Brazilian Airline TAM Grows 20% in International Market Getting 38% Share

According to data for June from ANAC, Brazil’s National Civil Aviation Agency, Brazilian Airline TAM registered a 45.6% growth in domestic demand compared to the same period last year, and a 21.0% increase in domestic supply.

In June, market demand increased by 23.7% and market supply increased by 10.2%. In the international market, TAM registered a 51.9% growth in demand and 40.4% in supply, compared to June 2005.

TAM’s domestic load factor was 78.4%, a 13.2 percentage-point growth compared to June 2005 and higher than the 75.5% market average. Regarding the international load factor, TAM reached 75.1%, a 5.7 percentage-point growth, higher than the market average of 69.0%.

TAM registered a domestic market share of 47.6%, a 7.1 percentage-point growth compared to the same period in 2005 and 2.0 percentage points compared to May 2006.

Regarding the international market, the company reached a market share of 37.9%, representing a 20.2 percentage-point growth year on year and 9.4 percentage points compared to May 2006.

For the third consecutive month, TAM had the largest air traffic volume in Brazil: in June, adding domestic and international flights, TAM reached 2.110 billion passenger-kilometers transported, equivalent to a 44.7% market share.

Considering the first half of 2006, TAM also took the lead in the market as a whole (domestic and international), with a participation of 37.8%.

Due to competitive dynamics, the scheduled domestic yield reduced in June year on year.

Operating data  June 2006  June 2005  Var. %

Domestic Market
ASK (millions) – Supply  2,002  1,654  21.0%
RPK (millions) – Demand  1,570  1,079  45.6%
Load Factor  78.4%  65.2%  13.2 p.p.
Market share  47.6%  40.5%  7.1 p.p.

International Market
ASK (millions) – Supply  718  511  40.4%
RPK (millions) – Demand  540  355  51.9%
Load Factor  75.1%  69.5%  5.7 p.p.
Market share  37.9%  17.8%  20.2 p.p.

Operating data  2Q06  2Q05  Var. %

Domestic Market
ASK (millions) – Supply  5,874  4,841  21.3%
RPK (millions) – Demand  4,407  3,234  36.3%
Load Factor  75.0%  66.8%  8.2 p.p.
Market share  45.9%  41.4%  4.5 p.p.

International Market
ASK (millions) – Supply  1,960  1,475  32.9%
RPK (millions) – Demand  1,484  988  50.2%
Load Factor  75.7%  67.0%  8.7 p.p.
Market share  29.9%  16.3%  13.5 p.p.

Operating data  1H06  1H05  Var. %

Domestic Market
ASK (millions) – Supply  11,920  9,591  24.3%
RPK (millions) – Demand  8,699  6,507  33.7%
Load Factor  73.0%  67.8%  5.1 p.p.
Market share  44.8%  40.8%  4.1 p.p.

International Market
ASK (millions) – Supply  3,752  2,895  29.6%
RPK (millions) – Demand  2,889  2,046  41.2%
Load Factor  77.0%  70.7%  6.3 p.p.
Market share  25.7%  16.1%  9.6 p.p.

TAM operates regular flights to 47 destinations throughout Brazil. It serves 73 different cities in the domestic market through regional alliances. Additionally, it maintains code-share agreements with international airline companies that allow passengers to travel to a large number of destinations throughout the world.

TAM – www.tam.com.br

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