5% to BRL16.39 cents and CASK lowered -3.1% to BRL15.23 cents.

A320-214 (3908, PR-MYE), delivery.

June 2009: TAM (TPR) flew 1.82 billion domestic (RPK)s traffic in May, down -13.9% year-over-year. Capacity rose +11% to 3.2 billion (ASK)s and load factor plunged -16.4 points to 56.7% LF. International (RPK)s rose +10.8% to 1.38 billion against a +25.9% lift in capacity to 2.11 billion (ASK)s. Load factor fell -8.9 points to 65.5% LF.

(TPR) will perform "C" maintenance checks on three A319s and two A320s and a "D" Check on an additional A319 belonging to (LAN) Airlines at its center in Sao Carlos.

(TPR) signed a four-year exclusive repair agreement with (P&W) for A330-223 thrust reversers. (TPR) currently operates 11 A330-223s with (PW4168A) engines.

July 2009: TAM (TPR) flew 1.97 billion domestic (RPK)s traffic in June, up +0.8% year-over-year. Capacity rose +4.7% to 3.05 billion (ASK)s and load factor fell -2.5 points to 64.7% LF. International traffic was up +18.1% to 1.42 billion (RPK)s, capacity rose +25.5% to 2.08 billion (ASK)s and load factor slipped -4.3 points to 68.3% LF.

A320-214 (3972, PR-MYF), delivery.

August 2009: TAM (TPR) flew 2.3 billion domestic (RPK)s traffic in July, up +6.2% year-over-year, against a +4.3% increase in capacity to 3.21 billion (ASK)s. Load factor rose +1.3 points to 71.7% LF. International traffic grew +9.4% to 1.62 billion (RPK)s, capacity was up +19.9% to 2.18 billion (ASK)s and load factor dropped -7.1 points to 74.4% LF.

(TPR) reported that it earned +BRL788.9 million/+$429 million in second-quarter net income on BRL2.4 billion in revenue. It did not provide year-over-year comparisons in the preliminary figures it issued. It was reported last year that (TPR) posted 2008 second-quarter net income of +BRL50.2 million on BRL2.51 in revenue. (TPR) said that its 2009 second-quarter (RASK) decreased -20.9%, while (CASK) declined -10.4%.

(TPR) and Air China (BEJ) announced that they will begin code sharing on flights this month to allow passengers to travel between Sao Paulo (GRU) and Beijing (PEK), via Madrid Barajas (MAD). (TPR) passengers originating at (GRU) will be able to connect to (MAD) - (PEK) Air China (BEJ) flights while (BEJ) passengers originating in the Chinese capital will be able to connect to (MAD) - (GRU) (TPR) flights. Both carriers are members of the Star Alliance (SAL). "This is the first agreement we have made with an Asian company, a fact made more significant by being made with a company that has such an extensive network," (TPR) VP Commercial & Planning, Paulo Castello Branco said.

(TPR) and Amadeus announced in Sao Paulo a 10-year technology partnership to replace multiple legacy applications currently in use by the airline with a single integrated platform based on Amadeus's Altea Customer Management Solution. (TPR) will implement the full package including reservations, inventory and departure control, with the first phase expected to be complete by year end and total implementation within three years. (TPR) expects to generate $60 million in new sales per year over the medium term owing to Altea's increased capabilities, VP Finance & Information Technology (IT), Libano Barroso said. Revenue improvement will be evident by the 2010 first quarter.

Migration to Altea also will benefit clients, staff, travel agents and customers, according to VP Commercial & Planning, Paulo Castello Branco, who noted the upgrade will help smooth (TPR)'s full integration into the Star Alliance (SAL) next April. Altea has been chosen by the (SAL) as its common (IT) platform.

"We believe (TPR) is a very progressive airline," Amadeus VP Airline (IT), Julia Sattel said. "This partnership ensures our footprint in Latin America." Avianca (AVI) began implementing Altea last February and Mexicana (CMA) started in June.

The switch is considered a radical change that will enable (TPR) "to undergo a complete transformation in its processes, operations and (IT) systems," said (IT) Director, Juliana Kfouri. In the first phase, 50 systems will be replaced by the new platform. The airline has a team of some 600 employees involved in the process. Amadeus has 100 staff at its Sao Paulo base plus 50 customization developers at its Bogota Competency Center closely supporting the partnership with (TPR).

(TPR) signed a contract with OceanAir (ONE) to perform "C" and "D" maintenance checks on five F 100s. Work is being done at (TPR)'s Technological Center in Sao Carlos.

TAM (TPR)'s Technological Center received certification from Chile's (DGAC) to service A318 airplanes and components. The (DGAC) earlier certified (TPR)'s Maintenance Repair & Overhaul (MRO) unit to perform maintenance on the other members of the Airbus (EDS) single-aisle family.

A319-132 (4000, PT-TMA), delivery.

September 2009: TAM (TPR) said its Technological Center Maintenance Repair & Overhaul (MRO) unit was certified by the USA (FAA) to work on airplanes registered in the USA, including "C" and "D" maintenance checks. (TPR)'s 4.6-million-sq-m maintenance center is located in Sao Carlos.

Airbus (EDS) announced delivery of the 4,000th A320 family airplane, a 144-seat A319, to TAM (TPR).

October 2009: TAM (TPR) signed agreements with Austrian Airlines (AUL) and bmi (BMA) that allow members of its frequent-flyer program to accumulate and redeem points on flights operated by both airlines.

(TPR) announced that CEO, David Barioni Neto resigned effective immediately. He will be replaced on an interim basis by CFO, Libano Miranda Barroso. Barioni had led the Brazilian airline since November 2007.

November 2009: TAM (TPR) flew 2.39 billion domestic (RPK)s traffic in October, up +22.3% from the year-ago month, against a +9.6% lift in capacity to 3.31 billion (ASK)s. Load factor rose +7.6 points to 72.3% LF. International traffic was up +15.7% to 1.64 billion (RPK)s, while capacity increased +15.2% to 2.09 billion (ASK)s and load factor rose +0.3 point to 78.1% LF.

(TPR) reported third-quarter net income of +BRL213.2 million/+$124.2 million, reversed from a loss of -BRL465.5 million in the year-ago period, citing "a strong recovery" in domestic demand and lower fuel costs. It said domestic demand surged +26% year-over-year as the country's economy improved and business (C) passengers returned. Fuel expenses lowered -36.5%. (TPR) noted that 39% of its revenue and 40% to 50% of its costs are linked to foreign currencies, meaning that the real's resurgence against the USA dollar (+10% improvement in the quarter) had "minimal" overall impact. But it expects long-term dividends from the real's higher value owing to a "strengthening of demand for Brazilians flying abroad."

Third-quarter revenue decreased -17.2% to BRL2.38 billion, while expenses dropped -14.2% to BRL2.32 billion, producing operating income of +BRL60.7 million, down -64.5% from a +BRL171 million operating profit last year, when heavy fuel hedge losses and other charges factored in. Traffic rose +7.6% to 11.2 billion (RPK)s on a +11.4% lift in capacity to 16.08 billion (ASK)s, producing a load factor of 69.7% LF, down -2.5 points.

(TPR) is feeling the impact of the economic downturn and volatile
exchange rates more than its domestic rival Gol (GOT).

Looking ahead, (TPR) management sees “strong improvement” in
international markets and expects domestic yields to rise following recent industry price hikes. This in turn follows “excessive stimulation” amid a fierce price war. At the same time, (TPR) is looking for new ways to help consumers finance air travel by paying in in-stallments while also planning to eventually monetize its fast growing frequent flier plan and maintenance unit. Star (SAL) Alliance membership is also on the agenda for the next quarter,
demonstrated by its cutover to the (SAL) alliance’s Amadeus Information Technology (IT) platform. Presiding over these initiatives will be a new CEO, who should be named shortly.

December 2009: TAM (TPR) announced the acquisition of Pantanal Linhas Aereas, a small regional that operates ATR42s out of Sao Paulo Congonhas. (TPR) said it paid BRL13 million/$7.3 million for the shares.

January 2010: TAM (TPR) announced plans to refurbish the passenger cabins across its entire fleet, both new airplanes and retrofit, including the redesign of all seats, galleys, stowage areas, lavatories and "cabin architecture, where possible." It contracted Priestmangoode of London for the three-year project, which also will feature a uniform redesign.

TAM (TPR) signed a long-term, full-content distribution agreement with Sabre Travel Network.

(TPR) announced the promotion of VP Finance, Management & Information Technology (IT), Libano Mirando Barroso to President. Barroso joined the airline in 2004.

February 2010: TAM (TPR) flew 2.78 billion domestic (RPK)s traffic in January, a +14% increase year-over-year, while capacity rose +8.4% to 3.67 billion (ASK)s and load factor climbed +3.7 points to 75.8% LF. International traffic grew +9.1% to 1.79 billion (RPK)s against a +3.8% lift in capacity to 2.18 billion (ASK)s. Load factor increased +4 points to 81.9% LF.

A319-132s (4163, PT-TMB, 4171, PT-TMC; 4192, PT-TMD), deliveries.

April 2010: (TAM) (TPR) returned to profit in 2009, reporting a +BRL435.7 million/+$241.9 million surplus under (IFRS) that compared to a -BRL1.43 billion loss in 2008 fueled by non-operating items.

Full-year operating revenue fell -7.1% to BRL9.77 billion, driven by a -9.1% decline in ticket sales to BRL9.09 billion. Expenses were cut -3.6% to BRL9.6 billion, resulting in a -69.6% plunge in (EBIT) to BRL169.7 million from the BRL558.9 million earned in 2008. Fuel hedges and losses on foreign currency fluctuations largely were responsible for the company's 2008 net loss.

(TPR) transported 30.4 million passengers last year, up +0.9%, and flew 44.15 billion (RPK)s traffic, up +9%. Capacity climbed +13.4% to 64.72 billion (ASK)s, lowering load factor -2.8 points to 68.2% LF. Its domestic market share slipped -4.8 points to 45.6% and its international share soared +11.2 points to 86.5%. Unit revenue plunged -18.1% to BRL0.151 and yield was down -6.9% to BRL0.23. Unit cost was cut -15% to BRL0.148 but rose +0.3% to BRL0.106, excluding fuel.

(TPR) ended the year with 132 airplanes (21 A319s, 81 A320s, five A321s, 16 A330s, two A340s, three 767s and four 777s). It plans to operate 148 by the end of 2010 (five ATR42s from recently acquired Pantanal Linhas Aereas, 25 A319s, 84 A320s, seven A321s, 18 A330s, two A340s, three 767s and four 777s) and expects to increase its fleet to 155 by the end of 2011. At the start of 2015, it is scheduled to operate 165 airplanes.

Fourth-quarter net loss of -BRL334.1 million was narrowed -73% from a -BRL1.24 billion deficit in the final three months of 2008. Revenue dropped -13.9% to BRL2.5 billion and (EBIT) fell -41.1% to BRL126.2 million.

(TPR) expects domestic (RPK)s to increase +14% to +16% in 2010 and said January and February demand soared +36% year-over-year. It plans to raise capacity +12% this year and add two destinations and expects a load factor of 69% LF. It is targeting a -6% cut in unit cost excluding fuel.

May 2010: TAM (TPR), which just officially became a member of the Star Alliance (SAL), said it will make a decision by the second half of this year on whether to spin off its Maintenance Repair & Overhaul (MRO) subsidiary. "We've already talked to eight to ten possible" buyers, VP Operations & (MRO), Ruy Amparo said. "In about two months from now, we will decide if our (MRO) subsidiary will become a spinoff. We are ready to spin off [MRO]."

TAM (TPR) (MRO) is working to become an Airbus (EDS) Maintenance Competence Center. "We do a lot of (EDS) maintenance work," Amparo said. "We've talked to (EDS) [about becoming an official (MRO) center since 2007]. We have their attention. But Airbus (EDS) takes too long to make its decision." The (MRO) unit generated 13% of its revenue from third-party customers including (LAN) Airlines, for which it performed 13 A320 family "C" checks in San Carlos. It is seeking more third-party (MRO) work. The center, opened in 2001, is located 230 km northwest of Sao Paolo. It employs 1,228 and handled 122 airplane checks last year. The airfield, which has no scheduled air service, is dedicated to heavy maintenance on TAM (TPR) airplanes. (TPR) will start its first heavy checks on its 777-300ER fleet in the second half.

By the end of 2013, (TPR) is expecting to receive its first A350. If the delivery date is pushed back, it is considering adding more A330s. It currently operates 18 A330-200s and has three of the type scheduled for delivery next year. The A350s are slated to replace three 767-300ERs and two A340-500s. In addition to the A330s, (TPR) currently operates 24 A319s, 81 A320s, five A321s, three 767-300ERs, four 777-300ERs, and three A340-500s.

A330-223 (1112, PT-MVS), delivery.

June 2010: TAM (TPR) flew 1.99 billion domestic (RPK)s traffic in May, up +9.4% year-over-year, against a +8.6% rise in capacity to 3.48 billion (ASK)s. Load factor rose +0.4 point to 57.1% LF. International traffic climbed +22.5% to 1.69 billion (RPK)s, capacity lifted +3.1% to 2.17 billion (ASK)s and load factor was up +12.3 points to 77.8% LF.

The Latin American Airline Association (ALTA) announced that TAM (TPR) will operate Latin America's first biofuel demonstration flight in the second half of 2010 using an A320 partially powered by fuel derived from jatropha. The flight will be conducted in conjunction with Airbus (EDS) and (CFM) International. The (CFM56-5B)-powered airplane will utilize biofuel derived from jatropha oil refined by Honeywell (SGC)'s (UOP). According to (ALTA), TAM (TPR) has acquired jatropha seeds from throughout Brazil via the Brazilian Association of Jatropha Producers and will pass along the seeds to (UOP).

TAM (TPR) CEO, Líbano Barroso said, "We have put forth our best efforts to use Brazilian raw materials in the production of this biofuel, with significant economic and social gains. A source of aviation biokerosene, the [jatropha] biomass is 100% domestic, resulting from family agricultural projects and large farms in the hinterlands of Brazil."

(ALTA) added that "considering the natural resources and the favorable climatic conditions [in Brazil], a large amount of degraded pastures might be recovered with this [jatropha] plant. To be able to attain a commercial scale, estimates show that it would be necessary to expand the cultivated surface by about one million hectares, sufficient to service approximately 20% of the domestic consumption."

It said Michigan Technological University/(UOP) tests "show that aviation biofuels made from jatropha . . . can achieve a reduction of greenhouse gas emissions [of] 65% to 80% relative to petroleum-derived jet fuel."

TAM (TPR) signed a Memo of Understanding (MOU) with Airbus (EDS) at the Berlin Air Show for 20 new A320 family airplanes and five additional A350-900s.

If finalized, the deal would bring (TPR)'s total number of A320 family airplanes on order for future delivery to 64 and its A350 orders to 27. It also has three A330-200s on order.

The five A350-900s will be powered by Rolls-Royce (RRC) (Trent XWB) engines. (TPR) did not select an engine for the 20 A320s.

"With this new order, we can offer our customers one of the youngest fleets in the world of aviation," CEO, Libano Barroso said. "Additionally, these new airplanes will allow us to continue our strategy of operating a common fleet throughout our domestic market."

Airbus (EDS) noted that the last five years have marked its "most successful period in Latin America with 325 airplanes sold and a record backlog of more than >230 aircraft orders to be delivered to its Latin American customers. Today, more than >370 Airbus (EDS) airplanes are flying with 23 Latin American airlines, representing more than >40% of the fleet in service."

A320-214 (4320, PR-MYG), sold to RBS Aerospace at delivery and leased back. A330-223 (1118, PT-MVT), ex-(F-WWKS), delivery.

July 2010: TAM (TPR) and Continental Airlines (CAL) reached a code share agreement under which TAM (TPR) will place its code on (CAL)'s Orlando (MCO) and Miami (MIA) service to both Cleveland and Houston Intercontinental (IAH), as well as service to (IAH) from Sao Paulo (GRU) and Rio de Janeiro (GIG). (CAL) will place its code on TAM (TPR)'s (GIG) service to (MIA) and (JFK); (GRU) service to (MCO), (MIA) and (JFK); Manaus - (MIA); (GIG) service to Belo Horizonte, Recife, Vitoria, and Salvador; and (GRU) service to (PLU), Curitiba, Porto Alegre, (SSA), Florianopolis, Foz do Iguacu, Campo Grande, Recife, and Brasilia. The two carriers announced a frequent-flyer partnership in April. "We expect to further consolidate our partnership with TAM (TPR) in the near future," (CAL) VP Latin America & Caribbean, John Slater said.

(TPR) selected Pratt & Whitney (PW4000-100) Advantage70 engines to power two new A330-200s in a deal valued at more than >$100 million. The contract includes installed and spare engines and a 12-year service agreement provided by Pratt & Whitney Global Service Partners.

TAM (TPR), the largest Airbus (EDS) operator in Latin America, finalized a Memo of Understanding (MOU) for 20 A320 family airplanes and five A350-900s announced at the ILA Berlin Air Show in June. TAM's (TPR) A350s will be powered by (Trent XWB)s; engine selection for the A320s was not announced.

The commitment brings (TPR)'s total Airbus (EDS) order book to 176 comprising 134 A320 family airplanes, 15 A330-200s and 27 A350 XWBs. Undelivered backlog consists of 65 A320 family airplanes, two A330-200s and 27 A350 XWBs.

“We have the commitment to offer our customers one of the youngest fleets in the world of aviation,” said (TPR) CEO, Líbano Barroso. Airbus (EDS) noted that more than +370 (EDS) airplanes are flying with 23 Latin American airline customers and operators, representing more than >40% of the fleet in service.

A319-132 (4389, PT-TME), ex-(D-AVXH), and 2 A321-231s (4352, PT-MXF; 4358, PT-MXG), ex-(D-AVZC; & D-AVZK), deliveries.

August 2010: Two of Latin America’s most significant airline groups, Chile’s (LAN) Airlines and Brazil’s TAM Linhas Aéreas (TPR), have unveiled plans to form the region’s largest operator. Few details about the merger are being disclosed, but if approved, it will create a company with more than >40,000 employees and operations to 115 destinations in 23 countries.

To emphasize the potential size of the new company, the combined entity will be named LATAM Airlines Group, although the two companies will operate as separate brands. Under a memorandum of understanding (MOU) revealed late August 13, TAM (TPR) will be folded into (LAN), with shareholders in the Brazilian company gaining 0.90 (LAN) shares for every one they currently hold.

A management structure has already been agreed, with (LAN) CEO, Enrique Cueto retaining that role at the new parent company. Mauricio Rolim Amaro, head of TAM (TPR)’s board of directors, will serve as LATAM’s Chairman. Maria Claudia Amaro also remains as Chairman at TAM Airlines (TPR), while (TPR) President & CEO, Marco Bologna will retain his CEO responsibilities. Libano Barroso will also continue as President of (TPR), TAM Airlines (TPR)s’ parent company.

The prospective (LAN) Airlines/TAM (TPR) merger, if it is cleared by both companys' shareholders and relevant regulators, will create a new airline company that aims to be the dominant operator in Latin America and a formidable presence on the world stage, with a major battle over alliance membership likely on tap.

The all-stock transaction, which the airlines aim to complete in the first half of next year, is valued at $3.7 billion and would create a parent company, the LATAM Airlines Group, with combined annual revenue of $8.5 billion. Executives made clear that the intent of the merger is to build a platform for future growth.

"Together, (LAN) and TAM (TPR) will be able to offer new destinations that neither company could have supported on its own," (TPR) CEO, Marco Bologna said. "This will position us to compete with the many foreign carriers that continue to increase service to our region."

(LAN) already operates affiliate carriers in Peru, Argentina, and Ecuador, and in May announced that start-up Colombian carrier "Aeroasis" will become part of the (LAN) group of airlines, all of which will come under the LATAM umbrella. (LAN) CFO, Alejandro de la Fuente said the networks of (LAN) and (TPR) "are highly complementary with little overlap." He added that in addition to a passenger network spanning 115 destinations in 23 countries, LATAM will offer "the most comprehensive cargo network in Latin America."

The airlines said LATAM will provide "seamless passenger and cargo services across the continent and around the world," but executives did not say in which airline alliance (LAN)/(TPR) would be a member. (LAN) is in the Oneworld (ONW) alliance, while TAM (TPR) joined the Star (SAL) Alliance in May. (LAN) CEO and designated LATAM CEO, Enrique Cueto said the airlines "don't have an answer to that question" presently.

"There are hundreds of millions of dollars at stake when measured in access to almost the entire South American market,"the Centre for Asia Pacific Aviation (CAPA) said in an analysis of the proposed merger and its global implications. It said (LAN) is the "driver" behind the merger and will ultimately make the call on which alliance the group will be a part of, possibly favoring the Oneworld (ONW) alliance.

"But merely dumping the Star (SAL) alliance is not a decision to be taken lightly," it stated. "TAM (TPR) has many valuable linkages throughout the Star (SAL) alliance grouping."


A319-132 (2467, PT-TMF), (ILF) leased, ex-(D-ABGB). F 100 (11441, PT-MRL) to TAM Museum at Sao Carlos.

September 2010: SEE ATTACHED "TPR-2010-09-LAN MERGER" regarding new LATAM Airlines Group (described last month).

A320-214 (4446, PR-MYI), delivery.


November 2010: (TAM) (TPR) President, Libano Miranda Barroso said in Panama City that the planned (TAM)/(LAN) Airlines merger will "have some similarity to the [British Airways (BAB)] and Iberia (IBE) merger" with both carriers' brands continuing to exist.

The all-stock transaction, which the airlines aim to complete in the first half of next year, is valued at $3.7 billion and would create a parent company, the (LATAM) Airlines Group, with combined annual revenue of $8.5 billion. Relevant papers recently were submitted to the Brazilian National Civil Aviation Agency, or (ANAC), the airlines have stated.

Observers around the world are wondering which alliance the combined airline company will choose. (LAN) is in the Oneworld (ONW) alliance while (TAM) (TPR) joined the Star (SAL) Alliance in May.

Barroso, in Panama City for the recent (ALTA) meeting, said no decision regarding alliance membership has been made. "We have to look at the big picture," he said of the ongoing deliberations on the issue. "It is important to have a strong alliance." (LATAM) would have a market-share of about 50% in South America, prompting the Centre for Asia Pacific Aviation to comment that "there are hundreds of millions of dollars at stake" in regards to which alliance (LATAM) joins.

Barroso said the alliance decision could take "up to two years" to make, adding that it is "possible" (LATAM) could remain a member of both alliances.

Star (SAL) Alliance CEO, Jaan Albrecht said dual membership can't be ruled out. "Everything is possible at this stage," he explained. "It depends especially on what makes sense for the customer and how deep the integration of [(LAN) and (TAM)] goes."

International Aero Engines (IAE) announced it has won an order valued at more than >$300 million with TAM Airlines (TPR) for (V2500) engines to power seven A321 and three A319 airplanes. The order includes a long-term aftermarket services agreement. The airplanes will enter service from 2011. Separately, Rolls-Royce (RRC) valued its share of the engine order at more than >$100 million.

December 2010: The USA Department of Transportation (DOT) announced that the USA and Brazil have agreed to enter into a phased-in "open skies" aviation agreement, which will “significantly liberalize” USA - Brazil air services for airlines of both countries over a transition period. The agreement will take full effect in October 2015.

According to the (DOT), the agreement "immediately removes restrictions on pricing and on the routes between each country served by the USA and Brazilian airlines." It also provides immediately for full code share rights and additional charter flexibility. "Between October 2011 and October 2014, USA carriers will be allowed to operate significant increases in scheduled combination, all-cargo and charter flights, including additional services to the currently restricted and highly congested Sao Paulo and Rio de Janeiro airports," the (DOT) said.

USA Transportation Secretary, Ray LaHood said the agreement means that travelers, shippers, airlines and economies of both the USA and Brazil "will benefit from competitive pricing and more convenient service." Brazil will become the 101st USA "open skies" partner.

Airbus (EDS) together with TAM Airlines (TPR) and a group of specialist companies are working to establish a bio-kerosene jet-fuel processing plant in Brazil, aiming to gradually substitute fossil fuel in aviation with biofuel. On November 22nd a major milestone was accomplished when (TPR) and (EDS) performed the first Jatropha-based biofuel flight in Latin America.

MTU Maintenance Hanover extended its existing contract with TAM (TPR) by covering +57 additional (V2500) engines for (TPR)'s A320-family fleet. The volume of the contract is expected earn an additional €500 million/$652.8 million by 2019.

January 2011: SEE ATTACHED "TPR-2011-01-2010 WORLD TOP TRAFFIC."

Brazilian aviation authorities report a more than >20% year-on-year increase in air travel, with start-up carriers recording the biggest growth rates. Domestic travel increased +23.5% and international activity +20.4%, the civil aviation authority says. Load factors on domestic flights came in at 68.8% LF, up from
65.8% LF, with loads on international rates climbing to 76.4% LF from 69.2% LF.

TAM (TPR) remains the market-dominating carrier, with 42.8% of domestic operations, followed by GOL (GOT) at 39.5%. Each
carrier posted year-on-year growth of about +16%. Low cost carrier (LCC) Azul, now the third-largest carrier with 6.1% market share, experienced growth of more than >100%. Rival WebJet (WEB)’s growth rate was +64%, representing 5.9% market share.

Azul (AZL)'s home base at Sao Paulo Viracopos-Campinas International airport (VCP) is expanding, but downtown airports at Sao Paulo and Rio de Janeiro are not.

TAM (TPR) has more airplanes now than any other Brazilian airline ever, including Varig (VAR) at its peak.


February 2011: Chile's anti-trust court (TDLC) has accepted a request by the consumer rights organization (CONADECUS) to investigate the competitive impact of the planned merger between (LAN) and TAM (TPR) and has ordered to "suspend the process" while it conducts an investigation. While the Chilean Public Prosecutor for Economic Matters opened immediately after the merger plans were first announced by (LAN) and (TPR) last August, a case to investigate, and eventually limit, the deal's impact on the Santiago - Sao Paulo trunk route, the (CONADECUS) request broadens the investigation to the overall market situation in Chile.

According to (CONADECUS), the merger may "generate a severe and negative impact to competition which goes much beyond the Santiago - Sao Paulo route", claiming that the court should take into account not only a single route, but also the general consequences for the travel market. A (CONADECUS) spokesman says that "(LAN) has a history of dominating the market where it operates" and that the (TLDC) should take into account "the principles of free competition and consumer rights" from a global perspective. He adds that "(LAN)'s historic relations with competitors have frequently been inadequate," suggesting that (LAN) tries to create de-facto monopolies to raise fares.

The (TLDC) has accepted the (CONADECUS) request for investigation and has therefore suspended the (LAN) - (TPR) merger process during the information collecting and internal decision period.

According to its official bulletin, it has invited the Chilean Public Prosecutor for Economic Matters, the Ministers of Transport and Economy, the Civil Aviation Authority, the National Tourism Agency, (IATA) Chile, travel agent associations as well as airlines operating within or to and from Chile to submit their opinions and requests regarding the planned merger within 30 days.

A (LAN) spokesman says the airline group is "aware of the matter" but declined to comment on it. (LAN) executives told analysts they hoped to complete the merger transaction in six to nine months. But they warned the deal was still contingent on approval from competition authorities in several countries including Chile, Argentina, Brazil, Germany, Italy and Spain.

OnAir, under an expanded contract, will install its on-board connectivity system in 26 TAM (TPR) airplanes following a "successful pilot project" with (TPR). Passengers will have access to voice, Short Message Service (SMS), and Internet on their BlackBerrys and Smartphones, making (TPR) the first airline in the Americas to offer on board mobile calling services.

The airplanes: A319s, A320s and A321s, are expected to begin flying in the second half of this year, on domestic routes. The system will be installed at (TPR)'s Technological Center in Sao Carlos, State of Sao Paulo. "The high use of on-board connectivity by our passengers has encouraged us to invest further," (TPR)'s Marketing Officer, Manoela Amaro said. "We noted our clients want and need to be connected while flying."

Since October 2010, one A321 has been equipped with the OnAir system, which allows up to eight (TPR) passengers to make and receive calls simultaneously on a flight, with no limits on data and text messaging. (TPR) has technical approval from the Brazilian National Agency of Civil Aviation; the system has also been certified by the European Aviation Safety Agency and approved by the European Union (EU).

March 2011: TAM (TPR) signed a Memo of Understanding (MOU) with Airbus (EDS) to order 32 A320s, including 22 A320neos, and also ordered two additional 777-300ERs.

(TPR) becomes the third airline to commit to (EAD)'s re-engined narrow body slated for a 2016 Entry Into Service (EIS), following Virgin America (VUS), which has a firm order for 30 A320neos, and IndiGo (IGO), which has signed a (MOU) to place an order for 150. As was the case with the previous two, (TPR) did not announce an engine choice between Pratt & Whitney's (PW1000G) and (CFM)'s (Leap-X).

The A320neo "opens a world of possibilities for (TPR), thanks to its substantially increased range capability," (TPR) CEO, Líbano Barroso said in a statement. "Ordering more A320s allows (TPR) to reduce costs and further improve our environmental performance."

TAM (TPR)'s order for two additional 777-300ERs, valued by Boeing (TBC) at $568 million at current list prices, brings the total number of 777s (TPR) has on order to 12. Libano Barroso, President said, "The 777-300ER provides us the performance and versatility we need to develop our network competitively and capitalize on robust international traffic growth."

(TPR) is in the process of merging with (LAN) Airlines under the (LATAM) Airlines Group.

The merger of (LAN) Airlines and TAM (TPR) under the (LATAM) Airlines Group, which had seemingly been headed for a smooth conclusion this year, hit a possible roadblock when the Chilean antitrust (ATI) tribunal, (TDLC) announced it would investigate the proposed combination. A Chilean consumer group filed a petition against the merger with the (TDLC) that the carriers had pushed the panel to reject. But the (TDLC) said the group's complaint was worthy of hearing, necessitating an "investigation" into whether the new airline grouping would violate Chilean antitrust (ATI) regulations. The probe could last all of 2011, the (TDLC) noted. That timetable casts doubt on whether the merger can close this year as planned.

May 2011: TAM Linhas Aereas (TPR), which has announced an agreement to merge with (LAN) Airlines, reported first-quarter net income of +BRL128.8 million/+$78.6 million, a major turnaround from a loss of -BRL70.9 million in the year-ago period.

Total operating revenue rose +16.8% to BRL3.04 billion, driven by a +7.2% rise in passenger revenue to BRL2.21 billion and growth at (TPR)'s separately traded loyalty program Multiplus, which saw a 456% year-over-year rise in revenues to BRL227 million.

Operating expenses climbed +16% to BRL2.93 billion, paced by a +33% rise in fuel costs to BRL1.06 billion. Operating profit before accounting for fuel hedges climbed +43.5% to BRL110.2 million from BRL76.8 million last year. (TPR) booked a +BRL55.8 million gain on its fuel hedges in the quarter, versus a loss of -BRL10.4 million in the 2010 period.

The number of passengers carried climbed +11.9% to 9.3 million. (TPR) said that total yield rose +1.4% to BRL0.22. Revenue per (ASK) heightened +3.9% to BRL0.16, while cost per (ASK) was BRL0.15, up +3.1%. (CASK) ex-fuel declined -3.8% to BRL0.10.

In March, the merger of (LAN) Airlines and (TPR) under the (LATAM) Airlines Group, which had seemingly been headed for a smooth conclusion this year, hit a possible roadblock when Chilean antitrust tribunal (TDLC) announced it would investigate the proposed combination.

June 2011: (LAN) Airlines CEO, Enrique Cueto said he expects Chilean antitrust tribunal (TDLC) to complete its investigation into the merger between (LAN) and TAM (TPR) under the (LATAM) Airlines Group and approve the deal by the middle of July, enabling the transaction to close before the end of 2011.

Cueto said that if the anticipated ruling is appealed to the country’s high court, it could take another three months, pushing the closing into 2012. Cueto told media that (LAN) has offered significant concessions on the Santiago - Sao Paulo route, where the carriers have a combined 90% share. (LAN) has offered to raise capacity +10% per annum over the next five years, while lowering fares -10% each year as well. It is also offering airport slots to potential new entrants as well as interline and frequent flyer reciprocity.

August 2011: TAM Airlines (TPR) increased daily, Orlando - Sao Paulo service to twice-daily. Jet Blue Airways (JBL) and TAM Airlines (TPR) have reached a new interline partnership, allowing customers to purchase a single e-ticket itinerary combining flights on both carriers' networks.

The (LAN) - TAM (TPR) Airlines merger has moved a step closer after the antitrust unit of Brazil's Finance Ministry gave its OK. This approval is the first of three hurdles to overcome in Brazil. A ruling from Chile is also awaited.

TAM (TPR) said it will install OnAir Wi-Fi services across its entire long-haul fleet starting in the second half of 2012. (TPR) explained that the decision follows “nine highly successful months in which passengers have enjoyed the chance to make phone calls, send and receive text messages and emails, and access the Internet on selected (TPR) short-haul flights.” (TPR) already is in the midst of incorporating onboard connectivity into its domestic operations.

(TPR) said a total of 80 airplanes will be equipped with OnAir’s services over the next few years, including 31 short-haul airplanes, out of which four are already in service. Regarding the long-haul fleet, “OnAir's connectivity services, based on Inmarsat’s SwiftBroadband, will be deployed on (TPR)’s 12 777-300ER airplanes (four already in the fleet and eight to be received by 2014), as well as on 10 A330s and 27 A350s (to be delivered between 2014 and 2018),” (TPR) said in a statement.

September 2011: Chilean antitrust tribunal (TDLC) approved the merger of Chile's (LAN) Airlines and Brazil's TAM (TPR), though it cautioned that the carriers must agree to a number of conditions before combining under the (LATAM) Airlines Group, the single holding company that will own them both.

(LATAM) will operate passenger and cargo flights to 115 destinations in 23 countries with more than >280 airplanes. It will employ more than >40,000 workers. The airlines plan to maintain independent brands following the combination. (LATAM) would become one of the largest airline companies in the world with annual revenue of around $8.5 billion.

The conditions set by (TDLC) include the disposing of four daily slot pairs at Sao Paulo Guarulhos (GRU), to be turned over to airlines seeking to start or increase (GRU) - Santiago de Chile service. They also would force (LATAM) to exit the Oneworld (ONW) or Star (SAL) Alliance. (LAN) is in Oneworld (ONW) while (TPR) joined the Star (SAL) Alliance in May 2010. The battle over which alliance the mega-airline will participate is likely to be intense, with considerable market penetration in Latin America at stake. Among other conditions set by (TDLC), (LAN) will have its access to the Lima market restricted.

The airlines were not ready to say whether they will agree to the conditions. "The antitrust court's resolution is complex and considers a series of mitigating measures," (LAN) and (TPR) said in a joint statement. "Therefore, both companies are currently analyzing in depth the implications and impact of the measures imposed by the court. (LAN) and (TPR) will publically communicate the companies' position regarding the antitrust court's resolution and its various mitigating measures as soon as possible."

Passengers will, in around a year, be able to use their mobile devices aboard (TPR)'s entire longhaul fleet. This follows a 9 month trial where passengers enjoyed the chance to make phone calls, send and receive text messages and emails, and access the Internet.

October 2011: TAM (TPR) Maintenance Repair & Overhaul (MRO) announced a five-year goal to expand third-party services by +20% annually. An internal strategic move to reach this goal comprised management readjustment of linking this (MRO) business unit directly to the holding company, TAM S.A. Additional tactics are improving services, upgrading facilities and finding new strategic partners.

Between January and September, the company reported an increase of 240% in third-party services provided.

“Third-party services correspond to 15% of our revenues,” said Executive-Director, Luis Gustavo Silva, “but now we want its share to grow to 40% by 2016."

November 2011: TAM Airlines (TPR) will revamp its 777 airplanes by installing an all-new cabin configuration with the delivery of its fifth 777-300ER next year. “We will get four new 777s in 2012, two in 2013 and two in 2014,” featuring new products in all classes, “including lie-flat seats in business class (C),” (TPR) President, Libano Miranda Barroso said. He did not confirm if (TPR) will also install a fourth class, premium economy (PY) section.

TAM (TPR) offers first- (F), business- (C), and economy-class (Y) on its long-haul 777 fleet, which will increase to 12 airplanes by 2014. “The airplanes will fly on North American and European routes. Our A330 fleet will also be featured with the new product,” (TPR) holding group CEO, Marco Antonia Bologna said, noting that the airline needs to improve its brand.

Barroso said (TPR) must strengthen its visibility in the market, and that membership in an alliance will “help to improve our brand outside Latin America.”

TAM (TPR) has approximately 30 airplanes on order, scheduled for delivery through 2022. “In 2016, we expect the first A320neo delivery — the A350, beyond 2015,” Barroso said, noting that a six-month delay should have no impact for (TPR). “The A350 is still in our [time delivery] plan,” he said. Bologna doesn’t believe that very large airplanes, such as the 747-8I or A380, have a market in Brazil. “There is no consideration of this type of airplane,” he said.

(TPR) reiterated last month it is still on track to close the merger with (LAN) Airlines by the 2012 first quarter.

December 2011: Brazil’s Council for Economic Defense (CADE) has approved the merger between Chile’s (LAN) Airlines and Brazil’s TAM (TPR) in a unanimous vote.

The antitrust regulator imposed two conditions before allowing the carriers to combine under the (LATAM) Airlines Group, the single holding company that will own them both. The airlines must give up two slot pairs at Sao Paulo Guarulhos for the Sao Paulo - Santiago route and exit either the Oneworld (ONW) or the Star (SAL) Alliance. (LAN) is a (ONW) Alliance member and (TPR) is part of the Star (SAL) Alliance.

(LAN) and (TPR) said “both conditions are in line to what (LAN) offered to the Chilean Fiscalía Nacional Economica last January, through an out-of-court agreement and were afterward reiterated by Chile’s antitrust court.”

The carriers said the regulation approval process for the merger is now complete in Brazil and the merger will close in the first quarter of 2012.

(LAN) Airlines shareholders approved (LAN)'s planned merger with Brazil's TAM (TPR) under the (LATAM) Airlines Group, taking another step toward the expected completion of the combination early next year. (LATAM) will control more than >40% of the Latin American air passenger market.

The transaction will take the form of an all-stock exchange in which (TPR) shareholders will be offered 0.9 shares of common stock of (LATAM) for each share of TAM (TPR). (TPR) shareholders cleared the merger in a December 23 vote.

Antitrust regulators in Chile and Brazil have given conditional approval of the transaction, and (LAN) expects a ruling from the Chilean Supreme Court in January on its appeal of some of the requirements set by the Chilean antitrust tribunal (TDLC). That will allow for the merger to be finalized by the end of the 2012 first quarter, according to (LAN).

January 2012: (LAN) Airlines and TAM Airlines (TPR) said their planned merger under the (LATAM) Airlines Group, expected to be completed by the end of March, will produce even more synergies than previously expected. The carriers last week revised upward from $400 million per year to $600 to $700 million annually the value of the synergies expected to result from a merger that will create a mega-airline group controlling more than >40% of Latin America's air passenger market.

The $600 to $700 million annual figure won't be realized until four years after the completion of the merger transaction, but the airlines believe $170 to $200 million will be achieved within a year of the combination's finalization.

The higher synergy estimate "reflects further revisions and updates of the expected combined cost savings and revenue generating opportunities arising from the proposed combination and includes best practice sharing benefits that have been identified in certain areas," the carriers said in a statement.

Breaking down the numbers further, (LAN)/(TPR) said approximately 40% of the potential synergies will come from increased passenger revenue ($225 - $260 million), +20% from higher cargo revenue ($120 to $125 million) and 40% from cost savings. According to (LAN)/TPR), expense savings will come from consolidating frequent flyer programs ($15 to $25 million), coordinating airport and procurement activities ($100 to $135 million), improved maintenance efficiency ($20 to 25 million) and information technology system convergence ($120 to $130 million).

The synergy estimates do not count one-time merger costs of $170 to $200 million expected to be incurred by (LAN)/(Tpr). But those costs will be somewhat offset longer-term by reduced investments of around $150 million for engine and spare part purchases that will be avoided because of the merger.

February 2012: (TAM) Linhas Aéreas (TPR) said it reached a record passenger load factor of 81.4% LF on international routes last year, resulting from a +12.7% growth in (RPK)s and a +10% growth in (ASK)s. Its international market share reached 88.1% among Brazilian carriers.

According to the National Civil Aviation Agency, Grupo (TAM) (TPR) retained its position as domestic market leader with a 41.2% market share, followed by GOL (GOT)/Varig (VAR) (37.4%), Azul (AZL) (8.5%) and Avianca (AVI) (3.1%). (TAM) (TPR)’s domestic market share grew +1.2% points, up to 68.8% as a result of a +11.5% rise in (RPK)s and a +9.5% increase in (ASK)s.

In its 2012 market guidance, (TAM) (TPR) predicts an international load factor of 83% to 85% LF.

(TAM) (TPR) will not open new routes in 2012 and will downsize its fleet from 159 to 157 airplanes, comprising 33 wide body and 124 narrow body airplanes. It estimates (ASK) growth this year of between zero and 2% on the domestic side, and 1% to 3% on the international side.

The board of (TAM) (TPR) has approved previously announced plans that entail (CEO) Libano Barroso becoming (CFO) of the holding company being created as a result of the (LAN) - (TAM) (TPR) merger. Other changes include Marco Antonio Bolonga, (CEO) of TAM's holding company, assuming the CEO role at TAM Airlines.

Once the merger is complete, current (LAN) (CEO), Enrique Cueto will become (LATAM)'s (CEO), while (LAN)'s (COO), Ignacio Cueto will become (LAN)'s (CEO).

(LAN) recently said it expects to close the merger in April. (LATAM) will be the holding company for the merged entity.

Thirteen new A320 family airplanes will join the fleet in 2012, as well as four 777s, replacing existing older airplanes. An A330 previously scheduled to be returned this year, will remain in the fleet.

April 2012: Aeromexico (AMX) and (TAM) Airlines (TPR) have reached a code share agreement to operate flights between Mexico City and Sao Paulo as well as connections to destinations in Brazil and Mexico, which launched April 23.

(LAN) Airlines said that Chile’s Supreme Court has confirmed Chilean antitrust tribunal (TDLC)’s approval of (LAN)’s proposed merger with Brazil’s TAM (TPR) under the (LATAM) Airlines Group, though the court rejected (LAN)’s appeal of three of the 14 conditions imposed on the merger by (TDLC).

The Supreme Court ruling is believed to be one of the final steps toward closing the transaction.

(TDLC) tied its approval of the merger, issued last October, to a number of “mitigation measures.” The measures appealed to the Supreme Court by (LAN) included restrictions to (LAN)’s access to Lima, a requirement pertaining to code share agreements and a mandate for (LAN) to give “unrestricted” access to much of its internal data to an outside consultant.

The court rejected the appeals, none of which involved issues considered critical to the combination’s completion, but cleared the merger. (LAN) said it would “continue to move forward with the merger,” but did not provide a specific closing date.

(LAN) and (TAM) (TPR) are currently expected to have their merger completed in early June from when both carriers and their subsidiaries would start operating under the jointly managed holding (LATAM) Airlines Group, based in Santiago de Chile and owned by (LAN) and (TPR) shareholders.

June 2012: (LAN) Airlines and (TAM) (TPR) have extended to June 21 the share exchange offer, part of the merger process between the two carriers under the (LATAM) Airlines Group. The extension will give more time for shareholders to sign up for the exchange.

To complete the process, (TPR)’s controlling shareholders have to reach 95% of the outstanding (TPR) shares. However, the carriers fell short at the first exchange attempt, reaching only 94.4%.

The move comprises a new entity, Holdco II, which will be merged into (LAN).

(LAN) Airlines and (TAM) (TPR) officially completed their merger under the (LATAM) Airlines Group on June 22nd, creating a mega-airline company that is expected to control more than >40% of the Latin American air passenger market.

The transaction was carried out through an exchange offer in which (TPR)’s shareholders received 0.9 (LAN) shares for each (TAM) (TPR) share. “The creation of this group of airlines is an opportunity to take South America to the world and to allow us to position ourselves to operate in an increasingly competitive environment due to the continuing consolidation of the global airline industry,” (LATAM) (CEO), Enrique Cueto, who was formerly (LAN)’s (CEO), said.

(LATAM) will initially employ more than >51,000 workers and connect passengers to 150 destinations in 22 countries. The group’s cargo operation will reach 169 destinations in 27 countries.

Cueto said (LAN) will remain based in Santiago de Chile and (TAM) (TPR) in Sao Paulo. He added that the carriers will continue to operate under separate brands. “This is the beginning of a long journey and the benefits to our customers will be added gradually as the integration of our companies’ progresses,” he said.

(LAN)/(TAM) believes the merger will generate $600 - $700 million in annual synergies within four years.

Gol Linhas Aéreas Inteligentes (GOT) has announced plans to completely pull out of Santiago de Chile Arturo Merino Benítez International airport (SCL) by October 3. It will already terminate its daily service from Porto Alegre Salgado Filho International airport (POA) to the Chilean capital on August 16 and then give up its daily São Paulo Internacional Guarulhos (GRU) - Buenos Aires Ezeiza Ministro Pistarini (EZE) - Santiago de Chile Arturo Merino Benítez International (SCL) flight from October 3. This will leave (LATAM), the new parent of (LAN) Airlines and TAM Linhas Aéreas (TPR) with a monopoly of direct flights between Brazil and Chile.

July 2012: (LAN) Airlines and (TAM) (TPR), which completed their merger under the (LATAM) Airlines Group last month, will decide which alliance to join “not before the first half of 2013,” (LATAM) General Manager Europe, Francisco Vidal told local media.

(LATAM)’s alliance choice has been a key issue throughout the transaction process, as the merged entity has created a mega-airline company that is expected to control more than >40% of the Latin American air passenger market.

(LAN) is a Oneworld (ONW) alliance member, while (TAM) (TPR) is a Star (SAL) Alliance member. An option would be to choose a third alliance.

Simultaneously, the two airlines will keep their own respective brand names for the next two years, after which (LATAM) will decide whether to create a new joint brand name.

Regarding fleet expansion, (LATAM) has 240 firm orders, including 32 787s, and plans to operate 500 airplanes by 2020. Five A340s will be phased out by 2014.

Within the next two years, (LATAM) will launch services to four new European destinations, taking advantage of its favorable market position in services between Latin America and destinations in Spain, France, Italy, Germany and the UK. (LAN) currently only serves Frankfurt International (FRA) and Madrid Barajas (MAD) airports, while (TAM) (TPR) also flies to London Heathrow (LHR), Milan Malpensa (MXP) and Paris Charles de Gaulle (CDG) airports, besides also serving Frankfurt and Madrid.

2 A320-214s (5209, PR-MYU; 5222, PR-MYV), ex-(F-WWBJ & D-AZAK), deliveries

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August 2012: The (LATAM) Airlines Group, the created merger between (LAN) Airlines and (TAM) (TPR), reported a +7.9% growth in system wide (RPK)s for July against a +2.9% growth in (ASK)s. Passenger load factor increased +3.9% points to 83.6% LF.

Both (LAN) Airlines and its subsidiaries, and (TAM) (TPR) and its subsidiaries, began operating as (LATAM) on June 22. Respective brand names remain active.

Boarding passenger numbers grew +10.1% to six million.

Domestic passenger traffic data was split in two groups. The first group is made up of operations in Spanish-speaking markets, comprising Argentina, Chile Colombia, Ecuador and Peru, where (RPK)s increased +24.7% against a +22.4% growth in (ASK)s. The second group involved Brazil´s domestic traffic, which rose +10.1% in (RPK)s against a decrease of -1.4% in (ASK)s. International traffic data, jointly comprised of both (LAN) and (TAM) (TPR)’s regional and long-haul routes, rose +2.6% in (RPK)s, against a +1.6% increase in (ASK)s.

Cargo traffic, which was reported for (LAN)’s operations only, showed a -4.5% decline in (RTK)s against a -2.8% slip in (ATK)s. The disappointing cargo results were attributed to weaker imports into Latin America, while stronger demand for commodities from South America partially contributed to avoid a worse decline.

The (LATAM) Airlines Group reported a second-quarter net income of +$49.7 million and an operating income of +$23.2 million, its first consolidated results since (LAN) Airlines and (TAM) (TPR) merged June 22. Numbers comprise the eight days of consolidation in June, which produced a net income of +$46.3 million but an operating loss of -$13.9 million.

These non-operating results in the June 23 - 30 consolidated period are due to a +$57.4 million foreign exchange gain produced by an appreciation of the Brazilian real and “a positive mark-to-market of fuel hedging derivatives in the amount of $26.7 million,” the company said in its report.

Reduced cargo demand was a key factor in its first results, offset by sustained domestic market capacity in Brazil and solid passenger demand in most other Latin American markets.

In separate numbers and excluding the consolidation, (LAN) posted a second-quarter net income of +$5.2 million, a decrease of -67.5% compared to the year-ago period. Operating income decreased -33.5%, but reached +$37.1 million. The transaction costs related to the merger with (TAM) (TPR) reached $9.2 million. (TPR) reported a separated -BRL$928.1 million/-$459.4 million second-quarter net loss, against a +BRL$60.3 million net income last year. It reported an operating loss of -BRL$284.2 million, against a +BRL$8.8 million profit in the year-ago period. A 23.2% depreciation of the Brazilian real heavily impacted the results.

(LATAM) reported a +7.9% growth in system wide (RPK)s for July against a +2.9% growth in (ASK)s. Passenger load factor increased +3.9% points to 83.6% LF.

As part of its ongoing move toward the expected merger synergies, (LAN) and (TPR) have established joint fare combinability, cross selling of flights and code shares on several international routes. Pretax synergies are expected to reach between $170 million and $200 million for the first 12 months, and between $600 million and $700 million per year beginning four years after the merger. Total expected synergies are to be 40% derived from revenues increase in the international passenger segment, 20% from revenues increase in cargo business and 40% from cost savings.

The (LATAM) Airlines Group (LAN)/(TPR) announced that Libano Barroso has left his position as (CFO) of the Group. Barroso will remain as (VP) (TAM) (TPR), advising (TPR) (CEO), Marco Bologna. Alejandro de la Fuente will become interim (CFO). De la Fuente has been the (CFO) of (LAN) Airlines since 1995.

Iberia (IBE) Cargo has been selected by TAM Linhas Aereas (TPR) to serve as its new freight handling agent in Spain.

September 2012: The (LATAM) Airlines Group, the merger between (LAN) Airlines and (TAM) (TPR), reported a +9.1% increase in system wide traffic (RPK)s for August against a +1.3% growth in capacity (ASK)s. Load factor was 79.3% LF, up +5.6 points.

International traffic grew +5.2%, while capacity increased +1.4%, achieving a load factor of 82.7% LF, up +3 points.

The (LAN) domestic markets of Argentina, Chile, Colombia and Ecuador reported traffic rose +16.4% against a +13.8% growth in capacity, reaching a load factor of 79.9% LF, up +1.8 point. In Brazil, traffic grew +12.6%, while capacity decreased -2.8%, resulting in a load factor of 74.4% LF, up +10.2 points.

(LAN) cargo (LCO) traffic fell -1.2%, as capacity decreased -1.9%. Load factor was 68.3% LF, up +0.5 point. (LATAM) cited “weaker imports into Latin America” for the decrease.

TAM Airlines (TPR) will launch previously announced daily, Rio de Janeiro Galeao - Orlando service on October 29, 15 days sooner than originally planned.

(TPR) (CEO), Marco Antonio Bologna has announced plans to decrease its domestic A320 family fleet by 5 airplanes in 2013 and to cut the number of domestic flights within Brazil by -7%. (TAM) (TPR) currently operates a total of 114 out of 129 A320 family airplanes predominantly on domestic flights.

(TPR) is planning to retire its three 767-300ERs from its fleet by mid-December with the last flight scheduled to take place on December 17. (TPR) currently operates the airplanes on routes from Belo Horizonte Tancredo Neves International (CNF), Brasilia Presidente Juscelino Kubitschek International (BSB), Manaus Eduardo Gomes International (MAO) and Rio de Janeiro Galeão Antônio Carlos Jobim International (GIG) to Miami International (MIA). A330-200s will be used on these routes instead that will be freed up from other routes thanks to the delivery of three additional 777-300ERs this year. (TPR) will then operate a long-haul fleet of 21 A330-200s and 8 777-300ERs by the end of this year.

777-32WER (38887, PT-MUF), delivery - - SEE PHOTO - - "TPR-FIRST CLASS CABIN - 2012-09."

October 2012: The (LATAM) Airline Group, the merger of Chile’s (LAN) Airlines and Brazil’s TAM (TPR) Airlines, reported a +8.9% increase in system wide traffic (RPK)s for September against a +2% increase in capacity (ASK)s. Load factor was 80.4% LF, up +5.1 points, mainly due to a +13.7 point domestic increase in Brazil.

International traffic grew +5.6% in (RPK)s, while (ASK)s grew +6.1%, resulting in a slight -0.4 point decrease to 82.8% LF load factor.

The South American markets of Argentina, Chile, Colombia, Ecuador and Peru reported traffic rose +11% against a +11.5% growth in (ASK)s, with a slight load factor decrease of -0.3 point to 77.5% LF.

In Brazil, traffic grew +13.6%, while (ASK)s decreased -6.3%.

System wide cargo traffic decreased -2.7% and capacity dipped slightly -0.9%, producing a load factor of 69.3% LF, down -1.3 points year-over-year.

(LAN) Airlines and (TAM) (TPR) Airlines are moving to fill some of the gap left by Uruguay’s Pluna (PLU), which suspended operations July 3. The government-owned (PLU) operated an average 250 weekly flights linking Montevideo (MVD) to destinations in Argentina, Brazil and Chile. (PLU)’s seven Bombardier CRJ900s were sold last week to Spanish charter carrier, Cosmo Airlines (COS) at a government auction. The air crew (FC)/(CA) and ground personnel (MT) unions of former (PLU) employees are hopeful they will be able to acquire partners and establish a replacement flag carrier to operate (PLU)’s six remaining leased CRJ900s. Details were not given, but a union spokesperson told local media there are five solid interested candidates.

(TPR) will introduce its third daily São Paulo - (MVD) frequency on October 26, while (LAN) will introduce its third Santiago - (MVD) daily service on December 1.

(TPR) inaugurated daily flights from Rio de Janeiro (GIG) to Orlando, Florida, USA airport (MCO) on 29 October. The new service, which comes on top of the airline’s twice-daily link to the Florida airport from São Paulo Guarulhos, will be operated using 7F, 46C, 175Y-seat A330-200s.

November 2012: The LATAM Airlines Group (LAN)/(TPR) reported a third-quarter net income of +$21.3 million, representing the first three months of integrated business between the two carriers. The figure excludes $19.5 million related to transaction expenses resulting from the merger and a one-time charge of $70.4 million related to a new corporate income tax rate increase in Chile from 17% to 20%.

Total revenues of $3.3 billion represent a -3.8% decrease compared to pro forma revenues in the year-ago period. Passenger revenue was down -2.4%, while cargo revenue decreased -14.4%.

The company said the main reasons for the decreased revenue included the depreciation of the Brazilian real, weak demand in the cargo business, the transition into the merged business operation and the turnaround of Brazilian domestic markets.

Passenger traffic grew +7.2% and load factor increased +3.8 points to 80% LF. Capacity (ASK)s were up +2.2%, while (RASK)s decreased -4.6%. Cargo capacity was down -3.2%, while traffic decreased -5.6%. The group received its first 787-800 in the period, as well as six A320s, four 767-300s, two 777-300ERs and one 777F freighter.

(LATAM) expects system wide (ASK)s to grow between +3% and +4% this year due to fleet expansion, while domestic (ASK)s in Brazil are expected to decrease around -2%. Cargo (ATK)s are expected to grow up to +2%.

The two carriers will decide which alliance to join “not before the first half of 2013,” (LATAM) General Manager Europe, Francisco Vidal told local media in July.

TAM Airlines (TPR) launched daily, Rio de Janeiro - Orlando A330-200 service. (TPR) stated that its Sao Paulo - Miami is one of the most profitable routes in its network.

(TPR) launched services on the 1,800 km route from Rio de Janeiro (GIG) to Montevideo (MVD) on 15 November. The route, which was previously served by Pluna (PLU) prior to its collapse in July, is now offered by (TPR) on a daily basis and is operated using A320s. (Tpr) already serves the Uruguayan capital from São Paulo Guarulhos, on which it increased from two to three weekly frequencies in the northern winter scheduling season.

(TPR) launched services on the route from the world’s capital of carnival, Rio de Janeiro (GIG), to Santiago de Chile (SCL) on 25 November. Daily frequencies will be operated on the 2,900 km route with A320s, adding to the twice-daily flights already offered by TAM (TPR)’s merger partner, (LAN). Notably, the two airlines also enjoy a duopoly on the route from São Paulo Guarulhos to Santiago, on which they provide a combined total of 56 weekly departures.

December 2012: Star (SAL) Alliance member AviancaTaca Airlines (AVI)/(TAC) is ready to fill the gap in Brazil if (TAM) Airlines (TPR) leaves the (SAL) alliance, as expected. Brazilian-based, (TAM) (TPR) merged with Oneworld (ONW) Alliance member (LAN) Airlines earlier this year, creating the (LATAM) Group.

(AVI)/(TAC) (CEO), Fabio Villegas Ramirez said (AVI)/(TAC) is working to tap more into Brazil, which he considers an “important market. It is difficult to operate there, but it is a market you have to be in.”

A top Star (SAL) Alliance executive said that TAM Airlines (TPR) will have to pay a $25 million fee to leave the (SAL) alliance.

The (AVI)/(TAC) group of airlines, which was formed from the merger of Colombia’s Avianca (AVI) and El Salvador’s Grupo (TACA) (TAC) into AviancaTaca (AVI)/(TAC), said it will unify all members under the single "Avianca" brand “by the second part of this year.”

Ramirez said the (AVI)/(TAC), which is expecting a +15% passenger year-over-year growth, has “the opportunity to be in one of the top markets in Latin America.” He said (AVI)/(TAC) will “increase frequencies and add new destinations” to counter the effects of the economic weakness of Europe and the USA. “You always have issues here [in Latin America], like increasing fuel prices, but we will be conservative to maintain our profitability.”

The (AVI)/(TAC) group operates 150 airplanes. “We have 51 Airbus (EDS) airplanes and 15 Boeing (TBC) 787s on order and are planning to add new destinations in Europe, like London or Frankfurt,” Ramirez said.

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January 2013: The merger of (LAN) Airlines and Grupo (TAM) (TPR) in 2012 created Latam, one of the world's largest carriers by market capitalization, and furthered airline consolidation in Latin America. Latam expects demand to remain strong throughout South America and is adding capacity in the region. (Latam) is taking a page out of the low-cost-carrier (LCC) playbook and altering its product on short-haul regional routes to compete more effectively with start ups and (LCC)s. The one blight on the forecast is Brazil, where domestic demand has cooled. (TAM) (TPR) is shifting its focus to international routes and pulling capacity out of its domestic Brazil operations, but it is poised to grow, should demand recover.

Domestic (RPK) traffic growth in Brazil slowed to +6.8% in 2012, after growth of +15.9% in 2011 and +23.5% in 2010, and will likely remain in the single digits in 2013, as the country’s two major carriers continue to reduce capacity in response to challenging market conditions. But Brazil’s two other main domestic players, the new Azul (AZL)-TRIP (TIB) group and Avianca Brazil (ONE), will continue to expand and take market share away from the leading (TAM) (TPR) and Gol (GOT) groups.

(AZL)/(TIB) and (ONE) have each seen market share gains of between +2% and +3% over the last year. Their gains have come at the expense of Gol (GOT), which has been cutting capacity and struggling financially after acquiring smaller low-cost carrier (LCC), Webjet (WEB). (GOT) saw its share of the domestic market slip by about -4% in 2012, while (TAM) (TPR) has been able to keep its share relatively stable despite reducing capacity by lifting its load factors.

Important to (LATAM) is that the Brazilian "Carnival" runs February 8th through February 12th.

The São Paulo government has launched a bid for the construction of a much-anticipated rail link between downtown São Paulo and São Paulo-Guarulhos Airport. The rail link is estimated to open by the end of 2014. São Paulo-Guarulhos Airport reported 30 million boarding passengers in 2011.

The rail link will extend the São Paulo existing railway system 11 km/6.1 miles. Local observers said residents are unhappy the rail line will not provide exclusive services for airport passengers, as it mainly will serve residents of the metropolitan area of São Paulo. It will board an estimated 120,000 passengers daily between intermediate train stations.

Another concern is that, contrary to the original project, the airport train station will not be built adjacent to terminals 1 and 2, allowing passengers to walk in into the terminals, but will be 2 km away by terminal 4.

Airport manager, Invepar said it will provide dedicated, free exclusive rail service between the train station and terminals 1 and 2. Construction of the rail link will start in the first half of 2013.

February 2013: (LAN) Airlines ((IATA) Code LA, based at Santiago de Chile Arturo Merino Benítez International (SCL)) and sister carrier, (TAM) Linhas Aéreas ((IATA) Code: JJ, based at São Paulo Congonhas International (CGH)) (TPR) have been banned effective February 15 from operating to Bolivia according to statements made by the Bolivian Transportation Ministry without giving reasons for the announcement. LAN Perú ((IATA) Code: LP, based at Lima Jorge Chávez International (LIM)) (LPU) currently offers two daily triangle flights from Lima Jorge Chávez International (LIM) to both La Paz El Alto (LPB) and Santa Cruz Viru Viru International (VVI) with A319-100s. (LAN) Airlines operates from Santiago de Chile Arturo Merino Benítez International (SCL) to La Paz four times weekly and to Santa Cruz three times weekly, both via Iquique Diego Aracena International (IQQ) using A320-200s. In addition, (TAM) Airlines ((IATA) Code: PZ, based at Asuncion Silvio Pettirossi International (ASU)) (LAP) offers four weekly flights between Asuncion Silvio Pettirossi International (ASU) and Santa Cruz, providing the only link between Paraguay and Bolivia. Despite the announcements, (LAN) and (TAM) (TPR) flights to Bolivia currently still seem to be operating as normal.

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March 2013: The (LATAM) Airlines Group, parent of (TAM) (TPR) and (LAN) Airlines, reported 2012 fourth quarter net income of +$8.5 million, down -92.6% from +$114.9 million in the year-ago period.

The figures exclude $21.9 million in expenses related to the business combination of both carriers, plus $52.7 million in airplane sale and redelivery costs.

Total operating revenue dropped slightly -0.3% to $3.5 billion. Passenger revenue decreased -0.7% to $2.86 billion and cargo revenue dropped -3.1% to $537.9 million. Other revenues increased +61.5%, mainly due to airplane leases and duty-free sales.

(ASK)s grew +6.7%, while (RPK)s increased +10.7%, producing a load factor of 78.3% LF, up +2.8 points. Yield decreased -10.3% to 10.6 cents.

Cargo traffic decreased -1.5%, which caused load factor to drop from 63.2% LF to 60.4% LF, yields to decline -1.6% and revenues per (ATK) to decrease -6%.

Operating revenues were impacted by the depreciation of the Brazilian real, “a more challenging operating environment in the long-haul passenger business” plus a “weak market demand in the cargo business” and a “migration in (LAN)’s passenger service system to a new one provided by Sabre,” reported (LATAM). The Group also said it made progress in the turnaround of the domestic passenger operations in Brazil, reducing (ASK)s -4.2% and gaining a +11.9% traffic growth, producing a load factor increase of +11.5 points to 79.6% LF. (ASK)s grew +13.2% on international routes, but load factor declined -2 points. The Group acknowledged the impact produced by “increased capacity from international carriers flying to South America, especially from the USA.”

Full-year numbers show (LATAM) reached a +73.9% increase in total operating revenue in 2012, but expenses grew +85.9%, producing a -41.3% decline in operating income and a -96.6% drop in net income.

The Group remains confident in the “synergy target of between $600 and $700 million to be fully achieved” by June 2016, regarding the integration of (LAN) and (TAM) (TPR), and said it reached “an estimated $72 million in merger synergies” in 2012 and expects these to be “between $250 and $300 million” this year.

Nevertheless, it is adjusting its fleet plan to match capacity “to the expected competitive and macroeconomic environment on international and domestic Brazil passenger domestic routes,” which results in “a decrease of $1.2 billion in the expected capital expenditures for 2013 to 2015.”

In 2012, (LATAM)’s total fleet was 311 airplanes, which will fall to 308 airplanes this year and grow to 315 next year. During the fourth quarter of 2012, (LATAM) received six A320s, four 767-300s, two 777-300ERs, two 787-800s and one 777F freighter.

Looking forward, (LATAM) is expecting system wide (ASK)s to grow to +4%, on the low side of earlier predictions of between 4% and 6%. Domestic (ASK)s in Brazil are estimated to decline between -5% and -7% this year. Cargo capacity is expected to grow between +2% and +4%, due to the introduction into the fleet of two new 777F freighters and additional belly capacity.

The (LATAM) Airlines Group, parent of (TAM) (TPR) and (LAN) Airlines, has chosen membership in the Oneworld (ONW) Alliance over the Star (SAL) Alliance for both carriers.

Holding an estimated 40% share of the South American air passenger market, (LATAM) is making one of the more consequential alliance membership decisions of recent years. Chilean antitrust authorities required (LATAM) to leave one of the alliances when it approved the merger of Chile’s (LAN) and Brazil’s (TAM) (TPR) in 2011.

(LAN) is a Oneworld (ONW) Alliance member while (TAM) (TPR) belongeds to the Star (SAL) Alliance. (TAM) (TPR) will leave the (SAL) Alliance in the second quarter of 2014, (LATAM) said in a March 7th statement making the decision official. Signs have pointed to (LATAM) choosing the Oneworld (ONW) Alliance for some time.

(TAM) (TPR) “plans to officially join the (ONW) Alliance as soon as it leaves the (SAL) Alliance,” (LATAM) said. “From that date, (TAM) (TPR) passengers will be able to accumulate km/points by flying on any (ONW) Alliance member airline. Until then, they will continue to receive the benefits offered by the (SAL) Alliance.”

(LATAM) (CEO), Enrique Cueto said, “We evaluated all the existing possibilities and chose the alliance that offers the best benefits to our passengers, in addition to the best connectivity and products, as well as the greater synergies for the (LATAM) Airlines Group. With the incorporation of the (LATAM) Airlines Group to the (ONW) Alliance, passengers flying with us will be able to book trips through the (ONW) Alliance network of destinations and connect from any of the 950 destinations, including distant and exotic ones such as Hong Kong, Kuala Lumpur, Moscow or Melbourne, through (ONW) Alliance member airlines.”

(ONW) Alliance (CEO), Bruce Ashby added, “We are delighted that, after its comprehensive review of alliance options, (LATAM) not only decided to have (LAN) remain on board the (ONW) Alliance, but also to include (TAM) (TPR) and all the other passenger airline subsidiaries in the LATAM group as well. This solidifies the (ONW) Alliance’s long-standing position as the alliance leader in Latin America.”

(LATAM) carrier, (LAN) Colombia will become a (ONW) Alliance affiliate member in the 2013 fourth quarter. (LAN) Argentina, (LAN) Ecuador and (LAN) Peru are already (ONW) Alliance affiliate carriers.

In addition to (LAN), current (ONW) Alliance members are Air Berlin (BER), American Airlines (AAL), British Airways (BAB), Cathay Pacific Airways (CAT), Finnair (FIN), Iberia (IBE), Japan Airlines (JAL)/(JAS), Malaysia Airlines (MAS), Qantas (QAN), Royal Jordanian (RJA) and S7 Airlines (SBR). In addition to (TAM) (TPR), SriLankan Airlines (LNK) and Qatar Airways (QTA) are slated to become new members.

US Airways (AMW)/(USA) has already said it will leave the Star (SAL) Alliance to join the (ONW) Alliance following the completion of its merger with American (AAL).

Brazil’s antitrust agency, (CADE) has approved the merger between Azul (AZL) and TRIP Linhas Aereas (TIB). The new joint carrier will become the third largest in Brazil after market leaders (TAM) Airlines (TPR) and (GOL) (GOT).

(AZL) and (TIB) operate a combined fleet of 118 airplanes and fly to 102 domestic destinations. According to the National Civil Aviation Agency, the two carriers make up 16.4% of Brazil’s domestic market share. (CADE) is requiring (TIB) and (TPR) to cease their code share agreement, and that (AZL) and (TIB) operate at least 85% of their joint slots at Rio de Janeiro’s Santos Dumont Airport.

See video on Rio Carnaval - -

April 2013: (LATAM) will debut Airbus (EDS)’ Space-Flex lavatory, launching the first narrow body restroom for passengers with reduced mobility.

May 2013: On the heels of (LATAM) Airlines Group’s first-quarter results, (LAN) Airlines announced it completed a test flight of its 787 after installing battery modifications, paving the way for the grounded airplane to resume operations. (LAN) (CEO), Ignacio Cueto said the nearly two-hour test flight over Santiago, Chile went smoothly and without incident. The (LATAM) Airlines Group posted a first-quarter net income of +$42.7 million, down -48.9%.

June 2013: 767-316ER (42214, PT-MSY), ex-(CC-BDL), (LAN) leased and A320-214 (5643, PR-TYA), ex-(F-WWIO), Gaviota Leasing leased.

July 2013: TAM Airlines (TPR) began 767 London - Rio de Janeiro service and will add 767 service beginning in November with New York (JFK) - Miami - Brazil and eventually on Miami - Manaus, - Brasilia and - Belo Horizonte service.

767-316ER (41993, PT-MSX), ex-(CC-BDK) (LAN) leased.

August 2013: The (LATAM) Airlines Group has posted a second-quarter net loss of -$329.8 million, narrowed from a net loss of -$448.8 million in the year-ago quarter. (LATAM) said the results were skewed due to a 10.5% depreciation of the Brazilian real during the second quarter.

(TAM) Airlines (TPR) and American Airlines (AAL) begin code sharing on flights between Brazil and the USA on August 22.

(LATAM) Airlines (LAN)/(TPR) chose Pratt & Whitney (PRW) PurePower (PW1100G-JM) engines to power its order of 42 firm A320neo family airplanes. The agreement includes a 12-year Fleet Management Plan. Engine deliveries are expected to begin in 2016.

The PurePower (PW1100G-JM) engines benefits include double-digit reductions in fuel burn, environmental emissions, engine noise and operating costs.

September 2013: - - - INCDT: (TAM) Airlines (TPR) A330-203 (CFM56-5B) (700, /05 PT-MVL), on Flight 8065 from Madrid to Sao Paulo encountered such severe turbulence as it approached Brazil, that 12 passengers and crew members were injured and the airplane was forced to make an unscheduled landing in the northeastern Brazilian city of Fortaleza.

Passengers say the turbulence lasted only a few seconds, but it caused panic and slammed several people to the cabin's roof. Many of them had been sleeping.

(TAM) (TPR) said that two people remain hospitalized after the incident. The statement didn't specify the injuries, but passengers told local media many people suffered cuts and a few appeared to have broken bones. - - -

(LAN) Colombia (AIR) will join the Oneworld (ONW) Alliance from October 1, the first of the merged (LATAM) (LAN)/(TPR) airlines to join the alliance.

The (LATAM) Airlines Group, parent of Brazil’s (TAM) (TPR) and Chile’s (LAN) Airlines, announced in March it had chosen membership in the Oneworld (ONW) over the Star (SAL) Alliance for both carriers.

(LAN) Airlines, which has been a full member of the Oneworld (ONW) Alliance since 2000, merged with (TAM) Airlines (TPR) in 2011. (TAM) (TPR) was a member of the Star (SAL) Alliance. Chilean antitrust authorities required (LATAM) to leave one of the alliances when it approved the merger.

All other passenger airline affiliates of (LAN) Airlines have joined the Oneworld (ONW) alliance as affiliate members, subsequently (LAN Argentina (LNR), LAN Ecuador (LNE) and LAN Peru (LPU)) apart from (TAM) (TPR), which will transition to the Oneworld (ONW) Alliance from the Star (SAL) Alliance in the second quarter of 2014, as announced in March. (LAN) said that dates for the switch will be announced “in due course.” (TAM)'s Paraguayan affiliate (TAM) Mercosur (LAP) will also become part of the Oneworld (ONW) Alliance.

“With the other airlines lining up to join the Oneworld (ONW) Alliance in the coming months, the (ONW) alliance's network will expand to almost a thousand destinations in more than >150 countries served by a combined fleet of 3,300 airplanes operating 14,000 daily departures, carrying 480 million passengers a year and generating annual revenues of $140 billion,” (AIR) said.

(LAN) Colombia (AIR), launched in 2011, serves 23 airports in three countries with a fleet of 24 airplanes (including 767s and 737s, A320s and Bombardier DHC-8-200s) operating 130 departures a day. It boarded 3.7 million passengers in 2012.

(TAM) Airlines (TPR) has started a new domestic route between Brazil’s busiest airport São Paulo Guarulhos (GRU) and Joinville (JOI). The new 390 km service, which began on September 3rd, will be operated five-times weekly using (TPR)’s 144Y-seat A319s, rising to six-times weekly in October. (TAM) (TPR) already serves Joinville with double-daily flights from São Paulo Congonhas Airport. (GOL) (GOT) and Azul (AZL) also operate domestic flights from Joinville Airport, which handled 423,000 passengers in 2012. Joinville is known for its German influence. A significant part of the population is descended from German and Swiss immigrants. Coincidentally, or maybe not, (BMW) has announced plans to build its first car plant in Latin America in the nearby town of Araquari.

October 2013: (TAM) Airlines (TPR) added 4x-weekly 777-300s to its daily, New York (JFK) - Sao Paulo/Guarulhos service.

November 2013: The (LATAM) Airlines Group (the merger created between Santiago de Chile-based (LAN) Airlines and Brazil’s (TAM) Airlines (TPR)) reported a third-quarter net profit of +$52.1 million, reversed from a -$49 loss in the same period last year.

Latin America’s powerhouse the (LATAM) Airlines Group believes it has turned a corner in its Brazilian operations after enduring weak margin conditions within Brazil’s domestic environment since the merger of (LAN) Airlines and (TAM) (TPR) officially closed a little over a year ago.

The company’s overall 3rd quarter 2013 results were somewhat buoyed by a +19% improvement in Brazilian domestic unit revenues year-on-year as (LATAM) slashed its supply within Brazil by -6% during the quarter. For the 9 month 2013 time period, (LATAM)’s capacity (ASK)s within Brazil contracted by -9%.

While the rebound within Brazil is commendable, (LATAM) still faces challenges with respect to the devaluing of the BRL, which fell -13% during 3rd quarter 2013 against the USD. (LATAM) is attempting to blunt the effects of currency fluctuations through hedging schemes and transitioning (TPR)’s debt to the (LATAM) balance sheet, which is denominated in the USD.

December 2013: (TAM) (TPR) will introduce daily, São Paulo/Guarulhos - Rosário A320 service on January 2, 2014.

A320-214 (5883, PR-TYH), ex-(D-AVVI), Tucuquere Leasing leased in special "20 Anos TAM Fidelidade Airbus A320" colors.

January 2014: SEE ATTACHED - - "TPR-2014-01-TOP 2013 WORLD AIRLINES-A/B."

Brazilian airlines have asked Brazil’s National Civil Aviation Agency (ANAC) to allow 1,500 extra domestic flights between June 6 and July 20 to meet a huge increase in demand during the (FIFA) 2014 World Soccer Cup, which will be held between June 12 and July 13.

The World Soccer Cup will stage matches in 12 different cities and will swell traffic at 15 airports. The city pairs that are being considered for additional flights are São Paulo - Brasília, São Paulo - Salvador, São Paulo - Fortaleza and Rio de Janeiro - Campinas. Airlines are also requesting authorization for extra flights for the international Rio de Janeiro - Buenos Aires city pair.

Later, Brazil’s National Civil Aviation Agency (ANAC) has approved +1,973 extra flights between June 6 and July 20 to cover the expected huge increase in demand during the (FIFA) World Cup in Brazil.

The flights will be operated by Brazil’s four major airlines ((TAM) (TPR), (GOL) (GOT), Azul (AZL) and Avianca (AVI)) and include operations into 25 airports in the 12 cities staging matches or up to 200 km from the stadiums. Most are domestic flights.

City pairs to get the greatest number of extra flights are São Paulo - Brasília (288), Campinas/Viracopos - Rio de Janeiro/Santos Dumont (284), São Paulo - Fortaleza (205) and São Paulo - Recife (59). The Rio de Janeiro - Buenos Aires international city pair will get 262 extra flights.

(ANAC) Director President, Marcelo Guaranys told local media it is up to airlines to activate the approved extra flights. A spokesperson for the Brazilian Association of Airlines said the carriers must gradually reorganize their respective route networks and adjust the new flights accordingly, beginning in the next few weeks, and open some of the flights for sale.

Guaranys said the (ANAC) is closely monitoring the airlines to avoid abusive increases in air fares, as there have already been reports of increases in domestic fares of up to +10 times, in some cases. In response to media criticism, Azul (AZL) announced earlier this month it is limiting fares during the period to a maximum of R$999/$422 per one-way ticket, including connecting flights. (CEO), David Neeleman told local media this represents a R$20 million cost for the airline, which expects to face a -20% decrease in business traffic from June 12 to July 13. A few days later, Avianca (AVI) followed suit. (TAM)/(TPR) and (GOL)/(GOT) have not announced any specific measures so far.

INCDT: Brazil's federal police say a bomb threat forced a passenger plane to make an unplanned landing in the Amazon city of Manaus.
Federal police in Manaus said a (TAM) Airlines (TPR) flight took off from Brasilia Saturday morning January 18th and was en route to the city of Boa Vista.

A note left in a bathroom in Brasilia's airport claimed that a bomb was aboard the (TAM) (TPR) jet. It had already taken off when the note was discovered, so officials routed the plane to Manaus, where it safely landed. Authorities said a search of the plane has yet to turn up any device. But the jet remained on the tarmac in Manaus while an investigation continued. A federal police official in Manaus said no arrests have been made.

February 2014: (TAM) Airlines (TPR), the largest Brazilian carrier, expanded its presence in the USA with the introduction of twice-weekly flights (Wednesdays and Sundays) from Belem (BEL) in Brazil to Miami, Florida (MIA). The service, which was inaugurated on February 2nd, will be operated by the Star (SAL) Alliance member’s 221-seat 767-300s. The 4,554 km sector will face no competition from other carriers.

March 2014: Santiago-based, the (LATAM) Airlines Group has reported a 2013 net loss of -$281.1 million, a +$242 million improvement over 2012’s net loss of -$523.1 million. (LATAM)’s 2013 revenue rose +0.3% to $13.3 billion as expenses fell -3.9% to $12.6 billion, producing an operating profit for the year of +$643.9 million, more than seven times the operating profit of +$91.4 million (LATAM) reported for 2012.

Full-year system yield was down -1.8% to 8.4 cents as (RASK) stayed steady year-over-year at 6.1 cents and (CASK) dropped -3.7% to 6.2 cents. (LATAM)’s fuel expenses for 2013 were $4.4 billion, down -7.7% from 2012; 1.27 billion fuel gallons were consumed by the company in 2013, down -2.2% from 2012.

(LATAM)’s 2013 passenger traffic increased +2.5% to 106.5 billion (RPK)s on a -0.4% decrease in capacity to 131.7 billion (ASK)s, generating a load factor of 80.8% LF, down -2.3 points from 2012. Total passengers transported in 2013 came to 66.7 million, up +3.1% from 2012.

In the 2013 fourth-quarter, (LATAM) posted a net loss of $46.2 million, a $23.7 million improvement on the $69.8 million loss posted in 2012’s December quarter. Fourth-quarter revenue dropped -2.1% year-over-year to $3.4 billion; expenses fell -6.5% year-over-year to $3.2 billion, leaving an operating profit of +$234.9 million, nearly tripling the company’s operating profit from the 2012 fourth-quarter.

(LATAM) explained the net results as “mainly due to a foreign exchange loss of -$142.6 million mostly recognized at (TAM) (TPR) as a result of the -6.5% devaluation of the Brazilian real during the quarter.”

(LATAM) was formed in June 2012 as a merger of Chile’s (LAN) Airlines and Brazil’s (TAM) Airlines (TPR). Each airline continues to operate under its own brand and identity.

Earlier in 2013, after reviewing its post-merger plan, (LATAM) began a restructuring aimed at reducing its total operating fleet. The company started phasing out all of its Airbus A330s, A340s, Boeing 737s, and Bombardier DHC-8-200s and DHC-8-Q400s during the 2013 fourth quarter, a process that will continue through early 2016.

“During the fourth quarter of 2013, this process has generated non-recurring costs of $17.5 million resulting from penalties related to anticipated redeliveries and other delivery expenses. For the full year, these costs reached $29 million.”

(LATAM) took delivery of four Airbus A320s and one Boeing 787-8 Dreamliner during the fourth quarter and returned one each of its A319s, A320s, A340s and 737s. Additionally, the company sold an A318 during the quarter. During 2014, the company expects “to phase out all of our remaining 737s, DHC-8-Q400s and A340-500s, and will also redeliver one of four remaining A340-300s and seven of our 20 A330s,” (LATAM) said.

Following this fleet restructuring, (LATAM) will no longer operate turboprop airplanes in Colombia. By the end of 2015, the company’s long-haul business is expected to be centered on a fleet of 38 767-300s, 10 777-300ERs, 17 787s and an Airbus A350-900 (due for delivery to (LATAM) in the 2015 fourth quarter).

As of December 31, (LATAM)’s fleet consisted of 323 passenger airplanes and 16 cargo airplanes.

April 2014: (TAM) Airlines (TPR) commenced operations on its second route to Asuncion (ASU) in Paraguay on March 30th, launching daily flights from Buenos Aires Ezeiza (EZE). The 1,067 km sector to the capital and largest city of Paraguay will be operated utilizing (TPR)’s 156-seat A320s and will face direct competition from TAM Airlines Paraguay (LAP), its Paraguayan arm’s twice-daily flights and Aerolineas Argentinas (ARG)’s daily services. (TPR) already serves Asuncion from Sao Paulo Guarulhos with daily operations.

May 2014: Santiago-based, the (LATAM) Airlines Group (TAM) (TPR)/(LAN) Air has reported a first-quarter net loss of -$41.3 million, reversed from a net income of +$42.7 million in the year-ago quarter. The company said the results were due to non-recurring costs related to fleet restructuring. Excluding the one-off costs, it made a net profit of +$80.7 million, up +88.7% over a net profit of +$42.7 million in the year-ago quarter.

The Oneworld (ONW) Alliance member is the merger created between Santiago de Chile-based (LAN) Airlines and Brazil’s (TAM) Airlines (TPR) in 2012.

First-quarter revenue was $3.2 billion, down -6.8% year-over-year, which the company attributed to a -6.4% decrease in passenger revenues and a -12.5% decrease in cargo revenues, partially offset by a +11.6% increase in other revenues. Expenses for the quarter were down -7% to $3.1 billion, producing an operating income of +$112.6 million, down -1.4% year-over-year.

The Group said that first-quarter operating income (excluding non-recurring costs) was $146.7 million, up +28.5%, “which was driven by strong improvements in the results of (LATAM)’s passenger operations in most markets, especially in the Brazilian domestic operations, offset by the -18.5% depreciation of the Brazilian real over this year, as well as by weaker results in the cargo business.”

First-quarter systemwide passenger traffic was down -0.9% to 38.5 billion (RPK)s, on a -5.2% reduction in capacity to 52.2 billion (ASK)s, producing a load factor of 73.8% LF, down -3.2 points year-over-year. Yield was down -6.4%.

The company said it is undertaking a broad fleet restructuring plan “with the aim of reducing the number of models operated, phasing out less efficient models and allocating airplanes best suited to each one of its markets.” As a result, the company said it “expects to redeliver a significant number of airplanes between 2013 and 2016, and to fully phase out its Airbus A330s, A340s, Boeing 737s and Bombardier DHC-8-Q400s.”

(LAN) Airlines will retire its fleet of A340-300s, while sister carrier, (TAM) Linhas Aéreas (TPR) will dispose of its A330-200s as part of (LATAM) Airlines Group's fleet restructuring objectives.

Announcing a consolidated operating income of +USD147million for the First Quarter of 2014, (LATAM) said its post-merger fleet plan and fleet requirements include plans to reduce the variety of airplanes operated by phasing out less efficient models and allocating airplanes best suited to each one of its markets.

Among the types to be retired are the Airbus A330, A340, Boeing 737s and DHC-8-Q400s. With LAN Colombia ((IATA) Code: 4C, based at Bogotá) (AIR) having recently retired its last 737-700 from its fleet and the DHC-8-400 having now left the Group completely, the only jets left for disposal on (LATAM)'s list are sixteen A330-200s, currently with (TAM) (TPR) and three A340-300s currently with (LAN).

(LAN) currently operates the quadjet on flights to Auckland International, Madrid Barajas, Sydney Kingford Smith, and Frankfurt International while (TPR) uses its A330s on regional flights to Buenos Aires Ezeiza, Manaus, and Porto Alegre, as well as long-haul flights to México City, Miami International, Madrid, Milan Malpensa, New York (JFK) and Orlando International.

At present, (LAN) has twenty-five 787s on order from Boeing (TBC), while (TPR) has thirty A350-900s on order from Airbus Industrie (EDS).

July 2014: Domestic passenger traffic for Brazilian airline (TAM) Airlines (TPR), the country's biggest, fell -5% during the (FIFA) World Football (soccer) Cup tournament, not as much as expected, as travel by soccer fans partially offset a drop in business travel.

The local unit of Latam Airlines Group (TPR)/(LAN) had expected a -10% slump in traffic from a year earlier due to the loss of business (C) travel, but the month-long World Cup helped lure more than a million foreigners to the country.

"We saw unprecedented demand in Brazil from Chileans, Australians - even Iranians," said (TAM) (TPR) (CEO), Claudia Sender. (TPR) carried 3 million domestic passengers between June 12 and July 13.

While more modest than originally forecast, the drop in air traffic during the World Cup eased the burden at crowded airports in Brazil's twelve host cities. Many of them suspended work on long-delayed upgrades during the tournament.

Sender did not give financial results for (TPR) during the period, but said average ticket prices were down from a year earlier due to the lack of business travel.

August 2014: The (LATAM) Airlines Group reported a second-quarter net loss of -$58.9 million, narrowed from a net loss of -$329.8 million in the year-ago quarter.

The company said the results were “negatively affected by reduced passenger and cargo demand during the (FIFA) World Cup soccer tournament held in Brazil, as well as by very weak seed exports in the cargo business.”

The (LATAM) Airlines Group is a consolidation of Chile’s (LAN) Airlines, (LAN) Cargo (lne), Brazil’s (TAM) Airlines (TPR) and each of the companies’ affiliates and subsidiaries.

Revenue decreased -1.7% year-over-year to $3.05 billion, as expenses fell -0.9% to $3.03 billion. Operating income during the quarter was $15.4 million, a -61% drop from the 2013 second quarter’s +$39.4 million operating profit. (LATAM) explained the revenue lapse as a result of a -12.7% decrease in cargo revenues, partially offset by a +0.3% increase in passenger revenue and a +2.8% increase in other revenues. (LATAM) noted a -70% year-over-year decline in seed exports during April 2014, resulting in a loss of -$18 million in revenue.

(LATAM)’s second-quarter consolidated passenger traffic was down -2.6% to 25.5 billion (RPK)s, on a -1.5% reduction in capacity to 31 billion (ASK)s, producing a load factor of 82.4% LF, up +3.3 points year-over-year. Yield was down -2.3% to 9.9 cents. The consolidated (LATAM) group carried 15.8 million passengers in the second-quarter, up +1.5% year-over-year.

(LATAM)’s cargo traffic in the second-quarter decreased -6.2% year-over-year, to 1.05 million (RTK)s; cargo capacity was reduced -7.5%, to 1.76 million (ATK)s, leading to a cargo load factor of 59.5% LF. Cargo yield was down -5.5% to 40.5 cents.

In June (the month in which the majority of World Cup soccer matches were held) Brazil’s (TAM) Airlines (TPR) reduced capacity by -5.1%, allowing (TPR) to operate with high load factors despite the month’s year-over-year -5.2% drop in traffic.

“We estimate the impact of the (FIFA) World Football Cup on (LATAM)’s operating margin (in both domestic and international operations) to be approximately between $140 million and $160 million during June and July,” (LATAM) said.

(LATAM) said it transported nearly 3 million domestic passengers with more than >1,100 extra domestic and international flights, resulting in an on-time performance of 95%.

“The significant infrastructure investments in Brazil prior to the World Cup, especially in airports, will have a lasting and very positive impact on the continued development of the airline industry in Brazil,” (LATAM) Airlines Group (CEO), Enrique Cueto said.

(LAN) Airlines ((IATA) Code: LA, based at Santiago de Chile International) and (TAM) Linhas Aéreas ((iata) Code: JJ, based at São Paulo Congonhas) (TPR) will begin the transition into a singular brand before the end of the year (LAN)'s (CEO), Ignacio Cueto, has said. Speaking to Colombia's "El Tiempo" newspaper, Cueto said (LATAM) Group management is working hard to find a suitable name that will unify the (LATAM) brand, but which "will not necessarily be that of (TAM), (LAN), or even (LATAM)."

The (CEO) went on to add that the creation of a single brand would also better facilitate promotion of the group companies. It will also allow passengers to better identify the group's network of destinations, particularly in places where they are less well known, he said.

(LAN) and (TAM) (TPR) merged in 2012 to create the world's second largest airline by market value.

(LATAM) Airlines Group includes (LAN) Airlines and affiliates LAN Perú ((IATA) LP, based at Lima) (LPU), LAN Argentina ((IATA) Code: 4M, based at Buenos Aires Aeroparque) (LNR), (LAN) Colombia ((IATA) Code: 4C, based at Bogotá) (AIR), (LAN) Ecuador ((IATA) Code: XL, based at Quito International) (LNE), (LAN) Cargo ((IATA) Code: UC, based at Santiago de Chile International) (LCO), Linea Aérea Carguera de Colombia ((IATA) Code: L7, Bogotá), MAS Air ((IATA) Code: M7, based at México City) (MSR) and (ABSA) Cargo ((IATA) Code: M3, based at Campinas Viracopos) (BSB), alongside (TAM) (TPR) and its subsidiaries, Pantanal Linhas Aéreas ((IATA) Code: GP, based at São Paulo Congonhas), (TAM) Airlines ((IATA) Code: PZ, based at Asuncion) (LAP), and (TAM) Cargo - Táxi Aéreo Marília (based at São Paulo Congonhas).

TAM Linhas Aéreas ((IATA) Code: JJ, based at São Paulo Congonhas) (TPR) parent, the (LATAM) Airlines Group, has signed a firm order with Airbus Industrie (EDS) for twenty-seven A350-900s valued at approximately USD7 billion at list prices. Delivery of the A350-900s is scheduled to begin in December 2015 and carry on until 2019.

Announcing the order, Roberto Alvo, (LATAM)'s Chief Corporate Officer, said that as the type's South American launch-customer, (TAM) (TPR) would deploy its A350s on international flights.

At present, (TPR)'s wide body operations are a mixture of Airbus (EDS) and Boeing (TBC) metal with ten A330-200s, eight 767-300s, and ten 777-300(ER)s used on domestic Brazilian flights as well as services to the USA, Argentina, Mexico, Italy, Spain, France, Germany, and Chile.

(TPR) currently operates 157 airplanes, serves 14 countries, with 62 destinations, 186 routes and 793 daily flights.

See video of Helicopter Ride Above Rio - -

October 2014: News Item A-1: (LATAM) begins new international services. (LAN) Airlines will begin daily, Santiago - Milan Boeing 787 service at the end of 2015, with a layover in São Paulo. (TAM) (TPR) begins São Paulo - Cancun service before the end of 2014, and São Paulo - Barcelona and – Toronto, via New York mid-2015. Brasilia - Orlando will begin in third-quarter 2015 and frequencies on Brasilia - Miami and São Paulo - Miami will be added. (LAN) will increase Santiago - Miami from 10x- to 14x-weekly in the third-quarter 2015.

(TAM) Airlines (TPR) expanded its presence at Buenos Aires Ezeiza (EZE) on January 24th, this time from Recife (REC). The 3,814 km sector from the capital and largest city of the state of Pernambuco will be served weekly, utilizing the Oneworld (ONW) Alliance member’s 174-seat A320s. This is (TAM) (TPR)’s third route to Ezeiza, as it already flies 13x weekly from Rio de Janeiro Galeao and daily from Sao Paulo Guarulhos. No other operator serves this new airport pair.

News Item A-2: (ANA) has also entered into a code share agreement with TAM Airlines (TPR). Two new code share flights to São Paulo begin October 26. One will depart Paris, and the other Frankfurt. (ANA) will also put its code on five more routes beyond São Paulo. These code shares are in addition to other services to Brazil with (ANA)’s Star (SAL) Alliance partner airlines, United Airlines (UAL) and Lufthansa (DLH).

News Item A-3: (LAN) Airlines and (TAM) Airlines (TPR), both members of the (LATAM) Airlines Group, announced that passengers can keep their mobile devices turned on in “airplane mode” throughout the flight, including takeoff and landing. This new option was introduced on airplanes that operate flights within Ecuador and will gradually be implemented throughout the group’s fleet.


February 2015: News Item A-1: (TAM) Airlines (TPR) commenced a new domestic route from Brasilia (BSB) to Sao Jose do Rio Preto (SJP) with five weekly flights, effective on February 1st. The 568 km airport pair will be flown by a mixed fleet of (TPR)’s 144Y-seat A319s and 174-seat A320s. No other operator serves this new sector. This brings to 33 the number of destinations served by (TAM) from the Brazilian capital and becomes (TAM)’s second route at Sao Jose do Rio Preto, which it already serves four times daily from Sau Paulo Congonhas. In 2014, Sao Jose do Rio Preto handled 717,118 passengers down -5.5% from the 758,513 that passed through the airport in 2013.

News Item A-2: INCDT: On February 8th, A TAM Linhas Aereas Airbus A321-200 (PT-XPB) performing Flight JJ-3307 from Rio de Janeiro Galeao to Fortaleza (Brazil), was climbing out of Rio de Janeiro's runway 10 when the crew stopped the climb at FL177 at about 5:26 pm L (7:26 pm Z) following a hail strike cracking both windshields and damaging the nose cone and returned to Rio de Janeiro for a safe landing on runway 10 about 40 minutes after departure. There were no injuries, but the airplane received substantial damage (SEE PHOTO - - (TPR-2015-02 - A321 HAIL STRIKE.jpg),

March 2015: News Item A-1: A resurgent fourth-quarter net profit of +$98.3 million helped to ease full-year net losses for the Santiago-based (LATAM) Airlines Group, which closed out 2014 with a net loss of -$109.8 million, narrowed from its -$281.1 million net loss in 2013.

(LATAM), parent of (TAM) (TPR) and (LAN) airlines formed by a 2012 merger, attributed the fourth-quarter (4Q) profits, which reversed its (4Q) 2013 net loss of -$46.1 million, to a -10.3% year-over-year (YOY) reduction in operating costs during the quarter, despite a +1.8% increase in capacity. (LATAM) took delivery of five Airbus A321 airplanes, plus a Boeing 787-8 Dreamliner during the fourth quarter.

Earlier in the year, the (LATAM) Group reported net losses in all three quarters ((1Q) 2014 had a net loss of -$42.7 million; (2Q) 2014’s net loss was -$58.9 million; (3Q) 2014’s net loss was -$107.8 million).

(LATAM) attributed the full-year net results to foreign exchange losses of -$130.2 million in 2014, related to the devaluation of the Brazilian real, as well as a first-quarter non-recurring cost of $112 million related to the company’s ongoing fleet restructuring process.

Full-year operating revenue for the Group was $12.47 billion, falling -6% (YOY), as operating expenses were down -5.3% (YOY) to $11.96 billion. The Group’s full-year operating income came to $513.4 million, down -20.3% (YOY).

Systemwide yield was down -6.7% (YOY) to 7.9 cents as (RASK) lowered -3.7% (YOY) to 5.9 cents and (CASK) dropped -2.4% (YOY) to 6.1 cents. (LATAM) Group’s fuel expenses for 2014 were $4.17 billion, down -5.6% (YOY); 1.22 billion fuel gallons were consumed by the company’s fleet in 2014, down -3.7% (YOY).

The (LATAM) Group carried 67.8 million passengers in 2014, up +1.7% (YOY). Traffic increased +1.9% (YOY) to 108.53 billion (RPK)s as overall capacity decreased -1.1% (YOY) to 130.2 billion (ASK)s; the Group’s resultant system-wide load factor came to 83.4% LF.

(LATAM)’s fourth-quarter operating revenue was $3.1 billion, down -8.6% (YOY). Operating expenses for the quarter were $2.84 billion, down -10.3% (YOY), which led to operating income of +$267 million for the quarter, up +13.7% (YOY).

“As of December 31, 2014, our restructuring plan in on track,” (LATAM) said. The company has phased out its entire fleet of Boeing 737 and Bombardier DHC-8-Q400 airplanes and redelivered two Airbus A319s, seven A330s, three A340s and a 767F freighter.

As of the end of 2014, (LATAM)’s fleet comprised 312 passenger airplanes (231 A320 family airplanes, 13 A330s, three A340s, 38 767-300s, 10 777-300ERs, 10 787-8 Dreamliners and 7 DHC-8-Q200s) and 15 cargo airplanes (11 767-300Fs and 4 777-200Fs).

News Item A-2: (TAM) Airlines (TPR) increased its domestic offering with the addition of a new route from Brasilia (BSB) to Boa Vista (BVB), the capital of the Brazilian state of Roraima, on March 1st. The 2,507 km domestic sector will be served six times weekly, utilizing the Oneworld (ONW) Alliance member’s 174Y-seat A320s. (TAM) (TPR) is also flying to Boa Vista five times weekly from Manaus. No other airline operates on (TAM)’s new addition.

News Item A-3: (TAM) (TPR) Cargo inaugurated its new cargo terminal (the result of BRL$38 million/$12 million in investment. Intended exclusively for domestic cargo, the new terminal is the largest owned by the (LATAM) Group in Brazil, with a total surface area of 15,000 sq m. Located in the Guarulhos area, on Hélio Smidt Highway, the terminal has been restructured and provides new services that represent a significant improvement, considering that the previous one, also located in the vicinity of the airport, had a total surface area of 9,800 sq m.

April 2015: News Item A-1: The International Transport Workers’ Federation (ITF) has warned that various Latin American airports may see possible strike action over the upcoming Easter holiday period and beyond, due to labor conflicts in Argentina, Chile, Colombia, and Ecuador. “These are important connection points for flights throughout Latin America,” the (ITF) said. “The industrial conflicts have already affected and may continue affecting flights where (LAN) and (TAM) Airlines (tpr) fly in the upcoming days.”

(ITF) Civil Aviation Secretary, Gabriel Mocho Rodriguez has sent a warning letter to tourism ministers of South American governments, alerting them to possible effects of labor disruptions on travelers to the region. “We are concerned that tourism in [these countries] could be affected from the Easter holidays until the (Copa) America football tournament,” Rodriguez wrote. The (Copa) America (“America’s Cup”) 2015 will be held in Chile June 11 - July 4, 2015. The (LATAM) Airlines Group (owners of (LAN) and (TAM) Airlines (TPR)) is the “official sponsor” of the tournament.

Grievances in Chile center on (LATAM)’s conflict with the Union of (LAN) Express Workers (Sindilanex); (LATAM) has threatened to cut benefits, and the unionized ground workers, maintenance and passenger services employees have voted overwhelmingly in favor of striking. On March 31, a nationwide strike by Argentina’s transport unions paralyzed movement in the country, and (LATAM) was forced to halt all domestic and regional operations in and out of the country. In Ecuador, protests continue following the October 2014 firing of Jimena Lopez, Founder & General Secretary of Ecuador’s aviation union. In Colombia, “[LATAM] is firing mechanics and cargo workers with the most experience, [but] the union is fighting back,” the (ITF) said.

“In the face of these [various] demonstrations, (LAN) and (TAM) (TPR) airlines have not sent communications suspending their operations,” the (ITF) said.

The (LATAM) Airlines Group has not yet released any official comment on the various demonstrations and threatened strike actions.

News Iterm A-2: The final assembly of TAM Airlines (TPR)'s first Airbus A350 XWB has begun at Roger Beteille Final Assembly Line (FAL) in Toulouse, France. Scheduled for delivery in December, the A350-XWB will make (TPR) become the first Americas operator of the A350 XWB.

(TAM) (TPR) has a total of 27 A35-900s on order. Deliveries will begin in 2015 through to 2019.

(TPR) has said the A350's economy (Y) cabin will be configured in a 3-3-3 layout, with similar seats to those found on sister carrier, (LAN)'s 787-9s.

The A350 XWB (Xtra Wide-Body) will bring a step change in efficiency compared with existing airplanes in this size category, using -25% less fuel and providing an equivalent reduction in CO2 emissions.

May 2015: The first Airbus A350-900 for Brazil’s (TAM) Airlines (TPR) is in the Final Assembly Line (FAL) in Toulouse, France. Airbus (EDS)will join the wings, the horizontal and vertical tail plane, the main landing gear and the tail cone to the fuselage.

(TAM) has 27 of the type on order; first delivery is scheduled for the end of the year. (TAM), part of the (LATAM) Airlines Group, will be the first airline in the Americas to fly the A350 XWB and the fourth operator in the world overall.

Airbus (EDS) said that by the end of April, it has won 780 orders for 40 customers for the A350 XWB.

A319-132 (2887, PT-TML), ex-(CC-CPX) Osprey Leasing leased, A321-211 (6592, PT-XPC), ex-(D-AVXK), deliveries.

June 2015: 767-316ER (27615, PT-MOH), ex-(CC-CRV), (LAN) leased.

July 2015: News Item A-1: Citing Brazil’s “difficult economic scenario,” (TAM) (TPR) said it will gradually reduce its domestic operations -8% to -10% and cut about -500 employees.

The reduction in services will see (TPR)’s domestic capacity fall -2% to -4% for the full year 2015 compared to 2014. (TPR) said the staff cuts “will not impact flight crew (FC) personnel.”

Though the number of domestic flights will be reduced, (TPR) does not plan to drop any domestic destinations to which it currently operates.

(TPR) said its capacity reduction move was driven by data released July 10 by the Brazilian Central Bank estimating the country’s Gross Domestic Product (GDP) will contract 1.5% year-over-year in 2015. “They also estimate that inflation should end the year at over >9%, while the USA dollar is expected to continue to strengthen against the Brazilian real,” (TPR) said.

(TPR) parent, the (LATAM) Airlines Group reported a 2014 net loss of -$109.8 million, attributed in part to foreign exchange losses of $130.2 million related to the devaluation of the Brazilian real.

“(TPR) is taking this measure to face the difficult economic scenario of the country,” (CEO), Claudia Sender said. “It is necessary to make adjustments to our network. We continue to believe in the country’s recovery and this adjustment in no way affects the company’s long-term strategy, which includes the renewal of the fleet and the continuous strengthening of our hubs in Brasília and São Paulo Guarulhos.”

News Item A-2: (TAM) (TPR), the Brazilian carrier that is part of (LATAM) Airlines Group, expects to take delivery of its first Airbus A350-900 in December and plans to deploy it on a domestic route initially.

(TAM) (TPR) is expected to be the first airline in the Americas to operate the A350. In January 2016, it will fly the aircraft domestically between São Paulo Guarulhos and Manaus. In March 2016, (TPR) will begin São Paulo Guarulhos - Miami A350 flights. In April 2016, it will start Guarulhos - Madrid A350 service.

(TPR) said pilots (FC) currently flying its A330s will go through 60 days of training on the A350, which will take place both in flight and on the ground.

(TPR) has 27 A350s on order and is slated to take delivery of the type through 2019. (TPR)’s A350s will be configured with 318Y economy-class seats and 30C lie-flat seats in business class.

August 2015: News Item A-1: The (LATAM) Airlines Group, parent of Brazil’s (TAM) (TPR) and Chile’s (LAN) Airlines, incurred a second-quarter net loss of -$49.7 million, narrowed -15.6% year-over-year.

The net deficit, lower than the year-ago quarter’s -$58.9 million net loss, is attributed to difficult macroeconomic conditions in Latin America, particularly in Brazil, to which (LATAM) has a great deal of exposure. (LATAM) has decided to reduce (TPR)’s domestic Brazilian capacity -2% to -4% year-over-year in the third-quarter and -8% to -10% in the fourth quarter. “We believe that this will help us fuel a recovery in yields because the capacity will be much more matched to demand,” (TPR) President, Claudia Sender told analysts.

(LATAM)’s second-quarter revenue dropped -20.8% year-over-year to $2.41 billion, but the steep decline was offset by a -21% decrease in expenses to $2.4 billion (fuel costs were down -34.3%). Operating profit was +$17.2 million, up +12.1% from operating income of $15.4 million in the 2014 June quarter.

(LATAM)’s system traffic lowered -2.9% year-over-year in the second quarter to 35.51 billion (RPK0s on a +0.7% increase in capacity to 49.88 billion (ASK)s, producing a load factor of 71.2% LF, down -2.7 points. Yield dropped -19.4% to 6.5 cents.

Sender said that in Brazil, where about 50% of (LATAM)’s capacity is tied up, “we finally started to see a slow [yield] pickup in the last weeks of July and the first weeks of August, but it’s too soon to say whether it’s a structural recovery in yields.” Regarding (TPR)’s large capacity cut, Sender emphasized, “We’re not leaving any of the airports that we currently serve. We’re leveraging our most important hub, Brasilia, so therefore, we can still provide connectivity in the Brazilian market.”

(LATAM) officials said the re-branding of (LAN) and (TPR) and their affiliates under a unified (LATAM) brand will begin to become visible in 2016 when (LAN) and (TPR) designations in airports start disappearing. The full $40 million re-branding initiative, including the repainting of more than >300 airplanes in a new (LATAM) livery, is expected to be completed by the end of 2018.

News Item A-2: The (LATAM) Airlines Group has announced it will rebrand its (LAN) Airlines ((IATA) Code: LA, based at Santiago de Chile International) (LAN) and (TAM) Linhas Aéreas ((IATA) Code: JJ, based at São Paulo Congonhas) (TPR) subsidiaries as "Latam Airlines." The unveiling of a singular, unified airline brand comes almost three years after the Chilean and Brazilian firms completed their merger thus creating the world's then second largest airline by market value.

"The first unified experiences for passengers are expected in April 2016, along with the presentation of the first aircraft with the new liveries, names and logos," Latam said.

The group said the new single brand would better facilitate promotion of its companies, while allowing customers to better identify the group's route network.

The (LATAM )Airlines Group includes (LAN) Airlines and affiliates (LAN) Perú (LPU), (LAN) Argentina (LNR), (LAN) Colombia (AIR), (LAN) Ecuador (LNE), (LAN) Cargo (LCO), Linea Aérea Carguera de Colombia, MAS Air (MSR) and ABSA Cargo, alongside (TAM) and its subsidiaries Pantanal Linhas Aéreas, (TAM) Airlines (TPR) and (TAM) - Táxi Aéreo Marília.

News Item A-3: "Trouble in Latin America" by (ATW) Aaron Karp in AirKarp Blog, August 19, 2015.

(Copa) (COP) (COPA) Holdings Parent (CFO), Jose Montero said: "Demand for air travel in our region continues to weaken, driven by currency devaluation and low economic growth."

While North American airlines are enjoying tremendous profitability, Latin America’s airlines are struggling mightily. The future may eventually be bright for (Copa) (COP), Avianca (AVI), (LATAM) (TPR)/(LAN) and other Latin American airline companies, but the present is stormy with no sunshine in sight. (LATAM) reported a -$50 million second-quarter net loss and subsidiary (TAM) (TPR) is slashing domestic Brazilian capacity. (Copa) (COP) stayed profitable in the second quarter, but its net income was down -45.8% year-over-year. Brazil’s (GOL) (GOT) reported a doubling of its net deficit in the second quarter and is cutting capacity -2% to -4% year-over-year in the 2015 second half.

The hardest hit Latin American economies are Brazil, Venezuela and Colombia, and Latin American airlines’ ties to formerly fast-growing Brazil are particularly damaging to their bottom lines. Brazil’s economy is expected to contract in 2015, and the value of its currency, the real, has plunged. Of 152 currencies tracked by "Reuters," only the currencies of Kyrgyzstan, Ukraine, and Azerbaijan have performed worse than the real in 2015.

As a result of all this, the airline revenue environment is horrendous in Latin America. Both (LATAM) and (Copa) (COP) reported year-over-year revenue declines of more than >-20% in the second quarter, and unit revenue performance was even worse.

Speaking to analysts to discuss Panama-based (COP)’s second quarter earnings, senior executives didn’t sugarcoat the situation. “Demand for air travel in our region continues to weaken, driven by currency devaluation and low economic growth,” (COPA) Holdings (CFO), Jose Montero said.

(COP) (CEO), Pedro Heilbron doesn’t foresee a recovery anytime soon. “The economies of Latin America, particularly in South America, still don’t show signs of recovery,” he said. About 40% of Copa (COP)’s (O&D) revenue is tied up in Colombia, Venezuela and Brazil, and the company’s revenue from those markets has been cut in half this year. “The regional economic environment has weakened further” in recent months, Heilbron said.

The biggest problem for Latin American airlines is the difficulty they’re having planning going forward with so much uncertainty in the air. “More than anything, we need stable currencies and stable economies,” Heilbron explained. “It’s not that we need economic growth to rebound to where it was a few years ago, we just need stability and more certainty.”

The difference in financial performance right now, between North American and Latin American airlines is striking. Airlines for America (A4A) VP & Chief Economist, John Heimlich told reporters that “weakness in Latin America has been a bit of drag on earnings” for USA carriers that operate to Latin American countries. But the USA “domestic situation is stable for the foreseeable future” and the problems for airlines in Latin America show no signs of migrating north, he said.

News Item A-4: In the first six months of the year, (GOL) Airlines (GOT) increased its passenger numbers by +2.5% to 17.6 million, increasing its lead over arch rival (TAM) Airlines (TPR), which carried -2 million fewer passengers during the same period.

Seat capacity (ASKs) in the Brazilian domestic market has increased by just under <3% in the first half of 2015, but traffic demand (RPKs) has grown by just under <+4% resulting in the country’s overall network load factor climbing from 79.2% LF to 79.9% LF. Domestic (RPK)s have now risen for 21 straight months, despite difficulties in the Brazilian economy, though since February, growth has been less than <5% each month. As measured by passenger numbers, (GOL) has carried 17.6 million passengers (+2.5%) in the first six months of the year, ahead of (TAM) Airlines (TPR) with 15.6 million (+0.4%). Azul Airlines (AZU) has seen a +2.4% increase in demand to 10 million passengers, while Avianca Brasil (ONE)’s guests have surged by +15.9% to 3.8 million.

In terms of domestic Revenue Passenger Kilometres (RPK)s, there is still little to choose between (TAM) and (GOL). (GOL) was ahead in January and May, while (TAM) was in front in February, March and June, and April being a tie.

(TAM) Airlines (TPR) stretched its lead as the biggest Brazilian international airline:

(TAM) Airlines (TPR) is the biggest airline operating international flights to and from Brazil, with more than twice as many seats as its nearest rival (GOL) Airlines (GOT). Apart from Emirates (EAD) (ranked 11th) (TAM) Airlines (TPR) is also the fastest-growing in terms of percentage increase among the top 12 carriers. In fact six of the top 12 airlines are reporting a decline in seat capacity compared to the same period in 2014. The top 12 airlines comprise two from Brazil, three from the USA, three from Europe, three from other parts of the Americas, and Emirates (EAD) from the Middle East. Across all carriers, seat capacity to and from Brazil is up just over >3% this September.
See chart - "TPR-2015-09 - Top 12 INTNL Airlines Brazil.jpg."

September 2015: News Item A-1: "TAM Airlines’ First A350 XWB Rolls Out of Paint Shop" by (ATW) Linda Blachly, September 18, 2015.

The first Airbus A350 XWB for (TAM) Airlines (TPR) rolled out of the Airbus (EDS) paint shop in Toulouse. The aircraft will continue through the next stages of production, including the installation of engines, completion of cabin furnishing and cockpit fitting, before starting ground and flight tests. The aircraft is scheduled for delivery to (TPR) in December.

(TPR) will become the first airline from the Americas to fly the A350 XWB and the 4th operator in the world. The (LATAM) Airlines Group, made up of (LAN) Airlines and (TAM) Airlines (TPR), has ordered 27 A350-900s. (TPR) will start operating the A350 XWB in January 2016 between São Paulo and Manaus, followed by international operations between São Paulo and Miami, plus São Paulo and Madrid.

News Item A-2: TAM Airlines (TPR) plans to construct a R$100 million/$26.6 million maintenance hangar at São Paulo Guarulhos International Airport (GRU) that it expects will cut R$40 million annually in operational costs by focusing more activities around the hub.

November 2015: News Item A-1: The (LATAM) Airlines Group, parent of Brazil’s (TAM) (TPR) and Chile’s (LAN) Airlines, reported a 2015 third-quarter net loss of -$113.3 million.

The net deficit, deeper than the year-ago quarter’s -$107.8 million net loss, is attributed by (LATAM) management to a weakening macroeconomic environment in Latin America embellished by the ongoing devaluation of Latin American currencies (especially the “challenging economic scenario” of the Brazilian real’s -55.5% depreciation).

In response, in September, (TAM) Airlines (TPR) reduced domestic capacity in Brazil by -5.9%; (TPR) intends to further reduce capacity by approximately -8% to -10% during the 2015 fourth quarter.

As customer demand is expected to continue to weaken, (LATAM) announced it is revising its fleet capital expenditures through 2018. The company plans to restructure its delivery schedule for 2016 - 2018 by reducing fleet commitments for the period by about -40% through deferrals and sales of both wide body and narrow body aircraft (approximately $3 billion in savings).

“This restructuring seeks primarily to adjust capacity to the prevailing market conditions in Latin America, and is in line with our focus on maintaining a healthy balance sheet and adequate liquidity,” (LATAM) said.

(LATAM)’s third-quarter revenue fell -19.9% year-over-year (YOY) to $2.51 billion, but the Group’s operating expenses also declined during the quarter, falling -20.8% (YOY) to $2.39 billion (fuel costs declined -37.1% (YOY)). The Group’s operating profit was +$120.6 million, up +1.9% (YOY).

(LATAM)’s third-quarter system traffic was down -0.5% (YOY) to 38.53 billion (RPK)s on a +1.3% (YOY) increase in capacity to 53.1 billion (ASK)s, producing a load factor of 72.6% LF, down -2.6 points. Yield fell -20.1% (YOY) to 6.3 cents.

As of September 30, the (LATAM) Airlines Group’s consolidated fleet comprised 328 aircraft, including 237 Airbus A320 family aircraft and 10 A330-200s. (LATAM)’s Boeing (TBC) fleet includes 38 767-300 passenger airplanes and 11 767-300F cargo airplanes, 10 777-300ERs, four 777-200F freighters, plus 10 787-8 and six 787-9 Dreamliners.

News Item A-2: "(IATA) (DG) Tyler: Brazil’s Airlines in ‘Dire’ Financial Situation" by (ATW) Aaron Karp, November 16, 2015.

Airlines in Brazil, not long ago a global air transport bright spot, are in a “dire” situation requiring urgent government action, (IATA) (DG) & (CEO), Tony Tyler said.

Speaking at the Latin American & Caribbean Air Transport Association (ALTA) Airline Leaders Forum in San Juan, Puerto Rico, Tyler said Brazilian airlines lost a combined -$500 million in just the first half of 2015. “The problems facing Brazil’s carriers are threefold: the economy is in deep recession with rising unemployment; the real has lost more than a third of its value against the USA dollar in the last 12 months; and most importantly, government policies impose crippling costs on the industry,” he told the conference, calling for “immediate action to protect the benefits of aviation connectivity, by granting relief from high taxes, exorbitant fuel costs and onerous regulation.”

Following his formal remarks, Tyler said, “Clearly what we’ve had in Brazil is a weak economy. When the economy is strong, all boats rise. When economies are weak is when you see what the structural policy weaknesses are.”

He said action on aircraft fuel pricing should be the Brazilian government’s top priority in providing relief to airlines. Brazil’s import parity pricing formula “overprices fuel massively” and costs Brazilian airlines $400 million a year, Tyler said. “Fuel costs [airlines] as much as +50% more in Brazil than in other places,” he said. “That has a huge impact on airline bottom lines.”

Echoing Tyler, (ALTA) Executive director Eduardo Iglesias told reporters “there are a lot of things the Brazilian government could do” to help airlines. “Brazil has one of the highest tax rates on fuel in the region,” he explained. “By lowering those taxes, they could really improve the well-being of airlines.”

Iglesias said the collapse of the real vs the dollar has had “an immediate effect on [air traffic] demand,” adding, “Many places around the world are now having empty flights” going to Brazil.

“Aviation is one of the first areas where you feel the effects of political or economic instability, and that is the case with Brazil,” Iglesias said. “These reports [of Brazilian airlines’ poor earnings performance] are telling us that something must be done in Brazil.”

Aeromexico (AMX) (CEO), Andres Conesa, the current (ALTA) Chairman, said currency devaluation has wiped out the gains of lower fuel prices for airlines throughout Latin America. He doesn’t expect relief anytime soon for the real or other Latin American currencies. “Probably what you can expect, is there will be further volatility in 2016, some more depreciation of currencies against the dollar,” Conesa told reporters.

News Item A-3: "Was the (TAM) (TPR) Merger a Mistake for (LAN)?"
by (ATW) Aaron Karp in AirKarp Blog, November 23, 2015.

The (LATAM) Airlines Group, created by the 2012 merger of Chile’s (LAN) Airlines and Brazil’s (TAM) (TPR), is going through a rough patch. Its net loss through the first nine months of 2015 topped -$200 million, prompting (LATAM) to embark on a restructuring of its 2016 - 2018 fleet plan, that aims to save -$3 billion by deferring aircraft deliveries and selling aircraft. Its fleet commitments for the three-year period are being reduced by -40%.

Prior to the merger with (TAM) (TPR), in which (LAN) acquired the second largest carrier in Brazil, via a stock-swap transaction valued at around $3.5 billion, (LAN) had steady financial success (despite the 2008 - 2009 global financial crisis, and a major earthquake in Chile in 2010. But Brazil’s once fast-growing economy is now shrinking, and the country’s currency, the real, has collapsed. The merger with (TAM) (TPR) and the creation of (LATAM) meant that (LAN) became highly exposed to Brazil, for better or worse. Lately, it has been worse.

Speaking at the Latin American & Caribbean Air Transport Association (ALTA) Airline Leaders Forum in San Juan, Puerto Rico, (LAN) (CEO), Ignacio Cueto (whose brother Enrique Cueto is (LATAM)’s (CEO)) said Brazil is in the midst of “a long, deep crisis,” adding, “In three years, I’ll tell you how we got out of this.”

Cueto was asked point blank whether he regretted (LAN)’s acquisition of (TAM) (TPR). “How many things in life would you not change if you could go back?” he quickly responded, generating a laugh from the crowd at the (ALTA) conference. He then turned more serious. “But sure enough, this is something I would not go back on,” Cueto said. “The question might be: Was it worth it to go into Brazil? - - Definitely.”

He explained that (LAN), which prior to the (TAM) (TPR) merger had launched affiliates in Argentina, Ecuador, Peru, and Colombia, wanted to create a pan-continental airline, that would become South America’s signature air transport operator. How can you do that without Brazil in the fold?

Cueto said (LATAM) is maintaining “as much optimism as possible” through the current difficulties. “Tough times happen and you have to rough them out,” he said.

I visited (LAN)’s headquarters in Santiago de Chile in 2012 just months after the (LAN)/(TAM) merger closed. Here’s a paragraph from the October 2012 (ATW) cover feature, "(LAN)’s Leap." I wrote following that trip:

"A strong impression gleaned (after spending a couple of days at (LAN)’s downtown and airport headquarters, Maintenance base, and pilots (FC)’ training center) is that the early months of (LATAM) are proving to be somewhat overwhelming. “We could only see some [TAM] numbers” before the merger officially closed in June, (LAN) Senior VP Corporate Affairs, Pablo Querol said. “Now we are forced on the fly to understand how (TAM) (TPR) works and how that relates to how (LAN) works. The benefits of joining the two networks, the synergies expected, are going to be there. But we need to finish the research on how to combine the networks of (LAN) and (TAM) . . . Now that we can see the numbers of both carriers, we can figure out exactly what we need to do to get the synergies.”

My point in reprising the above paragraph is to note that, even before the current Brazil crisis, not all was smooth with the merger. (LAN) did “leap” into it without completely understanding (TAM).

In fact, at the 2013 (ALTA) Airline Leaders Forum in Cancun, Enrique Cueto conceded cultural integration issues had led him to push out management staff who had not bought into the merger. “There are people who don’t want to change, and you have to replace them,” he said then.

To be fair to (LATAM), all airlines in Latin America are suffering right now. “The economic weakness has spared no one,” Copa Airlines (COP) (CEO), Pedro Heilbron, also speaking in Puerto Rico, said. But Brazilian carriers (TAM) and (GOL) (GOT) appear to be, by far, suffering the most. Copa and Avianca (AVI), (LATAM)’s two biggest Latin American rivals, are managing to stay profitable.

Would (LAN) be better off without (TAM)? In the near term, undeniably yes. But the creation of (LATAM) was a bet on the long-term future of Latin American commercial aviation, about which Heilbron, the Cuetos, and, among others, Boeing (TBC) and Airbus (EDS) remain very optimistic.

(LAN) believes the current storm will eventually pass and, come the 2020s and beyond, it will have a network unrivaled in the region. As (LAN)’s Querol told me in 2012: “You don’t have any one [airline] company in the world that has the position on one continent that we have in South America. You don’t find one company on one continent that can offer the kind of connections we can, to all parts of the world.”

December 2015: News Item A-1: (TAM) Airlines (TPR) launched services to Punta Cana (PUJ) on December 5 from its base in Brasilia (BSB). The 4,431 km sector will operate 4x-weekly on Wednesdays, Fridays, Saturdays and Sundays according, with the Oneworld (ONW) Alliance member utilizing its 144-seat A319s on the route. Although the sector currently faces no direct competition, (GOL) (GOT) will re-commence its seasonal services on December 26.

News Item A-2: (LAN) Airlines and (TAM) (TPR), members of the (LATAM) Airlines Group, are the first South American airlines to develop and provide pilots (FC) and cabin crew (CA) members with tablets equipped with applications geared to facilitate, optimize and improve the information management process for Flight Operations and service on-board. The new system will accelerate the information management process for each flight, reducing the data processing time from 15 days to only 1 day in some cases, and leading to a reduction of paper consumption of up to -100,000 sheets per month.

News Item A-3: TAM Airlines (TPR)’s first Airbus A350 XWB has taken off on its maiden flight from Toulouse International Airport in France. According to Airbus (EDS), the aircraft now progresses to the final production phase, which includes further ground checks and flight tests, before delivery to (TPR) this month.

(TPR) will become the first airline from the Americas to fly the A350 XWB and the fourth operator in the world. The (LATAM) Airlines Group, made up of (LAN) Airlines and (TAM) Airlines (TPR), has ordered 27 A350 XWB aircraft.

Later, on December 21, (TAM) (TPR) took delivery of its first A350 XWB in Toulouse, France. In doing so, (TAM) became the first airline in the Americas to operate the all-new airliner and the fourth world wide. (TAM)’s aircraft is configured in a premium two-class layout, with 348 seats, comprising of 30 (PC) Premium Business Class and 318Y Economy.

(TAM) will start operating the A350 XWB commercially in January 2016 between Sao Paulo and Manaus, Brazil, as part of continued training and crew familiarization. This will be followed by operations from Sao Paulo to Miami in March and then to Madrid in April.

See photo - "TPR-2015-12 - 1st A350.jpg."

(TAM) (TPR) currently has 162 aircraft, operating to 16 countries to 71 destinations, on 170 routes on 718 daily flights.

January 2016: News Item A-1: (TAM) Airlines (TPR) commenced services on the 4,331 km sector between Sao Paulo Guarulhos (GRU) and Bogota (BOG) on January 19. The Oneworld (ONW) Alliance member will utilize its 767-300s on the city pair, and will join fellow (LATAM) Group member (LAN) Airlines on the sector, which itself operates a daily service. Both of the carriers will also face Star (SAL) Alliance member Avianca (AVI) on the route, which operates a double-daily schedule. Flights leave the Brazilian city at 06:05, arriving in the Colombian capital at 09:35. The return sector leaves Bogota at 11:45, landing back in Sao Paulo at 21:05 the same day. (TAM) Airlines (TPR) last served this city pair in 2012, when it ended a daily A320 service on September 9 of that year.

News Item A-2: "(LATAM) Seeks Antitrust-immunized Joint Ventures (JV)s with American (AAL) and IAG" by (ATW) Aaron Karp, January 14, 2016.

The (LATAM) Airlines Group is seeking to form separate joint ventures (JVs) with American Airlines (AAL) and the International Airlines Group (IAG) for travel between North and South America, and between South America and Europe, respectively.

(AAL) and (LATAM), parent to Brazil’s (TAM) (TPR) and Chile’s (LAN) Airlines (as well as affiliated carriers throughout South America), said they will apply for antitrust immunity (ATI) with the USA Department of Transportation (DOT) and the relevant regulatory authorities in South America. Similarly, (LATAM) and the (IAG), the parent of British Airways (BAB) and Iberia (IBE), said they have signed “a joint business agreement” for the operation of “flights between Europe and South America.”

(LAN), (TAM), (AAL), (BAB) and (IBE) are all members of the Oneworld (ONW) alliance. (AAL), (BAB), (IBE) and Finnair (FIN) already operate an antitrust-immunized transatlantic (JV).

The (IAG) said in a statement that (LATAM), (BAB) and (IBE) “plan to seek approval from the appropriate competition authorities in South America and will inform the regulatory authorities in the European Union (EU),” adding, “Under the joint business, (BAB), (IBE) and the (LATAM) Airlines Group would cooperate commercially on flights between the European Union (EU) and South America. They would expand their code share arrangements on flights between and within Europe and South America, significantly increasing the number of destinations that the airlines can offer customers.”

(IAG) (CEO), Willie Walsh hinted at a potential (IAG)-(LATAM) (JV) in December, telling the Aviation Club of the UK that the (IAG) “would like to have closer ties to” (LATAM).

(LATAM) (CEO), Enrique Cueto called the potential (JV)s with (AAL) and the (IAG) “excellent news for Latin America,” adding, “Through these two agreements, we seek to significantly improve the benefits to our clients by providing them with greater connectivity between South America and the USA/Canada and also between South America and Europe. This step is necessary to offer the best network of connections for everyone in Latin America and increases the possibility of adding new routes and direct flights to new destinations, as well as flights already operated by (LATAM) and affiliates in the future.”

(AAL) Chairman & (CEO), Doug Parker said, “Customers will benefit from more frequent and convenient schedule options than the carriers could offer individually. Travelers headed to Latin America will soon have more seamless access to more than >100 additional destinations with (LATAM) beyond (AAL)’s already extensive network.”

Walsh added, “We already have a close commercial relationship with the (LATAM) Airlines Group as part of the Oneworld (ONW) Alliance and we look forward to enhancing the relationship further. This joint business would benefit customers by providing them with easier journeys to more destinations with better aligned schedules and increased frequencies. This would boost both tourism and business travel between South America and Europe.”

(LATAM) emphasized that it, (AAL) and the (IAG) “will continue to operate independently and maintain control of their respective operations,” adding, “These agreements will not cause any changes to the ownership or administration of the airlines.”

February 2016: News Item A-1: (LAN) Airlines and (TAM) (TPR) international flights will feature 12 movies nominated in USA's 88th Academy Awards, which will be held February 28. The films nominated for Oscars are available on all long-haul flights that offer personalized (IFE) (Boeing 787, 767, 777) in both economy (Y) class and premium business (PC) class. The (LAN) and (TPR) (IFE) systems feature high-definition screens (15.4 inches in premium business (PC) class and 8.9 inches in economy (Y) class) as well as (USB) and iPod connections.

News Item A-2: Costa Rican Maintenance Repair & Overhaul (MRO) Coopesa (COO) has carried out its first "C" check for (LATAM) Airlines (TPR)/(LAN) on an Airbus A319. The "C" check marks the beginning of a series of scheduled services over the course of this year between the parties.

News Item A-3: (MTU) Maintenance has signed an exclusive agreement with the (LATAM) Airlines Group (TPR)/(LAN). (MTU) will maintain a portion of the airline’s (GE90-110)s on Boeing 777F freighters. The contract includes worldwide on-wing and on-site services.

March 2016: News Item A-1: Santiago, Chile-based (LATAM) Airlines Group posted a net loss of -$219.3 million for 2015, nearly doubling its 2014 net loss of -$109.8 million. Additionally, (LATAM) reported a net loss of -$16.3 million for its 2015 fourth quarter, reversing the -$98 million in net profit for the year-ago quarter.

The (LATAM) Airlines Group is parent company to Brazil’s (TAM) Airlines (TPR) and Chile’s (LAN) Airlines, and their affiliates.

(LATAM) was hit hard in 2015 by ongoing economic weakness in Latin America.

Following a 2015 third-quarter net loss of -$113 million, (LATAM) implemented a -40% reduction in its fleet commitments for 2016 - 2018. As of March 2016, the company has reduced its commitments by -$2.9 billion.

“In addition to this plan, the company sold four Airbus A330s, redelivered three A330s, one Boeing 767 and four A320s and subleased one 777F Freighter to a third party during 2015, and continues to seek opportunities to adjust fleet commitments,” the company said.

(LATAM) said its fourth-quarter losses included $71 million related to aircraft delivery costs (which was mainly associated with the phase-out of the A330 fleet, expected to occur in 2016) -$57 million in foreign exchange losses, and a $41 million charge that was related to the adjustment in the exchange rate of cash held in Venezuela.

For the full-year, (LATAM) reported non-cash foreign exchange losses of $467.9 million, primarily as a result of the -49% devaluation of the Brazilian real during the year.

(TPR) reduced fourth-quarter domestic capacity in Brazil by -9.4%, and plans to further reduce capacity in Brazil by -8% to -10% in 2016. Additionally, (LATAM) has reduced its 2016 capacity growth guidance on international routes to -3% to -5%.

(LATAM)’s full-year 2015 operating revenue was $10.13 billion, down -18.8% year-over-year (YOY). Operating expenses were $9.61 billion, a -19.6% drop (YOY), with a significant savings coming from the drop in aircraft fuel expenses, which at $2.65 billion, was down -36.4% (YOY).

(LATAM)’s operating income for the year came to $513.9 million, up +0.1% (YOY). “For the airline industry in South America, 2015 was a challenging year, especially in Brazil,” (LATAM) (CEO), Enrique Cueto said. “Despite the slowdown in Gross Domestic Profit (GDP) growth in the region and the depreciation of all local currencies, (LATAM) was able to improve our operating [margin] by +1% point [to 5.1%] as a result of our focus on cost discipline and network enhancement.”

In an effort to expand connectivity to North America and Europe, (LATAM) applied for joint venture (JV) agreements with both American Airlines (AAL) and the International Airlines Group (IAG) in January 2016.

(LATAM)’s system wide yield in 2015 fell -18.1% (YOY) to 6.4 cents as (RASK) dropped -20.5% (YOY) to 4.7 cents, while (CASK) fell -20.1% (YOY) to 4.8 cents. The consolidated group carried 67.8 million passengers in 2015, identical to 2014. Traffic increased +2.7% (YOY) to 111.5 billion (RPK)s as overall capacity grew +3.1% (YOY) to 134.3 billion (ASK)s. Load factor for the consolidated group was 83% LF in 2015, down -0.3 point from 2014.

As of December 31, 2015, (LATAM)’s fleet comprised 316 passenger aircraft (240 Airbus A320 family aircraft, plus 10 A330-200s, one A350-900, 38 Boeing 767-300s, 10 777-300ERs, 10 787-8s, and seven 787-9s) and 11 cargo aircraft (eight 767-300Fs and three 777-200Fs).

News Item A-2: Amadeus reached an agreement with (LATAM) (LAN)/(TAM)/(TPR) for global distribution services, enabling travel agencies subscribed to the Amadeus system to have access to all of (LATAM)’s flights and other services. Flight availability, pricing and other conditions provided to Amadeus travel agencies will be the same as in other channels, including (LATAM)’s website. Moreover, (LATAM) and Amadeus have agreed to continuous cooperation to accelerate (LATAM)’s merchandising capabilities with ancillary services to be made available to Amadeus travel agencies.

April 2016: News Item A-1: "(LATAM) Airlines Group Unifies Cargo Brand" by (ATW) Aaron Karp, April 6, 2016.

The (LATAM) Airlines Group, as part of its brand unification initiative, has brought all of its affiliated cargo operations under a single brand: (LATAM) Cargo.

(LATAM) announced last year that all of its subsidiaries, which most prominently include Chile’s (LAN) Airlines and Brazil’s (TAM) Airlines (TPR), would all be branded “LATAM” by 2018. It said it is uniting (LAN) Cargo (LCO), (TAM) Cargo, (LAN) Cargo Colombia, and Mexico’s Mas Air (MSR) under the single banner of (LATAM) Cargo.

Together, the four carriers fly cargo to 140 destinations in 29 countries. “Apart from representing each affiliate’s best and offering consistent and impeccable service, this change also involves an evolution internally in relation to how we do things, how we deal with issues and how we come up with solutions,” (LATAM) Airlines Group Executive VP Cargo, Cristián Ureta said.

“(LATAM) Cargo will offer its customers unified service throughout the network and integrated products and communications channels,” (LATAM) said. “Changes to the company’s image will start to become visible during the first [half] of 2016 and will continue to be rolled out during the next three years. These changes will not impact the operation or the service delivered to customers.”

News Item A-2: (TAM) Linhas Aéreas (TPR) has ended scheduled A330-200 passenger operations with (968, PT-MVQ) completing the type's last commercial service (México City - São Paulo Guarulhos) on Monday, April 4.

(TPR), the (LATAM) carrier is replacing the A330s with newer A350-900s and 767-300ERs.

(TPR) took delivery of twenty A330-200s direct from Airbus (EDS) between 1998 and 2011 (and leased two more from Gulf Air (GUL)). Of the twenty, eight have now been transferred to Turkish Airlines (THY), two are with (TAP) Portugal, two are destined to go to Air Berlin (BER), and four are set to be parted out. The remaining four's futures have yet to be determined.

May 2016: News Item A-1: Ping An Leasing has delivered the first of four Airbus A321 aircraft to the (LATAM) Airlines Group, which will be operated by (TAM) (TPR), (LATAM)’s subsidiary in Brazil. The aircraft, which was delivered at the Airbus assembly facility in Hamburg, Germany May 25, is the first of four A321s leased to (LATAM) by Ping An Leasing.

News Item A-2: The first A350 XWB to cross the Atlantic, operated by (LATAM) Airlines (TPR)/(LAN), touched down at Adolfo Suárez Madrid-Barajas Airport on May 3. The flight had taken off hours earlier, on the evening of May 2, from São Paulo/Guarulhos, and was received on the runway with a traditional water salute.

July 2016: The (LATAM) Airlines Group’s first Airbus A320neo rolled out of the Airbus Final Assembly Line in Toulouse after the installation of Pratt & Whitney (PRW) Pure Power (PW1100-JM) engines in the airline (LAN)/(TPR)’s new livery.

SEE PHOTO - "TPR-A320neo New Livery - 2016-07.jpg."

August 2016: News Item A-1: The (LATAM) Airlines Group reported a -$92.1 million net loss for the 2016 second quarter (2Q), deepened from the group’s -$49.7 million net loss in (2Q) 2015.

Revenues for the South American airline group (which comprises (LATAM) Airlines and its affiliates in Peru, Argentina, Colombia and Ecuador, (LATAM) Cargo, (TAM) S A (TPR) and its affiliates in Brazil and Paraguay, plus loyalty-program company Multiplus S.A.) fell -12.5% year-over-year (YOY) to $2.11 billion.

The drop in (2Q) revenue is attributable to the continuing “weak macroeconomic environment in South America (especially in Brazil) and the devaluations of Latin American currencies during the period,” (LATAM) said.

(LATAM)’s (2Q) passenger revenue decreased -13.7% (YOY) to $1.71 billion; (2Q) cargo revenue fell -22.3% (YOY) to $260 million. The group’s consolidated yield fell -12.9% (YOY) to 5.7 cents. The group’s operating margin for the quarter was 0.1%, down -0.7 point (YOY).

(LATAM)’s operating expenses for the quarter declined -12% (YOY) to $2.11 billion. The company reported $1.3 million in operating income for the quarter, down -92.4% from $17.2 million in operating income in (2Q) 2015.

In an ongoing effort to reduce fleet assets by $2 billion to $3 billion by 2018, (LATAM) said it had reduced its fleet assets by -$1.1 billion as of August 2016 through deferrals, cancellations and redeliveries. (LATAM) said the company has deferred 12 Airbus A320neo and two A350 aircraft, and has also opted to redeliver five additional A320s, three A319s and one Boeing 777-200F freighter in 2017.

In July, (LATAM) entered into an agreement with Qatar Airways (QTA) to acquire up to 10% of (LATAM)’s total shares. A shareholders meeting on August 18 will determine whether the agreement is approved. Once approved, the capital infusion of +$613 million should come in the 2016 fourth quarter. “[It] will be used to strengthen the financial position of the company, reducing debt, while expecting to end the year with a cash position of approximately $1.5 billion, which we consider to be an adequate level for the company under current market conditions,” (LATAM) said.

(LATAM)’s (2Q) consolidated system traffic was down -2.3% (YOY) to 34.7 billion (RPK)s on a -1.8% (YOY) systemwide decrease in capacity to 49 billion (ASK)s, producing a load factor of 70.8% LF, down -0.4 point (YOY).

Passenger traffic grew +1.8% (YOY) during the second-quarter to 26.3 billion (RPK)s. Passenger capacity was up +0.8% (YOY) to 31.8 billion (ASK)s and (LATAM)’s passenger load factor rose +0.8 point (YOY) to 82.7% LF. In particular, passenger demand is on the rise (up +8.4% (YOY)) in (LATAM)’s Spanish speaking country (SSC) affiliates (Chile, Peru, Argentina, Colombia, and Ecuador). Capacity in the (SSC) markets were up +7.2%, driven by growth in Peru and Chile, and load factors reached 78.8% LF. (LATAM) dropped its capacity in Brazil -13.7% (YOY) during the quarter as traffic decreased -11.9% (YOY), which raised the Brazil load factor to 81.2% LF. Capacity on international routes increased +7.9% (YOY), driven by added capacity on healthy (SSC) routes to the USA and Europe, (LATAM) said.

As of June 30, the (LATAM) Airlines Group’s consolidated fleet comprised 333 aircraft, including 241 Airbus (EDS) A320 family aircraft, five A330-200s and three A350-900s. (LATAM)’s Boeing fleet includes 37 767-300 passenger airplanes, 11 767-300F cargo airplanes, 10 777-300ERs, four 777-200Fs, plus 10 787-8 and 12 787-9 Dreamliners.

News Item A-2: News Item A-2: "(LATAM) Takes First A320neo."

The (LATAM) Airlines Group has taken delivery of its first Airbus A320neo, becoming the 1st airline in the Americas and the 5th in the world to take delivery of the re-engined A320.

See attached photo of the 1st A320neo with following people present: Pictured (from the left): (LATAM) Airlines Group (LAN)/(TPR) Senior VP International & Alliances, Roberto Alvo, Airbus (EDS) President & (CEO), Fabrice Bregier, (LAN)/(TPR) (CEO) Enrique Cueto, (EDS) President Latin America & Caribbean, Rafael Alonso, and (LAN)/(TPR) VP Fleet & Engines, Jose Maluf:
"TPR-2016-08 - 1st A320neo Delivery.jpg."

October 2016: News Item A-1: LATAM AIRLINES bRAZIL (TPR) began 3x-weekly São Paulo - Johannesburg, South Africa (767).

News Item A-2: The (LATAM) Airlines Group took delivery of A350-900 (048) on lease from AerCap (DEA) for operation by (LATAM) Airlines Brazil (TPR).

November 2016: News Item A-1: Santiago, Chile-based (LATAM) Airlines Group posted a +$4.7 million net profit for the 2016 3rd quarter, reversed from a -$113.3 million net loss in (3Q) 2015.

3rd-quarter revenue for the South American airline group (which comprises (LATAM) Airlines and its affiliates in Argentina, Brazil, Chile, Colombia, Ecuador, Paraguay and Peru; (LATAM) Cargo; and loyalty-program company Multiplus) grew modestly (0.2%) to $2.5 billion.

On November 9, (LATAM) Airline Group and its affiliates announced the company will implement a low-cost carrier (LCC) model a “new travel model”) for domestic services in the 6 countries where it has domestic operations (Brazil, Chile, Peru, Argentina, Colombia and Ecuador).

Implementation of the program will be made by country and in stages beginning in the 1st half of 2017. (LATAM) said the model will affect 78% of the group’s passengers and 45% of the company’s capacity, and projects that basic fares on domestic routes will be up to 20% cheaper through to 2020 and passenger numbers on domestic routes will increase up to 50%.

“Our objective is that fares [will] continue to fall, widening access to air travel both to more people and to those who wish to fly more frequently. The new travel model seeks to satisfy the needs of today’s passengers, who value fast, convenient and seamless travel, as well as the ability to manage and personalize their travel experience, only paying for the services they require,” (LATAM) Airlines Group (CEO) Enrique Cueto said.

“The airline industry is being transformed and we feel confident that (LATAM) is well positioned to address the needs of today’s passengers by making their travel easier in a smart and relevant way,” (LATAM) said.

(LATAM)’s 3rd-quarter passenger revenue decreased 0.6% (YOY) to $2.1 billion; cargo revenue fell -14.3% (YOY) to $265.6 million. The group’s consolidated yield was down -0.9% to 6.2 cents. Other revenue, however, increased +68.2% during the quarter to $153.6 million, primarily from a $28 million increase in sales from tour operators associated with the Rio Olympics.

(LATAM) said it was the 1st quarterly revenue gain after 11 consecutive months of revenue decline and reflected “a stronger currency environment in South America, especially the 8.3% appreciation of the Brazilian real, as well as a positive revenue per (ASK) trend in [Brazilian domestic and international routes] driven by significant capacity adjustments,” (LATAM) said. The company reduced domestic capacity in Brazil 13.2%, and revenues per (ASK) increased 8.6% during the quarter. Capacity on international routes between Brazil and the USA were reduced approximately 31.5% during the quarter; (RASK) on these routes increased approximately +20% during the quarter, (LATAM) said.

(LATAM) deferred delivery of 2 Airbus A350 XWBs (from 2017 to 2018) during the quarter.

“Total fleet commitments for 2017 will amount to $482 million, the lowest in the history of (LATAM), all of which will be operating leases, requiring no fleet capital expenditures in 2017,” (LATAM) said, adding the company will also redeliver 1 Airbus A320 in 2017 and sell 1 Boeing 767-300 in 2018. The company plans to fully phase out its A330 aircraft is “on track to be completed by year-end,” (LATAM) said.

The group’s operating expenses for the quarter decreased 1.1% to $2.4 billion, as aircraft maintenance expenses declined 12.3% and aircraft fuel costs fell -13.5% (YOY). The group reported $152.3 million in operating income for the quarter, up +26.3% from $120.6 million in operating profit during 3Q 2015. The group’s operating margin for the quarter was 6%, up +1.3 points compared to 4.8% in (3Q) 2015.

(LATAM)’s 3rd-quarter consolidated systemwide traffic was down -1.4% (YOY) to 38 billion (RPK)s on a -2.1% systemwide decrease in capacity to 52 billion (ASK)s, producing a load factor of 73% LF, down -2.6 points (YOY).

Passenger traffic was up +1.1% (YOY) during the quarter to 29.3 billion (RPK)s. Passenger capacity was flat at 34.5 billion (ASK)s and the group’s passenger load factor increased +0.9 point (YOY) to 84.8% LF.

(LATAM)’s cargo traffic was down -9.2% to 824 million (RTK)s during the quarter; capacity decreased 5.9% to 1.7 billion (ATK)s; the group’s cargo load factor came in at 49.6%, down -1.8 points (YOY).

As of September 30, (LATAM) Airlines Group’s consolidated fleet comprised 339 aircraft: 244 Airbus A320 family aircraft, including the 1st A320neo delivered to an airline in the western hemisphere; 6 A330-200s and 5 A350-900s (2of which were delivered during the 3rd quarter). (LATAM)’s Boeing fleet includes 37 767-300s, 10 777-300ERs, 10 787-8s, 12 787-9s, 4 777-200F freighters and 11 767-300F freighters.

News Item A-2: Brazil Clears Qatar Airways - (LATAM) Tie-up, but is Wary of (LATAM) - (IAG) (JV)" by (ATW) Aaron Karp, November 17, 2016.

Conselho Administrativo de Defesa Econômica (CADE), Brazil’s competition authority, has approved Qatar Airways (QTA)’s investment in the (LATAM) Airlines Group, but the regulator has also expressed misgivings about (LATAM)’s proposed joint venture (JV) with the International Airlines Group (IAG).

The approval of (QTA) taking up to a 10% stake in (LATAM) worth >$600 million is welcome news for (LATAM), the largest Latin American airline company, which believes foreign investment and transnational (JV)s are critical to its future. But the delay in approval of a transatlantic (JV) with (IAG) carriers British Airways (BAB) and Iberia (IBE) (Oneworld (ONW) Alliance partners with (LATAM)) is concerning to (LATAM) (CEO) Enrique Cueto.

At the Latin American & Caribbean Air Transport Association (ALTA) Airline Leaders Forum in Mexico City, Cueto said major airlines in North America, Europe and Asia in well-established antitrust-immunized (JV)s have an advantage over Latin American carriers. “Everything comes to our region 5 to 10 years later,” he said. “Either we get into this [JV] model or we’ll be bought by others and we’ll disappear.”

Cueto said competition authorities and labor unions concerned about (JV)s should understand that (JV)s will enable Latin American airlines to guarantee services and jobs over the long term, while being bought out altogether would mean nothing is secure. “(JV)s will guarantee a lot more than people think,” he said.

(CADE) said earlier this month that a (LATAM) - (IAG) (JV) “has the potential to cause harmful effects on competition,” particularly on the São Paulo - London and São Paulo - Madrid routes. (LATAM)’s application to start the (JV) with (IAG) has been forwarded to (CADE)’s Tribunal, which has final say on mergers and acquisitions in Brazil. (CADE) has jurisdiction over the proposed (JV) because one of (LATAM)’s primary subsidiarys, (LATAM) Brasil (formerly (TAM)(TPR)) is based in Brazil. (LATAM) is also seeking approval for a (JV) with American Airlines (AAL), but (CADE) has not reviewed that application yet.

* Attracting capital

Meanwhile, the investment from (QTA) provides a shot in the arm to (LATAM), which has struggled financially in recent years as Brazil and Latin American’s other economies have faltered. Speaking at the (ALTA) conference, Deutsche Bank Analyst Michael Linenberg pointed out that (LATAM)’s market capitalization stands at $5 billion today, less than half of (LATAM)’s implied equity value of $12 billion, when Chile’s (LAN) Airlines announced in 2011 that it was acquiring (TAM) (TPR) to form (LATAM). The merger closed in 2012.

At the time, the combined (LAN) - (TAM) market capitalization was higher than any airline in the world. (LATAM)’s current $5 billion equity value is just one-seventh of Delta Air Lines (DAL)’s $35 billion market capitalization, according to Linenberg, a demonstration of how much the global airline industry has changed in the last 5 years. But Linenberg predicted airlines from around the world will continue to invest in Latin American carriers, which still appear poised for strong long-term growth. “There’s a huge amount of potential in the region,” Linenberg said. “You have a lot of carriers in the world looking to invest in the region.” He said the economic fortunes of Latin American airlines are starting to brighten. “It does feel like we’re seeing a bottom here,” he noted.

Latin American airlines have “become an industry that is attracting capital” from outside the region, Aeromexico (AMX) (CEO) Andrés Conesa said. (AMX) and (DAL) earlier this month received tentative approval from the USA Department of Transportation (DOT) for an antitrust-immunized cross-border (JV). (DAL) owns a minority stake in (AMX) that it has said could rise to as much as 49% once the (JV) is cleared.

Conesa said Latin American airlines are trying to take advantage of the (JV) model and outside investment, just as airlines have in Europe and the USA. European and USA carriers have gained significantly from a “very developed” transatlantic (JV) structure, he said, adding, “What we’re asking is to be on the same level as other airlines.” Conesa said the (DAL) - (AMX) (JV) “also makes sense for the consumer” and will create “an additional wave of traffic” for (AMX).

Panama-based Copa Airlines (COP) Holdings (CEO) Pedro Heilbron indicated that his company and other major Latin American airlines, such as Colombia’s Avianca (AVI), will also pursue (JV)s with carriers outside of the region. “As airlines such as (AMX) and (LATAM) get into (JV)s, it will put pressure on the other airlines in the region to do something,” he said. “We can’t be left out of the game.”

News Item A-3: "(LATAM), and Copa (COP) Seek to Get in Front of Latin America’s Low Cost Carrier (LCC) Trend" by Aaron Karp aaron.karp@penton.com, November 22, 2016.

The (LATAM) Airlines Group in revamping its fare structure to offer a basic economy (Y) option on domestic flights and Copa Holdings launching a low-cost carrier (LCC) (Wingo), signal a move toward (LCC) services in Latin America, even among the region’s largest airlines.

(LCC)s have transformed the domestic Mexican market in recent years, and (LCC)s have a strong foothold in the Brazilian market, but the model has not yet caught on in the rest of Latin America. However, that now appears to be changing, particularly in domestic markets and on short-haul flights. (LATAM) (LAN)/(TPR) and Copa (GOP)/(REU) - (Wingo) are trying to get in front of the trend.

“Passengers are looking for a low, low price, as they are in Europe, and that is going to be the fastest growing segment in our region,” (LATAM) (CEO) Enrique Cueto said during the recent Latin American and Caribbean Air Transport Association (ALTA) Airline Leaders Forum in Mexico City. “We cannot let that segment be taken by someone else.”

(LATAM) is not launching a separate (LCC), but in the 1st half of next year it will start rolling out an unbundled fare structure in the 6 domestic markets its affiliates serve (Brazil, Chile, Peru, Argentina, Colombia, and Ecuador). Passengers will be able to choose a basic fare up to -20% lower than current prices, with the option to pay fees for add-ons such as checking baggage or selecting a seat.
Cueto said he expects to see multiple (LCC)s emerging to serve passengers on short-haul routes in Latin America, and (LATAM) decided it was necessary to modify its fare structure to remain competitive on flights of 2 hours or less. He acknowledged that (LATAM)’s costs on most of the short-haul routes will still be +10% to +15% higher than a pure (LCC)’s costs. “That is acceptable because we want to keep business (C) passengers,” he explained.

Though at a cost disadvantage, (LATAM) will have a “revenue advantage” on the short-haul routes and will offer a product that will be cost competitive enough to keep business (C) passengers from switching to (LCC)s and entice leisure passengers to choose (LATAM), Cueto argued. “If business (C) people go to another carrier, you’re doomed,” he said. “The challenge is we want to keep the business (C) passengers, but we will not give up that [LCC] segment.”

Copa (CEO) Pedro Heilbron conceded the decision to launch Wingo, a (LCC) subsidiary of Copa Airlines Colombia (REU) that will start flying December 1, was an uncharacteristic move for him. “Doing this is like if I were to arrive at this event [the annual (ALTA) gathering of Latin American airline executives] with red pants, a yellow checkered shirt and a hat,” the impeccably dressed Heilbron joked.

Wingo will operate 4 Boeing 737-700s configured with 142Y seats in a single-class cabin on point-to-point services to 16 destinations in Latin America and the Caribbean. Wingo is a “tool” to enable Copa (COP)/(REU) to retain passengers on short-haul routes where there is a growing (LCC) presence, Heilbron said. “Wingo doesn’t need to be profitable to be positive for Copa Holdings,” he said. “If they break even, it will be positive for us. Of course, we expect them to be profitable.”

Enrique Beltranena, the (CEO) of Volaris (VLS), the ultra-(LCC) credited with leading the low-fares revolution in Mexico that has moved millions of bus passengers to airlines, said there has been “a transformation of travel needs” in Latin America. Volaris (VLS) will take its model to the Central American market with the launch of Volaris Costa Rica next month. “The proof is here” in Mexico that offering low fares will create new air travelers in Latin America, Beltranena said. “I believe we have proven [the model] and we can do something similar in the Central American region.”

However, he cautioned that the low cost carrier (LCC) model has its limits, predicting that traditional service will continue to be the norm on long-haul routes within Latin America and to/from Latin America. “I don’t fully understand the virtues of a long-haul (LCC)" Beltranena said. “I do not understand the model for long-range flights.”

Aeromexico (AMX) (CEO) Andrés Conesa said that once passengers get accustomed to air travel, they may eventually migrate to long-haul services on more traditional carriers. “These passengers that used to travel by bus are flying with (LCC)s, but in the future they may be flying with us,” he said.

December 2016: News Item A-1: "Qatar Airways Finalizes Stake in LATAM" by (ATW) Karen Walker, December 28, 2016.

(LATAM) Airlines Group (LAN)/(TPR) and Qatar Airways (QTA) have completed their transaction in which (QTA) has taken a 10% stake in the Latin America group.

The deal, which sees Qatar Airways (QTA) invest some $600 million through a capital increase in (LATAM), was completed December 28, (LATAM) announced. Both airlines are members of the Oneworld (ONW) global alliance. “The entrance of (QTA) as a shareholder of (LATAM) represents a unique opportunity to develop a long-term relationship and explore new opportunities for connectivity with Asia and the Middle East,” (LATAM) said.

The transaction was granted Brazilian regulatory approval in November. But (LATAM) is still waiting for approval of a transatlantic immunized joint venture (JV) with British Airways (BAB) and Iberia (IBE). Both European carriers are part of the (IAG) Group and are also Oneworld (ONW) Alliance members. (QTA) also has a 20% stake in the (IAG).

2 A350-941 (64, PR-XTF; 79, PR-XTG) ferried Rio de Janeiro to Qatar for Qatar Airways (QTA) lease.

February 2017: A319-132 (4563, PT-TMO), ex-(HC-CPQ), Bandurria Leasing leased.

March 2017: News Item A-1: Santiago, Chile-based (LATAM) Airlines Group reported a 2016 net profit of +$69.2 million, reversed from a net loss of -$219.3 million in 2015.

The (LATAM) Airlines Group is parent company to Brazil’s (TAM) (TPR) and Chile’s (LAN) Airlines, and their affiliates.

Full-year revenue for the group fell -6% year-over-year (YOY) to $9.5 billion, while operating expenses dropped -6.8% to $9 billion, producing an operating profit of +$5.7 million, up +10.5% (YOY).

(LATAM) Airlines turned in a 4th-quarter 2016 net profit of +$54.3 million, reversed from a -$16.3 million net loss for the year-ago quarter. Operating revenue for the quarter was up +6.7% (YOY) to $2.6 billion, while expenses increased +5.2% (YOY) to $2.4 billion, producing an operating income of $195 million, up +31% (YOY).

During the 4th quarter, (LATAM) Airlines (LAN)/(TPR) said it made “significant progress in its plan to reduce total fleet assets and fleet commitments, reaching the lowest fleet commitment levels in the recent history of (LATAM) Airlines for 2017 and 2018.” (LATAM) Airlines reduced fleet commitments for 2018 by $1.1 million and said it will also reduce existing fleet assets by returning additional aircraft as compared to the previous quarter fleet plan. “With this, the company will have reached $2.2 billion reduction in fleet assets for 2016 – 2018, in line with our previously announced plans to achieve a decrease of $2 to $3 billion in our expected fleet assets by 2018,” (LATAM) Airlines said.

(LATAM) Airlines described 2016 as “challenging, with weakening regional economies and recession in Brazil, devalued local currencies and high inflation rates in certain countries. Furthermore, Qatar (QTA)’s investment recognizes (LATAM) Airlines’s achievements and supports our project for the future, strengthening our conviction that we are on the right path to reach our goals.”

In November 2016, Brazil’s competition authority approved Qatar Airways (QTA)’ investment in (LATAM) Airlines. On March 8, the company said the joint business agreement with American Airlines (AAL) and the International Airlines Group (IAG) was approved.

In April 2016, the group unveiled a new unified livery, which is the culmination of the 2012 merger of Santiago, Chile-based (LAN) and Brazil’s (TAM) Airlines (TPR) under (LATAM) Airlines. The repainting of the entire fleet is scheduled to be completed in 2018.

During 2016, (LATAM) Airlines took delivery of 24 aircraft and returned 23, ending the year with an operating fleet of 329 aircraft. By the end of 2017, the company said it will operate a total fleet of 311 aircraft, and will have 7 aircraft under subleasing contracts.

In August 2016, (LATAM) Airlines became the 1st airline in the Americas to take delivery of an Airbus A320neo. (LATAM) Airlines’s A320neo is powered by Pratt & Whitney (PRW) (PW1100G) geared turbofan (GTF) engines. (LATAM) Airlines has 67 A320neo family aircraft on order.

Looking forward, (LATAM) Airlines said it will continue to implement its new travel model for domestic services gradually over the coming months. “During the 2nd quarter, (LATAM) Airlines will start to implement a branded fare model with clear attributes differentiation and payable ancillaries to provide to our customers more accessible prices and more alignment to their needs.” (LATAM) Airlines said it maintains its guidance for an operating margin of between 6% and 8% for full-year 2017.

April 2017: The Chairman of the board of directors of (LATAM) Airlines (LAN), Mauricio Amaro, wrote in a letter to investors that he may step down, saying that it was time for "renewal."

(LATAM) (LAN), formed via a tie-up between Brazil's (TAM) (TPR) and Chile's (LAN) in 2012, is the biggest Latin America-based airline. In 2016, it registered its 1st profitable year, despite an ongoing recession in Brazil, its principal market. "I'm very proud to have participated in the construction of this great company," Amaro wrote in the letter, which was made public late April 12th.

"But for (LATAM), renewal is the 1st word," he added.

Amaro did not give a timeline for his departure, nor did he state concretely that he would leave the board. But he hinted heavily at the possibility throughout the letter.

(LATAM) (LAN) declined to comment on the matter.

(LATAM) Airlines (LAN), which is based in the Chilean capital Santiago, has units in Argentina, Brazil, Colombia, Ecuador, and Peru, among other nations. Chile's powerful Cueto family and Qatar Airways (QTA) are also on the board.

May 2017: (LATAM) Airlines (LAN) received a 3rd of its revenue from within Brazil last year; 17% Chile, 12% Argentina, 10% USA.

A320-233 (2044, PR-MBL) returned to Macquarie AirFinance after lease.

August 2017: News Item A-1: (LATAM) Airlines Group’s route capacity and fleet management efforts, combined with a +10.6% rise in passenger revenues, helped to push its 2017 2nd-quarter operating profits to a company record of +$48.2 million, compared to +$1.3 million for (2Q) 2016.

However, (LATAM) (TPR) posted a -$138 million net loss for the quarter, deepened from its -$92.1 million net loss a year ago. (TPR) attributed the net loss -$120.2 million in foreign exchange losses recognized during the quarter, partially offset by lower income tax payments. (TPR) has reduced its total operating fleet by -5.2% so far in 2017, from 329 aircraft on December 31, 2016 to 312 on June 30, and said is it on track to reduce the fleet to 306 aircraft by the end of the year “ensuring [TPR] has the right level of capacity to match market conditions while maintaining a healthy balance sheet.”

During the quarter, (TPR) deferred 2 Boeing 787-9s and 3 Airbus A320 family aircraft, and converted orders of 2 A350-1000s into 2 A350-900s, shaving -$448 million off its fleet commitments for 2019. (TPR) is evaluating further fleet restructuring.

(TPR) is also capitalizing on its Latin American hubs by introducing new strategic point-to-point routes within the group’s domestic markets. 2 new routes connecting (TPR)’s Lima hub with Rio de Janeiro and San Jose, Costa Rica were announced during the (2Q), adding to 8 new routes announced in the (1Q). Summer service between Brasilia - Punta Cana and Santiago - Bariloche and Santiago - Punta del Este will also be implemented.

Additionally, the company’s new low cost carrier (LCC)-like domestic market travel model is gaining acceptance among passengers. The program, with branded fares, ancillary fees for checked baggage and preferred seating, and a buy-on-board “Mercado (TPR),” helped to push (TPR)’s (2Q) revenue to $2.3 billion, up +7.7% year-over year (YOY). Passenger revenue made up the bulk of that, growing +10.6% (YOY) to $1.9 billion. (TPR)’s cargo revenue slipped -1.3% during the quarter, to $256.5 million.

(TPR)’s consolidated operating expenses increased 5.5% to $2.2 billion, with significant cost rises in aircraft fuel expenses (up +9.1%), maintenance expenses (up +41.3% resulting from redelivery costs as (TPR) returned 7 leased aircraft during the quarter) and aircraft rental expenses (up +10.5% as the company has leased more modern aircraft (A321s, 787s, A350s) while reducing its leased A320s, A330s and Boeing 767s since (2Q) 2016). Since the end of (2Q) 2016, (LATAM) has reduced its fleet of leased aircraft by -9.

(TPR)’s consolidated system traffic increased +0.9% during the quarter, to 35 billion (RPK)s, as capacity decreased -3.1% to 47.4 billion (ASK)s, producing a systemwide load factor of 73.9% LF, up +2.9 points (YOY). Yield increased +8% (YOY) to 6.1 cents. (RASK) increased +12.5% (YOY) to 4.5% and (CASK) was up +8.6% to 4.9 cents. (CASK) ex-fuel increased +7.6% (YOY) to 3.8 cents.

November 2017: News Item A-1: As in-flight connectivity provider Gogo continues the rollout of its latest satellite-based in-flight internet technology, it is also working to upgrade its air-to-ground system with faster speeds.

Gogo said it logged a successful test flight equipped with its latest air-to-ground in-flight internet offering, (ATG-NG). It uses a network designed to provide faster speeds to customers flying throughout North America on regional and business aircraft, and will be available next year.

The test was performed on Gogo’s own aircraft, spokeswoman Meredith Payette told (ATW) sister publication Aviation Daily. The company expects the upgrade will provide an experience similar to its latest satellite-based product, "2Ku," and deliver peak speeds of >100 Mbps per aircraft via a new antenna and modem. It is too early to tell how quickly each device will be reached, she noted.

Gogo has focused on ramping up (2Ku) installations this year. 14 carriers have committed to outfitting >1,900 aircraft with the technology, including Delta Air Lines (DAL), Alaska Airlines (ASA) and LATAM Airlines Brazil (TPR). (2Ku) had been installed on >320 aircraft as of October 31, Gogo reported in its 3rd-quarter earnings update. Gogo installed (2Ku) on 76 aircraft in October alone.

“We are on target to reach our guidance of 450 to 550 (2Ku) installations for the year,” (CEO) Michael Small told investors during a November 2 earnings call. About 1 3rd of the commercial North American fleet will be connected with (2Ku) by the end of 2018, he added.

Small noted that Gogo is changing its strategy as higher-bandwidth technology takes to the skies, focusing on increasing engagement throughout the aircraft, instead of primarily on driving yield via business travelers.

“Quite simply, we’re switching from maximizing yield (the business traveler segment) to a strategy that engages the entire aircraft, and I’m very pleased with how that’s going,” he said.

Take rates for Gogo’s technology are expected to increase as higher bandwidth improves the customer experience, Small noted. In the commercial North American market, this figure rose to 7.5% year-over-year from 6.5%. This is in part due to an expanded partnership with T-Mobile, and programs to offer free messaging through web apps on Delta (DAL).

Gogo’s 3rd-quarter net loss widened 36% year-over-year to $45.3 million. Revenues increased +17% year-over-year to $172.9 million.

March 2018: (LATAM) doubles profit in 2017 as low-cost domestic model lifts revenue.


Click below for photos:
TPR-767-300ER - 2013-07
TPR-767-300ER - 2014-02
TPR-777-300ER - 2015-07.jpg
TPR-787 - LAN - 2013-05
TPR-787-9 - 2016-11.jpg
TPR-A319 AT RIO - 2013-10
TPR-A319 SEP06
TPR-A320neo New Livery - 2016-07.jpg
TPR-A330-223 - 2014-08
TPR-A350 XWB - 2015-09.jpg
TPR-A350 XWB - 2016-05.jpg
TPR-A350-900 - 2015-06.jpg
TPR-F 100
TPR-F 100-A

March 2018:

1 767-316ER (CF6-80C2) (27615, PT-MOH), EX-(CC-CRV), (LAN) LSD 2015-06. 10F, 28C, 181Y.

8 767-33AER (CF6-80C2B6F) (560-27376, /94 PT-MSU, 561-27376, /94 PT-MSR; 584-27468, /95 PT-MSQ), ALL WITH "THE MAGIC RED CARPET" TITLES, (AWW) LSD 2008-09. 27468; TO (LAB) 2014-08. 30C, 175Y.

10 +2 ORDERS 777-32WER (GE90-115B) (727-37664, /08 PT-MUA; 733-37665, /08 PT-MUB; 740-37666, /08 PT-MUC; 751-37667, /08 PT-MUD; 1036-38886, /12 PT-MUE; 1042-38887, /12 PT-MUF; 1052-38888, /12 PT-MUG; 1059-38889, /12 PT-MUH), ALL WITH "THE MAGIC RED CARPET" TITLES, 4F, 56C, 302Y.

2 767-316ER (41993, PT-MSX; 42214, PT-MSY), EX-(CC-BDK & CC-BDL), (LAN) LSD 2013-05.

0 MD-11F (603-48769, PT-MSJ), (TBC) LSD. RTND, LST (ETH). FREIGHTER.

2 +1 ORDER MD-11ER (613-48755, PT-MSH; 615-48758, PT-MSI), (TBC) LSD.


20 ORDERS A318, TO REPLACE F 100'S. 120 PAX:

2 A319-112 (CFM56-5B6) (3727, PR-MYB; 3733, PR-MYC), (SIL) LSD 2008-12. 144Y.

3 A319-132 (V2524-A5) (976, /99 PT-MZA; 1010, /99 PT-MZB), (BOU) LSD. 144Y.

20 +7/10 OPTIONS A319-132 (V2524-A5) (1079; 1092, /99 PT-MZC; 1096, /99 PT-MZD; 1103, /99 PT-MZE - -SEE ATTACHED PHOTO - - "TPR-A319-2008-10;" 1139, /99 PT-MZF; 1143, /00 PT-MZG; & 1158, /00 PT-MZH; 1575, N475TA, EX-(TAC) 2006-11; 1608, /01 PR-MAH; 1703, /02 PR-MAI; 1801, /02 PR-MAL; 1826, /02 PR-MAM; 1831, /02 PR-MAN; 1837, /02 PR-MAO; 1855, /02 PR-MAQ; 2467, PT-TMF, 2010-08; 2887, PT-TML, 2015-05; 4000, PT-TMA, 2009-08; 4163, PT-TMB, 2010-02; 4171, PT-TMC, 2010-02; 4192, PT-TMD, 2010-03; 4389, PR-TME, 2010-07). (1703, PR-MAI, 2002-05) (1919; 1930; 1952; 1985; 3032). 144Y.

1 A319-132 (4563, PT-TMO), EX-(HC-CPQ), BANDURRIA LEASING LSD 2017-02. 144Y.

49 ORDERS A320-200 FAMILY APLS (CFM56-5B):

32 ORDERS A320 INCL 22 A320NEO:

42 ORDERS (2016-02) A320neo (PW1100G-JM) FAMILY AIRPLANES:

1 A320-200 (CFM56-5B4), (ILF) 6 YR LSD.

10 A320-214 (CFM56-5B) (1717, PR-MHC; 1775, PR-MHD; 2416, PH-MHE; 3002, PR-MHG, (TCI) LSD 2007-01; 3035, PR-MHI; 3047, PR-MHJ; 3058, PR-MHK, 2007-03; 3111, PR-MHL, 2007-04; 3211, PR-MHM, 2007-08; 3266, PR-MHP, 2007-10; 3284, PR-MHQ, 2007-10; 3313, PR-MHR, 2007-10; 3391, PR-MHU, 2008-02; 3662, PR-MYA, 2008-02; 3908, PR-MYE, 2009-05; 4417; 4465; 4470; 4482; 4498). 174Y.

1 A320-214 (CFM56-5B4) (2740, PR-MHF), (VUS) LSD 2006-12. 174Y.

1 A320-214 (CFM56-5B4) (3037, PR-MHL), (VUS) LSD 2007-05. 174Y.

1 A320-214 (CFM56-5B4) (3156, PR-MBO), MACQUARIE LSD 2007-06. 174Y.

5 A320-214 (CFM56-5B4) (3240, /07 PR-MHN; 3972, /09 PR-MYF; 4446, /10 PR-MYI; 5209, /12 PR-MYU; 5222, /12 PR-MYV). 174Y.

4 A320-214 (CFM56-5B4) (3278, PR-MHO, 2007-10; 3325, PR-MHS, 2007-12; 3750, PR-MYD, 2009-01; 4320, PR-MYG, 2010-06), 3325 LST AIR CORSICA 2015-11. RBS AEROSPACE LSD. 174Y.

1 A320-214 (CFM56-5B4) (5883, PR-TYH "20 ANOS TAM FIDELIDADE AIRBUS A320"), TUCUQUERE LEASING LSD 2013-12. 174Y.

1 A320-214 (CFM56-5B4) (EX-(F-WWIO), Gaviota leased 2013-06. 174Y.

7 A320-231 (V2500-A1) (243, /91 PT-MZP; 249, /91 PR-MAF; 251, /91 PT-MZS; 250, /91 PT-MZO; 440, /93 PT-MZN; 334, /92 PT-MZR; 335, /92 PT-MZQ, 2001-07; PT-MZU, 2001-07), EX-(SAA), (FLL)/(GAX) LSD 2000-12. 249; RTND, LST (MOL) 2007-09. 174Y.

1 A320-232 (V2527-A5) (453, PT-MZM), EX-(AMW), (TCI) LSD 2001-06. 174Y.

1 A320-232 (V2527-A5) (758, /97 PT-MCV), EX-(QTA), (SIL) LSD 2001-08. 174Y.

22 +1/10 ORDER A320-232 (V2527-A5) (1104; 1105; 1123) (1246, /00 PT-MZI; 1251, /00 PT-MZJ; 1368, /00 PT-MZK; 1376, /00 PT-MZL; 1486, /01 PT-MZT; 1518, /01 PT-MZU; 1580, /01 PT-MZW; 1593, /01 PT-MZZ; 1595, /01 PR-MAA; 1613, /01 PT-MZX; 1771, /02 PR-MAD; 1804, /02 PR-MAE; 2513, PR-MAZ, 2005-08; 2602, PT-MAX, 2005-10; 2838, PR-MBD, 2006-07; 2859, PR-MBE, 2006-08; 2896, PR-MBF, 2006-09; 2904, PR-MBH, 2006-10; 2924, PR-MHA, 2006-10; 3180, PR-MHF, 2007-07). 174Y.

4 A320-232 (V2527-A5) (1652, PR-MBQ, 2007-09; 1802, PR-MBR, 2007-09; 1835, 2007-11), EX-(JBL), LSD. 174Y.

3 A320-232 (V2527-A5) (1857, /02 PR-MAP; 2661, PR-MAY, 2006-01; 2737, PR-MBB, 2006-04), (TCI) LSD. 174Y.

2 A320-232 (1888, /02 PR-MAR; 2783, PR-MBC, 2006-05), (SIL) LSD. 174Y.

3 A320-232 (V2500-A1) (2372, PR-MAS, 2005-03; 2393, PR-MAT, 2005-03; 2734, PR-MBA, 2006-04), (BOU) LSD 2005-03. 174Y.

1 A320-233 (789, PR-MBK, 2006-12, W/O & DESTROYED IN CRASH 2007-07; 916, PR-MBL), (PSS) LSD. 174Y.

1 A320-233 (1339, N463TA), EX-(TAC), LSD 2007-05. 174Y.

1 +1 ORDER A320-233 (1877, PT-, 1903, PT-). 174Y.


1 A320neo (2016-08 - SEE PHOTO "TPR-2016-08 - A320neo Delivery.jpg."

1 A321-211 (6592, PT-XPC), EX-(D-AVXK) 2015-05. 220Y.

11 A321-231 (V2533-A5) (3222, /07 PR-MXA; 3229, /07 PR-MXB; 3294, /07 PR-MXC; 3761, /09 PT-MXD; 3816, /09 PT-MXE; 4352, /10 PT-MXF; 4358, /10 PT-MXG; 4570, /11 PT-MXH; 4662, /11 PT-MXI; 5528, /13 PT-MXJ; 5987, PT-MXM, 2014-02). 220Y.

1 +6 ORDERS A321-231 (V2533-A5), WITH SHARKLETS. 220Y.

0 A330-203 (CF6-80E1A3) (466, /02 PT-MVF; 472, /02 PT-MVG; 477, /02 PT-MVH; 486, /02 PT-MVK; 700, /05 PT-MVL - - SEE INCDT IN 2013-09), (GEF) LSD. ALL 5 SCHEDULED PAX OPS ENDED 2016-04. 4F, 36C, 183Y.

00 A330-223 (PW4168A) (232, /98 PT-MVA; 238, /98 PT-MVB; 247, /98 PT-MVC "THE MAGIC RED CARPET;" 259, /99 PT-MVD; 361, /00 PT-MVE; 869, PT-MVM, 2007-11; 876, /07 PT-MVN; 949, /08 PT-MVO; 961, /08 PT-MVP; 968, /08 PT-MVQ; 977, /08 PT-MVR), 232; 238; WET-LST (CHI). 232; 238; WET-LST (SAA) 2003-12. 232; 238 RF (SAA), WET-LST (EHD) 2004-06. ALL 11 SCHEDULED PAX OPS ENDED 2016-04. 4F, 36C, 183Y.

0 A330-223 (PW4170) (1112, /10 PT-MVS; 1118, /10 PT-MVT; 1213, /11 PT-MVU; 1221, /11 PT-MVW), ALL 4 SCHEDULED PAX OPS ENDED 2016-04. 4F, 36Y, 183Y.

0 A330-243 (TRENT 772B-60), (287, /99 PT-MSE; 334, /00 PT-MSD), RTT (GUL) 2002-07. 18F, 36C, 171Y.

2 A340-541 (TRENT 553-61) (445, /03 PT-MSN - SEE PHOTO; 464, /03 PT-MSOL), EX-(ACN) 2007-08. 42C, 225Y.

4 +23/5 A350-900 XWB (TRENT XWB) (24, /15 PR-XTA, 2015-12; 048, 2016-10; 64, /17 PR-XTF; 79, /17 PR-XTG) (OPS BY LATAM AIRLINES BRAZIL (TPR)), 64 & 79 FERRIED TO QATAR FOR QATAR AIRWAYS (QTA) LEASE 2017-02. 30C PREMIUM BUSINESS, 318Y ECONOMY.

0 F27-500 (10341; 10632; 10634) ST (TUL) 1999-09.

0 F27-500F. 1 RTND.

0 F27-600. 3 RTND.

0 F 50 (20182; 20192; 20202; 20210; RTND DASA 2000-01) (20220, 2000-05).

3 F 100 (TAY 650-15) (11512; 11517; 11527, EX-(PNM) (11383, PT-MQD; 11389, PT-MQE; EX-(CEA), 11521 RTND 2002-11. 11502 W/O 2002-08. 11443; 11451; RTND 2003-02. 11442 RTND 2003-05. 11452 RTND 2003-08. 11383; 11389; LST U AIR 2003-12. 11527 RTND 2004-07. 11322; 11350; 11351; RTND 2004-09. 11301; 11505 RTND 2004-11. 11516; 11518; RTND 2005-08. 108Y.

6 F 100 (TAY 650-15) (11394; 11401; 11421; 11423; 11429; 11430; 11431), EX-(CEA). 11431 RTND 2004-05. 108Y.

2 F 100 (TAY 650-15) (11264, PT-MRJ; 11265, PT-MQQ), EX-(SEM), (GEH) 118 MTH LSD 1999-08. 108Y.

3 F 100 (TAY 650-15) (11326, PT-MQV; PT-MQW; 11451, PT-MRJ; 11462, PT-MRS; 11470; 11472, PT-MRP), LSD 2000-10. 11326 RTND FOKKER 2004-07. 11470 TO (ELG) 2005-06. 11421; TO (TAM) MUSEUM AT SAO CARLOS 2010-08. 108Y.

3 F 100 (TAY-650-15) (11424), EX-(ALB) 2001-08, 11422 RTND 2002-12. 108Y.

25/75 ORDERS ERJ 195-200 (2004-02).

44 CESSNA 208B GRAND CARAVANS, 2 EX-(ITP) 1998-11.




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LATAM (LAN)/(TPR) (CEO), Enrique Cueto has had a hectic three years managing the merger of (LAN) and (TAM) (TPR) to create Latin America’s biggest airline. While many challenges specific to this region persist, Cueto said he sees huge opportunities ahead for the combined carrier.


For an airline chief who oversees Latin America’s biggest airline group, Enrique Cueto’s office on the 19th floor of a building in Santiago’s Las Condes neighborhood is surprisingly modest. Airplane models and family photographs line the cramped shelves behind his glass-topped desk, and the window looks out to the Araucano park across the street. The only indication of Cueto’s 30-year illustrious career in the airline industry is the wall beside his desk, adorned with framed newspaper articles and magazine covers bearing his photograph.

In those 30 years, the Latin American airline industry has gone through several rounds of consolidation. Carriers have merged, many have folded, and yet more new airlines have sprung up against a backdrop perpetually clouded by concern over government regulation and infrastructure challenges. However, few airlines have made the same sort of headlines that (LAN) and (TPR) did three years ago, when they announced their plans to merge to become the (LATAM) Airlines Group.

With local affiliates in seven markets (Argentina, Brazil, Chile, Colombia, Ecuador, Paraguay, and Peru) (LATAM) is Latin America’s largest airline. The merged carrier posted $13.3 billion in revenues in 2012, placing it among the world’s top 20 airlines by revenue. However, one would be wrong to assume that Cueto is resting on his laurels. Consolidation has its pains, as he would find out during the first year of (LATAM), which closed its merger in June 2012.

Severe depreciation of the Brazilian real and sky-high fuel prices in Brazil were among some of the issues Cueto encountered head on in the first year of (LATAM)’s merged operations. “These issues were more difficult than we expected at the beginning,” said Cueto.

Other challenges that (LATAM) faced in Brazil, included the continued slowness in sales of Europe-bound flights as well as competitive capacity to the South American country mounted by USA airlines. “The results were below our expectations,” Cueto said of the first year of operations in the Brazilian market.

When (LAN) and (TAM) (TPR) merged, Cueto inherited a Brazilian carrier that was growing at about +10% a year, a rate that he knew was not sustainable as the market grappled with overcapacity. Cueto oversaw a series of actions to bring rationality back to the domestic Brazilian market, including significant capacity cuts. (ASK)s were lowered by -1% in 2012, and they will go down by at least -7% this year. As a result, load factors went up to about 80% LF from a range of 60% LF to 65% LF.

“We increased our (RASK) and now we feel really comfortable about how we are managing the domestic Brazil market, which is around one-third of our (ASK)s,” said Cueto.

He reduced the frequency of (TAM)’s flights to Europe, bumped up flights to the USA and replaced the Airbus A330s on (TAM)’s international flights with Boeing 767s, which have lower operating costs. The 767s, configured with lie-flat seats in business (C) class, also offer an improved product on these routes.


Airplanes and capacity aside, Cueto was confronted with the task of melding two different airline cultures together. “When we announced the merger, some part of the management team in (TAM) preferred to leave the company, they didn’t think it was a good idea,” said Cueto. “And things happen. We had the same experience in (LAN).”

Changes soon followed, and Cueto said 80% of (TAM)’s management is new, with many executives hired from outside the carrier. He believes that (TAM)’s current team, a mix of experienced airline veterans and fresh blood from outside the industry, is the right formula the carrier needs to move forward. “With this new group of people, we feel happy. We really feel comfortable.” Now that (LATAM) has a firm grasp on the domestic ­Brazilian market, Cueto is looking to the next big development – a new terminal at São Paulo Guarulhos airport that could create the combined airline’s biggest hub besides Lima. The new terminal is expected to ease the airport’s trademark congestion, and presents a “big opportunity” for (LATAM), Cueto believes. “For many years, the Guarulhos airport has been saturated. If you tried to create a hub there, you will realize it’s impossible.”

However, the new terminal, which many hope will be ready before the 2014 (FIFA) World Soccer Cup, will help change that. “It is going to increase the number of operations per hour,” said Cueto. “You have a huge amount of local traffic, and we will have the opportunity to connect to all the (LAN) affiliates in Argentina, Chile, Peru, Colombia and others. Plus, you have the domestic Brazilian traffic.”

Being able to create a large hub at São Paulo will help put in place a vital piece of the puzzle in the integration of (LAN) and (TAM)’s networks. With a strong hub in São Paulo, (LATAM) will feed it regional traffic from its (LAN) affiliates and from other cities in Brazil. This will help the airline group compete more effectively with foreign carriers, such as those in Europe.

“If you don’t have some feeding, some connectivity, some hub in that place, it’s impossible to compete with European carriers, who are flying from their hub in London or Paris… We were flying from Rio to Paris, without an agreement with AirFrance (AFA). Those flights were difficult to sustain in the long term, because you don’t have a strategic competitive advantage to do that,” said Cueto.

Having a strong hub in São Paulo will also help make (LATAM) the top carrier that airlines outside the region would want to partner with, Cueto believes. Despite (LATAM)’s powerhouse status in Latin America, Cueto has no illusions about his airline’s position in the world. “We are not going to be the main player in long-haul operations,” he says. “We prefer partnerships, to give passengers the best way to be in any part of the world in the best form.”

The main point of the merger of (LAN) and (TAM), he reiterates, is to create “a very strong airline in one continent.” Cueto pointed out that the best way for a passenger traveling from, say Chile to China, is still through Europe. “We don’t have any advantage in this area, so our strength must be the intra-South American traffic,” he said.


(LATAM)’s objective is intricately linked to its decision to group all of its airlines under the Oneworld (ONW) Alliance, announced in March. (LAN) was already in the (ONW) alliance before it merged with (TAM), which was a Star (SAL) Alliance airline. Conditions imposed on the merger required (LATAM) to be in a different alliance from the other major Latin American airline, Avianca (AVI), which became a Star (SAL) Alliance member in June 2012.

While (LATAM) had the option of being an airline unaffiliated with any alliance, Cueto said American Airlines (AAL)’s membership in the (ONW) alliance sealed the deal. (AAL) has a hub in Miami, which is considered the traditional gateway to Latin America from the USA.

“By far, for the Spanish speaking countries, Miami is the main gateway for the Latin American people,” said Cueto. “Who goes to Houston to connect? Miami has one name. American. So if you look at connecting traffic, distribution, and offering our passengers more destinations, Miami is the best place to do that.”

Cueto said it is “difficult to understand what happened” with the USA Department of Justice’s challenge against the American Airlines (AAL)-US Airways (AMW)/(USA) merger (a settlement for which has just been brokered). “If they merge with US Airways (AMW)/(USA), we will have a conversation with them on that, and we will be very happy to co-operate and partner with them too,” he said.

Despite the (ONW) alliance affiliation, Cueto is not closing the door on partnering with airlines outside the alliance. (LATAM) has code share agreements with non-Oneworld (ONW) Alliance airlines, such as Aeromexico (AMX) and Alaska Airlines (ASA), and Cueto does not rule out more.

While Cueto is open to partnering with other carriers, he remains certain of one thing ((LATAM) does not plan to bring another airline into its fold). “I think there will be more consolidation in the region. But we don’t plan to be a part of it.” In his 30-year airline industry career, Cueto has often spoken out against government intervention and protectionism in the aviation sector. While he says that certain governments in the region have made necessary changes in recent years, he believes there remains much work to be done.


(LATAM) knows a thing or two about dealing with protectionist actions in the countries it operates in. Earlier this year, (LAN) Argentina (LNR) was faced with the threat of eviction from a hangar it leases at the downtown Buenos Aires Aeroparque airport. Argentinian airport regulator (ORSNA) had told (LAN) to vacate the hangar within 10 days, despite an existing lease agreement which allows (LAN) to remain until July 2023.

(LAN) Argentina (LNR) has a 27% share of the country’s market and employs 2,780 staff in the country. Observers linked the eviction threat to individuals loyal to loss-making, state-owned carrier Aerolineas Argentinas (ARG). The dispute prompted (LATAM) to issue a public statement vowing legal action, a move that departed from the usually diplomatic remarks the airline has made in past skirmishes with the Argentinian authorities.

Rationality on the part of the Argentinians looks to have prevailed, and (LATAM) says it is staying on in the hangar. Cueto pointed out that (LAN) Argentina (LNR) received strong support in Buenos Aires, including that of key politicians, the media and other opinion leaders.

He also singled out government regulations in the region which, he believes, make Latin American airlines less competitive than carriers in other parts of the world. For example, he said pilots (FC) in Brazil are required by law to fly fewer hours a year than pilots (FC) for airlines in other countries.

“We think Brazil must have "open skies" with the world,” said Cueto. “But when you say you are going to be open to the world, you have to be competitive at the same time. The competitiveness has not been moving.”

What is perhaps most frustrating to Cueto, though, is Latin American governments’ wariness of joint ventures and code share agreements between airlines. “For them [the governments], any consolidation in the region, any code sharing is in some way considered anti-competitive,” he lamented.

“We are behind the USA and Europe, when it comes to these antitrust issues. Their operating system is version 3.0, Chile is perhaps version 1.5, and in some places, it’s version 0.”

Despite the challenges of operating in the Latin American market, Cueto pointed out that there are many opportunities in the region, and he is not giving up the fight any time soon. He smiled wistfully when asked if he has thoughts about retirement. “I have a lot of work in the next two to three years,” he said. “I would like to continue after that, but perhaps not in this current position.”

Cueto’s family, which owns a stake in (LATAM), has interests in other industries as well. However, he said that he and his brother Ignacio ((CEO) of (LAN)) could not imagine leaving the airline business.

“We dedicate most of our time to this, and we are happy to do only this. No other industry can compare, there are so many issues to challenge us, especially in this part of the world. But we are happy.”









(TELEPHONE: (55-11) 5582-8677)
(FAX: (55-11) 5581-2526).











anna-aero's Vlad Cristescu Interview conducted 2014-05:
The LATAM Airlines Group, the parent company of Brazil’s (TAM) Airlines (TPR) and Chile’s (LAN) Airlines, which when combined account for almost 40% of weekly seat capacity in South America, has recently chosen membership of the Oneworld (ONW) Alliance over the Star (SAL) Alliance. This comes as a result of the Chilean anti-trust authorities forcing (LATAM) to leave one of the alliances as part of their merger agreement, as (LAN) was already a member of Oneworld (ONW) Alliance since 2000, while (TAM) (TPR) belonged to the Star (SAL) Alliance. On March 31st, its Brazilian arm officially joined (ONW), giving anna.aero’s Vlad Cristescu a chance to catch up with (LATAM) Airlines Group’s Commercial Director UK & Nordic Countries, Martin Modarelli, during a special drinks reception organized in London.

anna.aero (aa): What are your major commercial plans for 2014?
Martin Modarelli (MM): Our major aim this year is to increase the awareness of (LATAM)’s long-haul flights to South America, with a strong emphasis on the London Heathrow - Sao Paulo Guarulhos daily operations. We believe there are great opportunities to develop South America as a niche destination from Europe; therefore my aspirations are to increase the leisure passenger numbers this year. This said, we have not only started working with Tourism Boards to reach our final consumers, but we are also offering competitive packages of £999 for seven nights to Brazil.

aa: Why did you choose membership in Oneworld (ONW) over the Star (SAL) Alliance?
MM: We evaluated all the existing possibilities and chose the alliance that offers the greatest network and distribution benefits in both North America and Europe, which in this case is (ONW) (the biggest and most successful global alliance over the recent years).

aa: What is (LATAM)’s network planning focus? What new routes would you like to develop as part of your ongoing strategy in the next months?
MM: (LATAM)’s ongoing strategy is to consolidate its presence in the European markets that are currently served (London Heathrow, Paris (CDG), Frankfurt, Milan Malpensa, and Madrid. In the short-term, we don’t have any plans to opening any new routes, however, we will start evaluating a number of potential new services once our future airplane orders arrive.

aa: How many airplanes is (LATAM) going to incorporate into its fleet as part of the future order?
MM: We are expecting a total of 32 more 787-8s/787-9s, along with 22 A350-900s to join (LATAM)’s fleet in the next few years, with the latter being our main choice for operating future long-haul flights. In addition, the A350s will replace the existing long-haul fleet, including our A330s and A340s, providing passengers with a more efficient and enhanced product.

aa: What is the directionality like from your European destinations to South America?
MM: Currently, it can be defined as an 80 - 20 split between passengers originating from Europe, heading mainly to Guarulhos in Brazil, which gives us an idea about the huge opportunity we have to continue growing. In fact, our target for this year is to achieve a 70 - 30 split.

aa: According to (LATAM)’s preliminary monthly results for March 2014, international passenger traffic decreased by -2.2%, while capacity went down by -8.1%, when compared to the corresponding month of 2013. What has caused this decline?
MM: This decline came as a result of the cancellation of (TAM) (TPR)’s operations from Frankfurt and (CDG) to Rio de Janeiro Galeao, due to the operational rationalization of our long-haul network. Following the withdrawal of these services last summer, (LATAM)’s revenue with regard to international flights decreased less than the downsized capacity. Furthermore, the international load factor went up +5% to 84.4% LF, when compared to the corresponding month last year.

aa: Could you tell us how the bookings for the (FIFA) World Football (soccer) Cup are going?
MM: Our Brazilian destinations have received an extremely large interest during the (FIFA) World Cup, with the UK bookings being four times higher when compared to last June’s. In order to accommodate this massive demand, on June 4th we are going to re-launch the thrice-weekly flights from London Heathrow (LHR) to Galeao that will be operated until July 18th. Moreover, examination of June’s bookings indicates that around 27,000 English football fans are likely to be part of the legendary competition this year.







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