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News & Advice

2012 merger date for Brazil, Chile airlines: CEO

The merger of Chile's LAN and Brazil's TAM airlines will take place early next year, said Ignacio Cueto, chief executive of the Santiago-based air carrier.

"We hope that the tie-up will take place in the first quarter of 2012," he said at a forum of business leaders here.

An anti-trust court on Wednesday approved the merger of the two airlines under certain conditions, which if agreed to, would create Latin America's largest air carrier.

The merger was first unveiled last year but was challenged by Chilean consumer organization Conadecus, which warned that the deal could undermine competition and lead to higher ticket prices.

Chile's anti-trust court, in a split decision, approved the merger, but said in its ruling Wednesday that the new company must conform to 11 conditions to ensure "effective competition in Chile's aviation market," including allowing other carriers on some routes currently dominated by the two airlines, particularly between Santiago and Sao Paulo.

LAN and TAM, already two of the largest airlines in South America, said the new company, LATAM airlines, would be one of the 10 largest in the world.

The new carrier would have combined revenues of more than $8.0 billion and fly passengers to 115 destinations in 23 countries.

It would have a combined workforce of 40,000 employees and a fleet of more than 240 aircraft.

Brazil's National Agency for Civil Aviation approved the merger in March, while the Brazilian competition regulator has yet to issue a ruling.