Company Watch - TAM Airlines.

May 14, 2007

The alliance apparently will not cover flights to the US and Europe. TAM 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 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. May 10, 2007

According to ANAC, TAM registered 37.1% growth in domestic RPK (demand) compared to the same period last year, and 31.7% increase in domestic ASK (supply). In April, market demand increased 20.3% and market supply increased 19.2%. TAM registered domestic market share (RPK) of 50.7%, a 6.2 p.p. increase compared to the same period in 2006. TAM's domestic load factor was 76.2%, 3.2 p.p. higher than the market average 73.0%. May 8, 2007

TAM will start flights to the city of Criciuma, state of Santa Catarina, as of May 21, 2007. This route will be operated from Diomicio Freitas Airport, in Forquilinha, flying straight to Florianopolis and Brasilia. TAM is expanding its network, offering flights to 49 destinations throughout Brazil. Taking into consideration commercial agreements with regional companies, TAM is now able to reach 76 domestic destinations. May 8, 2007

TAM and LAN yesterday 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 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 and TAM Mercosur, 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." May 10, 2007

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May 7, 2007