LATAM Airlines : TAM announces the expansion of its regional operations and negotiates new aircraft purchases

Santiago, Chile, December 19, 2014 - The chairman of the board of directors of TAM S.A., Marco Antonio Bologna, and the CEO of TAM Airlines, Claudia Sender, announced today that TAM will invest in regional aviation in Brazil during 2015, independent of any regulatory changes that may be implemented by the Brazilian government through the Regional Aviation Development Program (PDAR). This decision has already been included in the strategic plans of LATAM Airlines Group for the future.

TAM plans to add service to between 4 and 6 new regional destinations every year, starting in 2015. For this purpose, the airline is currently in the advanced stages of negotiations with aircraft manufacturers, including Embraer, the Brazilian manufacturer of the new generation of EJet2, whose proposal includes 18 firm aircraft orders and 12 options. The airline plans to conclude these negotiations by the end of the first quarter of 2015. "Our plans call for the use of new-generation aircraft," said Bologna. "Now we only need to conclude these negotiations with competitive prices and adequate financing conditions". This initiative by TAM will further consolidate its position as the airline that most invests in Brazil.

"Regional aviation is where we started; it is in our corporate DNA. We serve cities in the so-called average-density markets and, therefore, we are already established in this segment," said Sender. "Given its vast size, regional aviation is vital to Brazil," she noted, before concluding that, to TAM, developing airport infrastructure in smaller cities is more important than the subsidy model the government plans to regulate.  

TAM is playing an active role in expanding domestic aviation in Brazil by investing US$4.6 billion in its fleet through 2018, with orders for over 50 new aircraft. It is important to note that these investments do not include the ongoing negotiations. As mentioned above, the carrier is also evaluating other regional aircraft options to strengthen its presence in this market. Until then, the airline will operate regional routes using leased aircraft or aircraft currently in its fleet. Today, TAM's smallest model is the Airbus A319, with capacity for 144 passengers.

In keeping with the Group's strategic fleet plan, TAM will be the first airline in the Americas and the fourth in the world to take delivery, in late 2015, of the new Airbus A350. "We are also investing around US$183 million within the next two years in over 200 projects that will provide for new services and technologies for our customers, productivity and sustainability technologies, and infrastructure for our employees," revealed Sender. "This initiative reinforces our confidence in the country and our desire to advance even further. We are the airline that transports the greatest number of Brazilians in both domestic and international routes. TAM is also the air carrier that transports the most foreigners to Brazil and the most cargo within Brazil. In 2013, we flew 37 million passengers and transported 233,000 tons of cargo," said the CEO of TAM Airlines.