Chile’s LAN Airlines merged with TAM Airlines of Brazil on Friday, forming LATAM Airlines Group S.A., the largest airline in Latin America and one of the largest in the world, in terms of network connections. LATAM Airlines Group is based in Santiago, Chile, with secondary offices in San Paulo, Brazil.

The merger of these two behemoths of Latin American air travel has been in the works since August 2010. LATAM Airlines Group now includes LAN Airlines and affiliates in Peru, Argentina, Colombia, and Ecuador; LAN Cargo; TAM S.A. and subsidiaries TAM Linhas Aereas S.A., TAM Transportes Aereos del Mercosur S.A., TAM Airlines of Paraguay, and Multiplus S.A.

LATAM Airlines will provide the most comprehensive network of connections and destinations in South America, initially reaching about 150 destinations in 22 countries—including the US—with a fleet of 310 aircraft and more than 51,000 employees. LATAM cargo business will be even bigger, starting with 169 destinations in 27 countries.

Starting tomorrow, June 27, members of the frequent flyer programs for LAN and TAM airlines, LANPASS and TAM Fidelidade, can earn and redeem kilometers/points for flights on both airlines. LANPASS and TAM Fidelidade members at senior-level elite status (LANPASS Comodoro and Premium Silver and TAM Fidelidade Black and Red) will enjoy access, for themselves and a companion, to VIP lounges throughout the world, preferential check-in and boarding, and priority baggage. LAN Airlines currently offers elite members access to oneworld lounges and TAM is among the 27 airlines of the Star Alliance.

“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,” said Enrique Cueto, the new CEO of LATAM Airlines Group.

For the short term, flights on LAN and TAM will continue to operate under their respective brands. According to a statement issued by the company, “passengers of LAN and TAM will benefit over time from greater connectivity, improved routes and frequencies, and reduced connection times.”

Founded in 1976 and headquartered in San Paulo, Brazil, TAM is the largest airline in Brazil and Latin America while the Chile-based LAN, founded in Santiago in 1929 as Línea Aeropostal Santiago-Arica, is the most established. LATAM expects to triple its revenue in the next four years, producing between $600 and $700 million by 2016.

“The growth LATAM Airlines Group is expected to generate will allow us to offer flights to new destinations for our customers,” said Mauricio Rolim Amaro, chairman of LATAM Airlines Group in an official statement. “In addition, we can support the economic, social and cultural development of our region, improving the connectivity of passengers and cargo in South America and the rest of the world.”

All of these expectations remain to be seen, of course. “This is the beginning of a long journey,” Enrique Cueto said. “The benefits to our customers will be added gradually as the integration of our companies progresses.”

Fodors.com contributor Cathleen McCarthy is the rewards expert for CreditCards.com and covers entertainment and travel deals on her own network, Save on Cities. Her travel stories have appeared in The Washington Post, WSJ, Amtrak ARRIVE, Town Country, and inflight magazines

Photo credit: LAN Airlines via Shutterstock

source: http://feedproxy.google.com/~r/fodors/travel-news/~3/g8uKYLOlSUg/story_5690.html

22 June 2012
Last updated at 16:25 ET

Latam will be Latin America’s biggest airline

Chile’s Lan airline has completed a takeover of Brazil’s Tam, creating the world’s second biggest airline, to be known as Latam.

After two years of negotiations, Tam shareholders agreed to the takeover.

The new company will have its headquarters in the Chilean capital, Santiago.

Brazil and Chile have enjoyed years of economic growth, which has brought about a massive increase in air travel but also recently tougher competition.

Tam, once Brazil’s leading airline, has seen its profits drop as rivals began to offer cheaper tickets and better deals.

Lan – a much bigger company flying to more than 20 countries – has the financial resources to make Latam Airlines Group a serious competitor in Brazil’s huge internal market as well as overseas.

Latam’s chief executive, Enrique Cueto, told the Reuters news agency that the new carrier “will focus on Brazil and will introduce important changes in the local airline market”.

The combined revenues of Lan and Tam last year exceeded $13bn (£8.3bn). Their combined market value is second among the world’s airlines to Air China.

Analysts say both companies gain from the deal.

The takeover is expected to save $700m in operating costs in the next four years.

source: http://www.bbc.co.uk/news/world-latin-america-18560343#sa-ns_mchannel=rss&ns_source=PublicRSS20-sa