LAN Airlines in Chile and Brazil's TAM airline have announced in a joint statement that they have entered into a non-binding memorandum of understanding that outlines their intentions to combine holdings under a single parent entity.
The combination of the two groups is set to offer a seamless passenger and cargo service across the continent and the globe, under the name LATAM Airlines group.
Included in the new operation will be LAN Airlines and its affiliates in Peru, Argentina and Ecuador, LAN Cargo and its affiliates, TAM Lineas Aereas, TAM Mercosur and all other holdings.
As part of the agreement, each of the airlines in the group will continue to operate under its existing operating certificates and brands, with TAM continuing to operate as a Brazilian company with its own structure and the current holdings of LAN operating as an independent business unit.
'This is the completion of the vision of our founder, Captain Rolim, who believed that in an open skies market, a large Latin American airline group would provide much more competitive services to our passengers and cargo customers' said Marco Bologna, CEO of TAM. 'Combining our strengths and complementary networks will bring great benefits to our customers, employees, shareholders and Latin America. Together, LAN and TAM will be able to offer new destinations that neither company could have supported on its own. This will position us to compete with the foreign carriers that continue to increase service to our region while creating new jobs in our home countries.'
Enrique Cueto, CEO of LAN Airlines added: 'Today is a great day for LAN, our customers, our employees and our shareholders. Together we have built LAN into a true leader in Latin America. We have much to be proud of and much to be thankful for. But as the industry consolidates, we cannot stand still. Today we announced our intention to join forces with our friends at TAM, setting forth on a journey that will create one of the leading airline groups in the world.
'We have great admiration and respect for our friends at TAM and have enjoyed many years of collaboration,' he added. 'They share our passion for service, for integrity and our belief in the great potential of the Latin American market. With this combination, we take two Latin American leaders and create a global leader that will make Latin Americans proud.'
The combined airline group would provide passenger services to more than 115 destinations in 23 countries while providing cargo services throughout Latin America and across much of the globe. The airlines of the group would operate a fleet of more than 220 aircraft, and have more than 40,000 employees.
